The inexorable growth of e-commerce and tight labor constraints have led operators to consider fully-automated warehouses. In contrast to traditional warehouse operations, e-commerce warehouses require a significantly higher number of workers because picking, packing and shipping e-commerce orders is more labor intensive. However, the reality is that all warehouses are not ready to deploy them. This boils down to a number of factors, including cost, complexity and time.
According to Viastore Systems, the cost to implement warehouse automation systems, as a function of complexity and level of automation, can range anywhere from $1 million for simple automation to $25 million for fully automated solutions. Factors such as the general lack of trained employees skilled in managing robots and automated systems and the lack of cohesive warehouse control systems negatively impact the implementation process and post deployment support. Operators will need to redesign their warehouse layout and optimize other aspects of their operations to support full automation, adding further complexity and cost. This results in extended time frames for their return on investment (ROI), wherein it will take multi-years for effective ROI. Taking these factors into account, warehouses intending to implement fully automated systems will need to be ready to invest over $25 million and wait for over five years for an effective ROI. Hence, total costs and time required to invest in robots and fully-automated systems precludes their potential deployment for the majority of warehouses. What solutions can these warehouses put in place to manage the growing demand?
While exploring the potential to introduce automation in a manner that augments their current processes, warehouse operators are also actively exploring potential opportunities to leverage data and advanced analytics to achieve the same goals. While increasing levels of analytics are being integrated into traditional supply chain execution software applications such as WMS, TMS, etc., warehouse spatial intelligence solutions (WSI) has emerged as a new category of cloud-based data and analytics. This new spatiotemporal approach combines unique spatial and real-time data sets (precise indoor location, images and videos and advanced sensors) with cloud-based advanced analytics to gain actionable insights and automate decision making without human intervention. WSI solutions have been demonstrated to enable high ROI and fast payback by improving real-time operational visibility enabling logistics and warehouse operators to significantly increase worker productivity, asset utilization and safety.
Smarter With Space
The deployment and use of WSI solutions are cost-effective and highly scalable due to the commercialization of cameras, battery-operated wireless sensors and cloud-based services — enabling operators to achieve high ROI and rapid time to value. In contrast to traditional data capture technologies based on barcodes and RFIDs, WSI systems leverage rich data with a high level of spatial context in real-time. These new data sets are well-suited for the advances that have taken over the past decade in advanced analytics, including computer vision, machine learning and artificial intelligence. WSI solutions can be deployed stand-alone or easily integrated with open APIs with current WMS, TMS, LMS, IoT and ERP software applications to extend and enhance their respective value propositions. The ease of integration allows operators to analyze massive amounts of data without the need for expensive upgrades and updates to their current legacy software systems. Unlike legacy methods that use periodic and batch-level data analytics, WSI captures data and analyzes it in real-time, allowing improvements to be made immediately to maximize benefits.
A few of the representative benefits that WSI-based solutions bring to warehouses are as follows:
Worker productivity. One of the highest contributors to the overall operating cost of a warehouse by far is labor cost. WSI solutions allow operators to improve overall warehouse efficiency by reducing travel time and distance traveled per worker. By integrating WSI to WMS, slotting, labor scheduling and inventory placement can be improved through intelligent recommendations to boost productivity. WSI solutions have now been demonstrated to increase worker productivity by up to 30%.
Asset and space utilization. WSI solutions can also accurately and precisely locate and track forklifts, assets and other key material handling equipment in a timely manner to provide continuous data and improve resource allocation. Detailed congestion analytics can be used to improve scheduling, optimize warehouse lay-outs, reduce aisle widths and drive increased space utilization.
Loading dock efficiency. WSI can significantly lower truck dwell time, while also boost dock-level efficiency and visibility across the entire warehouse. In doing so, operators can better track truck arrival and departure times across the facility, enabling renegotiated shipping contracts and reduced costs through tighter dwell time limits, as well as decreasing the travel time and distance for loading. Moreover, WSI-based dock-level apps can be integrated with truck appointment and scheduling apps, as well as IoT-based solutions (such as GPS) to accurately track the arrival of trucks to the warehouse. Overall, communication can be vastly improved and labor-intensive processes can be eliminated with automated and real-time alerts and integration with data-entry systems.
Safety. Real-time location data and heat maps are crucial for warehouse safety as operators can leverage detailed congestion analysis to improve routing and movement within the warehouse. It allows operators to increase productivity and safety by optimizing warehouse layout and operations to maintain safety. When integrated with forklifts, WSI can assess and improve driver behavior, as well as create alerts to mitigate dangerous forklift and worker interaction.
Integration with robotics. As warehouses continue to evolve, more automated materials handling equipment will be deployed within warehouses, including automated storage and retrieval systems, Cobots and AGVs. While these will have their own spatial analytic capability driven by commoditization of lidar, vision systems and sensors, they will still co-exist with human workers and other legacy materials handling systems. WSI solutions can play a key role in integrating the real-time location of workers, legacy materials handling and new automated material handling equipment for seamless interoperability. For example, Cobots can determine their own location within the warehouse, but they are unable to determine the location of workers and forklifts. WSI solutions can integrate material handling resources to further enhance warehouse productivity and efficiency.
Additionally, WSI systems can be used by operators to gain operational visibility across all their facilities at the same time leading to substantially better forecasting and strategic planning. To date, many warehouses operate on siloed information resulting in significant inefficiency. These silos preclude operators from gaining a holistic overview of these disparate data pulled from each system to form integrated and actionable insights that achieve true efficiency. WSI is key to breaking these silos as it pulls and analyzes data from multiple sources in a common interface to provide clear visibility and productivity metrics. For all warehouses, having operational visibility across all parts of the operations — whether it’s picking, replenishment or docking picking — is mission-critical. WSI can provide the spatial and analytical lens needed to form actionable insight when operators review workforce schedules, warehouse layouts, asset and space utilization and other operational costs.
In summary, as operators consider robots and full automation, they should first consider how they can leverage WSI-based analytics to improve operations and meet demand while saving costs. In doing so, operators can not only gain a comprehensive understanding of warehouse activity but also lay the necessary groundwork for continuous improvement to achieve long-term success.
Vikram Pavate is CEO of Locix Inc.
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