Smart warehouses: What they are (and how they help)

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With the rapid growth of ecommerce and across the board labor shortages, warehouse operations and 3PLs are struggling to keep up with demand.

Warehouses that implement smart technology, including mobile robots, automated picking solutions, and warehouse management systems to reduce labor and increase efficiency, will find they hold a significant advantage in the next several years.

How can your business benefit from a smart warehouse? Let’s dive in.

What is a smart warehouse?

A smart warehouse is a high-tech facility that uses automated systems to store and move inventory. 

These warehouses are equipped with sensors and other digital technologies to operate more efficiently than traditional warehouses. 

For example, sensors can be used to track the location of inventory as it makes its way through the warehouse, and software can optimize the layout of the warehouse. 

This helps reduce the number of time employees spend walking around the warehouse and decreases the risk of errors. 

Smart warehouses are becoming increasingly common as businesses look for ways to reduce costs and improve efficiency. In addition, smart warehouses often have automated conveyor belts and robots that can move inventory from one location to another. This further reduces the need for human labor, allowing the warehouse to operate 24 hours a day.

As the competition for ecommerce customers intensifies, more and more companies are looking to adopt smart warehouse technologies to stay ahead of the curve.

How does a smart warehouse work?

A smart warehouse is a bit like the brains of a well-oiled machine. Collecting and analyzing data enables businesses to make real-time decisions that improve efficiency, optimize stock levels, and reduce costs. 

In other words, it’s the key to keeping the wheels of commerce turning smoothly.

So, how does a smart warehouse work? 

Essentially, it uses technology – such as sensors, RFID tags, and drones – to track inventory levels and movement. 

This data is then fed into a Warehouse Management Software (WMS) such as SkuVault that produces real-time reports on stock levels, shelf life, order fulfillment rates, and more. These reports allow warehouse managers to see where bottlenecks are occurring and make changes to the flow of goods accordingly. 

As a result, products are more likely to reach their destination on time and in good condition – which is good news for everyone involved.

Smart warehouses use technology to manage warehouse operations in a way that is: 

  • Agile
  • Scalable, 
  • And provides real-time data visibility.

Key benefits of smart warehouses

Smart warehouses provide many benefits, including improved customer service and reduced costs. 

A smart warehouse can help your operation: 

Improve accuracy

A warehouse is only as good as its accuracy. Fewer picking, packing, and shipping errors mean improved accuracy and reduced costs. After all, misplaced or mishandled inventory costs your company dearly in terms of time, money, and customer satisfaction. Smart warehouses use cutting-edge technologies like RFID tags and sensors to track inventory in real-time. As a result, smart warehouses can achieve incredibly high levels of accuracy, which ultimately leads to improved efficiency and profitability.

Increase transparency

Smart warehouses provide up-to-the-minute reporting and increased visibility across all warehouse operations. This allows warehouse managers to watch key performance indicators and easily monitor the supply chain.

Improve efficiency

A smart warehouse enables you to improve your warehouse efficiency by optimizing warehouse space, creating more efficient traffic patterns, and eliminating bottlenecks.

Reduce costs

Smart warehouses lower the need for human labor and optimize the performance of warehouse associates. This leads to lower operating costs which means lower prices for consumers.

Strengthen customer service

Customers are happy when they get the product they ordered delivered quickly to their doorstep. A smart warehouse means fewer returns, lower prices, and faster shipping, all of which increase your customer’s satisfaction.

Decrease the need for manual labor

Utilizing technology, including robots, decreases the need for manual labor, which is among the most significant warehouse expenses. Employing smart technology in your warehouse reduces the need for manual labor.

Reduce damage and inaccuracies

Anyone who has ever worked in a warehouse can attest that damage and inaccuracies are too common. Goods get dropped, misplaced, or mixed up, and it can be challenging to keep track of everything. However, smart technology helps to reduce damage and improve accuracy. By using sensors and RFID tags, warehouses can track the location of every item at all times. This helps ensure that items are correctly stored and reduces the risk of being damaged or lost. 

