Smart warehousing

ITM Editor Joseph Clarke explores the intelligent solutions available for warehouse operators to become smarter 

Warehousing is an important facet in the supply chain for businesses that deal with physical goods. While it can be overlooked, the process of warehousing is an important one in ensuring a smooth transportation and storage process for goods. E-commerce has driven rapid growth throughout the warehousing industry. In fact, the market has doubled in the last decade as businesses around the world have been heavily investing in their supply chains to get goods to consumers and businesses faster and more efficiently.  

Digital warehouse technology is quickly gaining traction in the world of logistics and supply chain management. Companies can benefit from digital warehousing solutions by optimising their processes for increased efficiency and cost savings. Warehouse digitalisation can provide valuable insights into customer behaviour, trends and preferences that can help companies stay ahead of the competition. 

A smart warehouse is the culmination of warehouse automation, where various components of warehousing operations are automated. A smart warehouse incorporates several automated and interconnected technologies. They are tech-driven, allowing you to automate processes using technology such as robot palletising, AMRs, IoT, digital twins, 5G and more. 

These technologies work together to increase the productivity and efficiency of the warehouse and can then minimise the number of human workers involved in the operations, while decreasing the errors. With smart warehousing, real-time updates can be obtained, as well as the optimisation of manual tasks and increase of automation which is impossible in traditional warehouses. This strategy gives workers the time to focus on high-value tasks. Having an automated warehouse improves operational scalability while minimising human interaction. 

According to a report by Research and Markets, the smart warehousing market size is predicted to reach US$9,400.10 million by 2027, up from $4476.09 million in 2022. Warehouses are getting more complex, leading to more diverse and higher customer expectations. Traditional warehouses are no longer suitable to meet modern customer needs, as customers are expecting faster delivery and ease of tracking their goods.  

Warehouse digitalisation 

Warehouse digitalisation is the process of harnessing the power of data and technology in order to transform traditional warehouse operations. Digital warehousing maximises, streamlines and optimises the use of manual processes. These manual processes can involve inventory management, order fulfilment and shipping, by utilising emerging technologies such as artificial intelligence, robotics and the Internet of Things. 

From warehouse digitalisation, companies are able to maximise efficiency and productivity in a warehouse while reducing the overall costs. This can be achieved through real-time tracking solutions that allow for accurate inventory management, automated sorting and packing, faster order processing and more efficient shipping. 

Digital warehousing and logistics operations in today’s day and age is rapidly becoming an absolute necessity for businesses not only to improve upon their bottom-line but also to maintain a strong competitive edge.  

One of the largest advantages of the increase in digital warehousing is the improved visibility that comes with it. Studies show that 62% of companies have limited clarity in their supply chains. Slow, error-prone manual processes make it difficult to understand inventory levels and shipping progress in time, leading to delays and mistakes. IoT technology can mitigate this by providing automatic, real-time data. 

IoT Tracking 

IoT tracking sensors can reveal precisely where any product or shipment is at any time. This can even include being able to monitor its condition. Warehouse management systems can organise this data to provide workers with immediate information about where everything is. This level of visibility helps warehouses avoid many common errors that can happen through simply manual warehousing. Easy-to-access real-time location data can help workers find the right items at the right time.  

Warehouse management systems  

Warehouses that improve their levels of visibility also become more efficient in doing so. This improvement is most noticeable in the picking of products. Workers who know exactly where to go for each item spend less time walking and looking through the plethora of aisles in the warehouse.  

Over time, data gathered through warehouse management systems (WMS) solutions about these picking operations can reveal workflow improvements. Some WMS tools feature data analytics that can rearrange storage for more efficient picking. Automating this analytics process saves more time, as AI is faster at data-heavy tasks than humans are. 

Tracking shipments and inventory levels through the Internet of Things can help warehouses anticipate incoming needs. They can then restock items, prepare for packing or unloading, or make other changes to operate more efficiently in the long term.  

Digital warehousing can help logistics operations to lower their ongoing expenses. One way of doing this is through digital twins. A digital twin in warehousing is a real-time physically accurate simulation of a warehouse, consisting of digital representation of real-world objects, processes, and systems within a warehouse. Digital twins can let warehouse operators simulate various workflow changes and see how they’d impact energy, equipment and staff costs. They can then find the most cost-effective option without expensive, real-world trials. 

Digital twins  

Digital twins allow warehouse operators to re-assess layouts to make real-time decisions. Managers can provide data to a virtual system that works together with IoT devices to monitor physical layout. This system can provide an actual setup, enabling companies to review their layouts and operations.  

With this information to hand, companies can carry out throughput testing and cost-benefit analysis, which tests operational inefficiencies without causing downtime. As a result, resource planning is improved, decision-making is strengthened, and congestion is reduced. 

Big data technologies and AI 

Nowadays, warehouse processes require more flexibility than conventional methods in order to respond better to customer orders. By using big data technologies and AI to create a smart warehouse strategy, warehouse efficiency and productivity can be increased.  

AI-based data manipulation techniques can be used to categorise the types of optimal input for the operation of retrieving goods from specified storage locations based on customer orders. AI-based data manipulation tools have a positive effect on warehouse performance, helping to obtain a dynamic order picking operation which will permit changes in picking lists during a picking cycle in the warehouse. 

Data analytics engines can analyse a business’ logistics processes to highlight potential cost improvements. Some operations may benefit from outsourcing their warehousing, which frees up capital by mitigating ownership expenses, but may not realise it. Analytics would show the data behind how it would save money, helping the business find new ways to save money.   

