Warehouse 4.0 ─ Today's Tech for Today's Problems
Fuelled by an unprecedented shift to eCommerce, and the need for solutions-driven tech, the industrial revolution, a.k.a, Industry 4.0, has ushered in Warehouse 4.0.
Quickly making its way into distribution centres (DCs) and warehouses, Warehouse 4.0 is helping organisations everywhere to battle the Amazonian giant and appease demanding big-box retailers.
Supply chains faced many challenges throughout 2020. Industries that enjoyed a history of stable demand and accurate forecasting dealt with erratic, out-of-norm fear-based buying and empty store shelves. And along with a massive shift to eCommerce came significant changes in order characteristics such as smaller order sizes (customers ordering single unit items rather than full case quantities), customer expectations and service requirements.
“In order to build agility in the supply chain, companies must use technology that helps companies work smarter and more efficiently. The COVID crisis has resulted in massive swings in demand, testing the limits of supply chain resiliency worldwide. The organizations with the smartest supply chains will be the ones that survive and prosper. In many respects, COVID has not created new problems, so much as it has exposed existing problems and made them worse. When slow-moving inventory starts to pile up, for example, agile companies will recognize the problem quickly and proactively disposition the product in order to avoid losses.” Sanjiv Gupta, CEO of told Supply Chain Digital.
And the challenges aren't likely to stop coming. With increased supply chain disruptions come hefty fines and chargebacks. Organisations have had to learn to pivot on a dime and increase efficiencies while doing so, and new tech is helping them get there.
Leverage today's technologies to create solutions-focused digital strategies that help eradicate the symptomatic "Just-in-Case" (JIC) behaviours brought on by supply chain disruptions while circumventing labour issues and avoiding the high costs of human error.
On September 1st, 2020, Walmart issued a memo, effectively giving its massive supplier network two weeks notice on their newly adjusted service requirements and penalties. As of September 15th, 2020, Walmart now requires a 98% deliver on-time and in-full (OTIF) compliance rate from its suppliers and has implemented a fine of 3% of the cost of goods sold.
Warehouse 4.0 can help organisations achieve improvement goals and meet the high demands of customer like Walmart through:
- Reducing operating costs with improved resource planning, lowered customer chargebacks, fines, and carrier charges.
- Improving order quality and customer service levels such as OTIF through:
- Faster delivery/ change response times
- Decreased picking errors
- Increased inventory accuracy
- Improved packing, packaging and labelling
- Customer notifications of order status
- Better service centre response times
- Increasing productivity and driving Lean principles by eliminating all waste, including reductions in wait times, travel time, rework, and over-handling.
Today's deep tech is creating an ecosystem of 'smart' warehouses, providing the visibility and creating the agility, pliability and responsiveness supply chains need to remain viable.
The Internet of Things (IoT), autonomous vehicles, wearables, drones and cobots are just some of the new technological advancements that are converging into an A-Team of sorts. Bringing new capabilities, increased accuracy and unburdening the heavily burdened, deep tech and cool new gadgets make hard work easier, so you can get on with it.
Autonomous Guided Vehicles
Autonomous Guided Vehicles (AGVs) are revolutionising material handling and cargo transport. It has been reported that Amazon has now more than 200,000 mobile robots within its warehouse network. Working alongside human workers, this army of robots helps the company to fulfil its promises.
Often replacing forklifts, this technology reduces costs, and time while eliminating the inherent risks of human effort in the movement of goods.
“Everyone talks about self-driving passenger vehicles, but mobile automation is far more developed in intralogistics for fulfilment and industry,” said Rian Whitton, senior analyst at ABI Research.
He further expanded, “The automation of material handling will see huge segments of the global forklift, tow truck, and indoor vehicle market consumed by robotics vendors and Original Equipment Manufacturers (OEMs) that bring indoor autonomy.”
Drones and Cobots
Drones are being leveraged for safe and easy access to remote, hard to reach locations within a warehouse. Both faster and more accurate than manual practices, equipped with cameras, sensors, RFID technology, or barcode scanners, are being used to locate items, conduct stock takes and cycle counts, and other inventory tasks.
