The Smart Warehouse

Think of a warehouse as a living organism which is home to all the business processes that take place under its roof – from receipt of products and materials through storage, picking and packing, and then shipment to distribution centers or end customers. In order for the warehouse to fully function it needs real-time data to flow automatically and unimpeded to and from each of the business processes and then back into the central unified core of the warehouse management system (WMS).

Data is the lifeblood fueling the brain of the organism. Any obstacles in the flow of data lead to slowdowns in overall warehouse productivity and result in a less intelligent organism. Real-time data is the key to a smart warehouse – one where information about products, the status of customer orders and inventory levels can be used as the basis of informed decision-making and future planning. Those decisions and plans can then be revisited and adjusted any time there’s a significant change.

Becoming Smart

The free flow of real-time data within a warehouse is a sign of a healthy warehouse which can provide the warehouse manager and supervisors with valuable insights garnered from that information. However, a warehouse can’t exist in isolation. The warehouse needs to have established real-time symbiotic mutually beneficial data-driven relationships with the rest of the supply chain including the enterprise resourcing planning (ERP) and consumer relationship management (CRM) systems of both the company and its partners. The flow of information to and from external partner systems is a key tactic which makes a warehouse smarter.

Being able to combine real-time data from outside the warehouse with internal information provides a warehouse with complete knowledge about the warehouse’s own business processes and all the external operations which link into those processes. In this way, a warehouse has full visibility across the entire supply chain. The smart warehouse uses that knowledge to first streamline all of its business processes to ensure efficient, real-time bi-directional data flow, and then it continually refines those processes so that the warehouse is always operating at optimal efficiency. Business processes also need to be adaptable and scalable so that they can be easily customized in response to changes in the supply chain at the customer or partner level, for instance, fluctuations in customer buying patterns or delays elsewhere in the supply chain.

Cloud = Smart

The cloud provides an integrated suite on which a company can run all of its operations from omni-channel sales to supply chain management, including warehouse operations, order management, finance and customer service. The suite provides complete visibility into a single unified source of real-time information from all of those business processes, which can be tailored to the needs of a specific organization. That Pet Place, based in Lancaster, Penn., is a multichannel retailer of aquarium and pet products, with 2,000 SKUs, which aims to make pet products more affordable and easily available for the average consumer. Since deploying a cloud-based system across its business, That Pet Place has been able to reduce inventory carrying costs by more than 10 percent. The retailer has also improved order processing efficiency by 30 percent by using warehouse management capabilities to speed up pick, pack, ship and fulfillment business processes.

As a business grows, one of the unknowns is how the customers, partners and industry it serves may change over time. That change may be gradual or it may be disruptive as new startups with fresh business models enter the market. Today’s warehouses are changing as new technologies appear with the promise of making operations across the facilities much more efficient. A cloud suite of enterprise solutions is highly adaptable to change being both easily customizable and able to scale up (and down) as demanded by business environment.

Growing Smarter

Provided a warehouse is embedded in unified business processes with an unimpeded flow of real-time data, the warehouse operator is optimally placed to bring in emerging technologies to take efficiency to a whole new level. We’re seeing the advent of more use of robots, smart forklifts, pick to light, voice picking and wearable devices for warehouse staff as well as the application of artificial intelligence to create optimal routes for robot or human operators. All of these technologies have the same central aim of making operations within the warehouse faster and more efficient. At the same time, these newer technologies provide opportunities to capture, analyze and then act on even more real-time data.

Warehouses also need to become smarter because in today’s customer-centric world, their operations can no longer be invisible from consumers. We’re seeing shifts towards the tracking of the entire life cycle of products, not only as has long been the case in some industries to adhere to government regulations, but also to meet the exact requirements of consumers. Increasing numbers of customers are starting to factor in how “green” a company’s entire manufacturing and supply chain operations are when they are making a product purchase decision.

In addition, as more and more materials and products become members of the Internet of Things, the embedded intelligent sensors they carry may start broadcasting information from the moment they’re created. 

For every warehouse operator, the goal for the future should not only be maximizing efficiency but also optimizing real-time data intelligence. Having full visibility into all the information flowing into, around and out of a warehouse equips warehouse managers and their staff with reliable, real-time data to use in a variety of ways to improve operations. On the one hand, real-time data provides insight into why and how to customize existing business processes or to create new processes taking advantage of emerging warehouse technologies. On the other hand, the information forms the trusted basis across partners for guiding decision making and future planning. So, when thinking of a warehouse as a living organism, the smart warehouse is one that runs rather than crawl, can easily clear any obstacles put in its path instead of being held back, and can quickly morph in response to any changes in its environment.  

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