Machine learning and analytics   

Warehouse managers are keen on analysing historical data to predict demand as well as optimise asset utilisation and warehouse capacity. This is where machine learning and predictive analytics aid in being proactive rather than reactive.   

Another use case for analytics in warehousing is to derive insights from the data obtained through sensors in an IoT network. Sensors or smart chips installed throughout a warehouse can yield data about each product’s availability and signal when there is a need to restock.  

Warehouses continue to operate under the constant pressure of high costs and expectations of greater operational accuracy. The growing need for collaborative planning, reduction in cycle times, same-day or expedited shipping, higher throughputs add to that pressure. 

Mobility solutions 

Warehouses can massively benefit from greater adoption of mobility in their operations. The evolution from desktops to smartphones and wearable technology has already been a major shift in the operations of warehouses. 

Warehouse mobility solutions are an essential warehouse digitalisation tool for businesses to optimise supply chain operations, and therefore maximise their efficiency. By leveraging the power of mobile technology, businesses can streamline processes such as inventory management, order fulfilment, and shipping. Warehouse mobility solutions provide real-time visibility into all aspects of the supply chain, allowing companies to respond quickly to changes in customer demand, and capitalise on market opportunities.  

Handheld devices loaded with smartphone apps, voice interfaces, and smart glasses are optimising worker movements, picking automation, packing, and kitting operations. Managers can also work on the go and keep track of stock and inventory through mobile dashboards and reports. 

Autonomous Mobile Robots (AMRs) 

Autonomous mobile robots (AMRs) are reshaping the warehousing landscape on a worldwide scale, as this exciting technology brings a wide range of benefits to the warehouse.  

In a study carried out by digital technology company Zebra, it was revealed that 99% of warehouse operators expected to bring in some form of AMRs in the next five years, despite only 27% saying that they are using AMRs in their warehouses today. 

Andy Cooper of European Conveyors and Components, a specialist in materials handling and technology, explains that AMRs offer Return on Investment (ROI), which is why they are being quickly embraced by the industry. They use a system that has an AI algorithm, they are constantly developing and learning, and are also autonomous in planning their own journeys.  

Cooper said: “AMRs use Simultaneous Localisation and Mapping (SLAM), which enables you to build a map and localise your vehicle in that map at the same time. SLAM algorithms allow the vehicle to map out unknown environments.”   

Despite common opinion believing otherwise, automation does not automatically mean replacing the human workforce and therefore it need not result in job cuts. “Many warehouse companies are seeing that AMRs are making warehouse jobs less stressful, as operators’ jobs require less walking and a reduced amount of handling and picking,” said Cooper. “Indeed, warehouse workers have reported increased productivity and a reduction in the mistakes they make. AMRs have enabled them to advance to new roles and opportunities.” 

Cooper concluded: “Technology is a huge enabler and problem-solver.”  


Able to work up to 100 times faster than 4G, 5G is obviously the number one choice for warehouse operators and managers. 5G networks have the potential to reduce latency and greatly improve computing by providing an infrastructure for IoT devices. The bigger the bandwidth, the more sensors it can work with within a square kilometre, 10 times faster.    

By incorporating 5G connectivity into smart warehousing, several benefits are seen. These include:  

Improved tracking: Moving objects can be tracked with location updates to ensure complete visibility. Continuous tracing and tracking is provided which accelerates order filling, picking and processing by integrating 5G-enabled sensors with asset tracking systems. 

Reduced labour costs: Leverage navigation tools and in-built sensors can be facilitated easily by providing high bandwidth for AMRs to move around the warehouse efficiently. This improves equipment and materials transportation, reduces labour costs and increases workforce safety. 

Optimisation of complex operations: Warehouse operators can carry out more complex tasks, with an interconnected network of sensors and machines working cohesively. 

Chad Jones, Global Government Lead, KPMG LLP, very clearly summarised the possibilities of 5G for smart warehousing. He explained that 5G “allows us to connect humans to machine and machine to machine, which allows us to engineer and optimise the equipment in the way it flows. For example, we can send commands to robots to make them more efficient in the way that they move from one location to another. This then means we can increase velocity and movement throughout the warehouse, creating a force multiplier across warehouses.” 

Radio-frequency Identification 

Radio-frequency identification (RFID) helps with the organisation and control of inventory.  

RFID replaces old analogue paper tracking methods with more favourable tracking packages that have digital tags. Then, radio waves facilitate the transfer of data to or between the digital tag and an automated scanning system, recording the product’s information.   

Instead of using older barcode scanners, where the barcode must be precisely aligned with the scanner to identify it, these scanners can be pointed in the general direction of the package to scan.  

As scanners don’t need to be precise with alignment, automated machines can be used to scan packages as they come in, identifying and counting the number of each type of good that arrives. Moreover, these scanners can detect goods as they leave the warehouse during order fulfilment, making sure that inventory count is always accurate. 

Today’s warehouses are increasingly influenced by warehouse automation, so operators and managers really have no other choice than to think smart and embrace these intelligent solutions.  

A complete warehouse overhaul is not necessary, nor is maximum automation something that will be acquired overnight. Automation, however, can be achieved by implementing these new technologies and solutions one by one. By selecting and introducing the technologies that make most sense for your business, it won’t be long before you realise that any warehouse can be a smart one.  

Read more news and exclusive features in our latest issue here.

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International Trade Magazine

Media Contact
Joseph Clarke
Editor, International Trade Magazine
Tel: +44 (0) 1622 823 920

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