Boost visibility and transparency of inventory process

A smart warehouse can provide real-time visibility into the location and status of every item. This data can streamline inventory management, reducing the cost of storing and tracking materials. In addition, transparency into the inventory process can help identify errors and inefficiencies, leading to a leaner and more efficient operation. Ultimately, a smart warehouse provides the visibility and transparency essential for effective inventory management.

Increase speed and accuracy

By automating key processes and using data to optimize operations, smart warehouses can increase both speed and accuracy.

Enhances analytics, reporting, and strategy creation

Smart warehouses utilize artificial intelligence and advanced analytics to gain insights into warehouse operations. These advanced analytics can help estimate future orders and plan for seasonal fluctuations in demand.

Ship faster

Employees spend significant time picking, packing, and shipping orders in a traditional warehouse. Smart warehouses can reduce picking error rates and the time employees need to pick orders.

Have fewer returns

Did you know the average picking error rate is between 1 and 3%? Humans make mistakes, and picking errors are inevitable, but smart warehouses significantly reduce picking mistakes, resulting in lower returns. Technology such as collaborative mobile robots dramatically increases picking accuracy, increasing customer satisfaction.

Increase warehouse space utilization

Mobile sorting and automated picking allow for narrower aisles and higher racks than traditional warehouses. This increases the amount of inventory that can be stored effectively in the same warehouse space.

Smart warehouse components

A smart warehouse gives your business a competitive edge. 

By automating various tasks and processes, your warehouse can help to improve efficiency and accuracy while reducing costs. 

But what exactly are the components of a smart warehouse? In short, they are the technologies and solutions that automate operations within the warehouse. Businesses can take their operations to the next level by investing in smart warehouse components. This can include anything from robots and vehicles to software and RFID.

A smart warehouse includes a variety of components working together, including: 

Collaborative robots

Collaborative robots, or “Cobots,” are built to work alongside your human warehouse staff, increasing the efficiency of your warehouse.

Automated Guided Vehicles (AGVs)

AGVs are an efficient tool to speed up your storage and retrieval process. AGVs are self-driving vehicles, including forklifts and pallet carts, programmed to follow pre-determined digital paths through your warehouse to load and unload stock by the pallet or the box.

AGVs may be added to your operation on an as-needed basis.

Radio-Frequency Identification (RFID)

  • RFIDs are digital tags placed on inventory and goods as they come into the warehouse. Rather than having employees manually scan each package, RFID can identify packages using only general direction and proximity. 
  • This saves a significant amount of time and energy that would typically be used to identify, find, and pick goods.

Automated Storage and Retrieval Systems (AS/RS)

Stock handling equipment such as automated storage and retrieval systems (ASRS) significantly improves picking accuracy and speed using various high-tech tools, including voice automated picking and pick-to-light.

The Internet of Things (IoT)

The Internet of Things (IoT) is a blanket term for connected devices that communicate with each other and share data. For example, robots, conveyors, and human employees can share and provide data managed and analyzed by the WMS.

Warehouse Management Systems (WMS) 

An effective WMS, such as SkuVault Core, will consolidate and evaluate your critical warehouse data in a single platform, providing real-time reporting and accurate analytics.

Your WMS provides:

  • Increased visibility throughout your supply chain
  • Streamlined warehouse processes
  • Reduced labor costs
  • Warehouse optimization
  • Demand forecasting
  • Increased picking and packing accuracy
  • Reduced packing errors
  • Improved customer service

Final thoughts

A smart warehouse is a warehouse that has been outfitted with technology that allows it to be managed and operated more efficiently. 

This can include automated storage and retrieval systems, sensors that track inventory levels and movement, and software that helps managers plan and optimize their operations. 

By implementing these technologies, your business can save time and money on tasks like order fulfillment, stock management, labor, and shipping. 

Schedule a free demo with us today if you’re interested in learning more about how a smart warehouse could benefit your business. We would be happy to discuss the options available to you and show you how the SkuVault Core warehouse management system can help streamline your operations.