Rather than taking over the manufacturing floor as we've all long imagined, Cobots are robots that work collaboratively with humans, automating the "dirty work" such as unergonomic, heavy, or repetitive tasks like machine feeding, material handling, or assembly tasks.
Mobile Devices for Warehouse Mobility
Desktop computers are quickly becoming obsolete, opted out for mobile devices that make things, well, more mobile. Nothing (other than perhaps safety) is more important in a warehouse than keeping things moving. Data is no exception. Mobile devices and apps increase efficiency by allowing employees to work on the move, accessing data as they go.
Smartphones aren't just liberating employees from the confines of a desktop, but are bringing new capabilities and computational power that warehouse employees need to get things done faster, and easier. Video conferencing, picture and video imaging, cloud integration, voice and face recognition are all technologies that bring strong advantages.
Images can help personal locate lost items. Quality inspections and approvals, for instance, may be performed through a video conference call. Cloud integration can help employees track a shipment while on the warehouse floor. The uses are only as endless as our imaginations.
Wearables such as smart glasses are mini-computers that can be strapped to your wrist or head, worn as glasses, or otherwise attached to any part of the body. Wearables are used to automate manual processes and streamline workflows like receiving and handling, order picking, safety and workforce training.
Barcode scanners can scan barcodes without needed to pick up or move packages. The technology can also provide warehouse employees with real-time information and automatically provide reports to management while bypassing manual entry with scanning technology increases accuracy rates and optimises efficiencies.
Today's tech removes the physical constraints and human limitations faced when managing a high volume of shipments, a long list of SKUs, ever-changing demand, and the myriad of other challenges warehouses battle every day.
Together, these technologies can afford you real-time, actional data and seamless collaboration both internally and across your supply chain. Align your operational needs with the right technical solutions, and bring your A-team together for a robust warehouse automation plan that launches you into the 21st century with an effective, efficient, and scalable operating model.
5 Minutes With: Jim Bureau, CEO Jaggaer
What is data analytics, and why is it important for organisations to utilise?
Data analytics is the process of collecting, cleansing, transforming and analysing an organisation’s information to identify trends and extract meaningful insights to solve problems.
The main benefit for procurement teams that adopt analytics is that they’re equipped to make faster, more proactive and effective decisions. Spend analysis and other advanced statistical analyses eliminate the guesswork and reactivity common with spreadsheets and other manual approaches and drive greater efficiency and value.
As procurement continues to play a central role in organisational success, adopting analytics is critical for improving operations, meeting and achieving key performance indicators, reducing staff burnout, gaining valuable market intelligence and protecting the bottom line.
How can organisations use procurement analytics to benefit their operations?
Teams can leverage data analytics to tangibly improve performance across all procurement activities - identifying new savings opportunities, getting a consolidated view of spend, understanding the right time for contract re-negotiations, and which suppliers to tap when prioritising and segmenting suppliers, assessing and addressing supply chain risk and more.
Procurement can ultimately create a more comprehensive sourcing process that invites more suppliers to the table and gets even more granular about cost drivers and other criteria.
"The main benefit for procurement teams that adopt analytics is that they’re equipped to make faster, more proactive and effective decisions"
Procurement analytics can provide critical insight for spend management, category management, supplier contracts and negotiations, strategic sourcing, spend forecasting and more. Unilever, for example, used actionable insight from spend analysis to optimise spending, sourcing, and contract negotiations for an especially unpredictable industry such as transport and logistics.
Whether a team needs to figure out ways to retain cash, further diversify its supply base, or deliver value on sustainability, innovation or diversity initiatives, analytics can help procurement deliver on organisational needs.
How is data analytics used in supply chain and procurement?
Data analytics encompasses descriptive, diagnostic, predictive and prescriptive data.
Descriptive shows what’s happened in the past, while diagnostic analytics surface answers to ‘why’ those previous events happened.
This clear view into procurement operations and trends lays the groundwork for predictive analytics, which forecasts future events, and prescriptive analytics, which recommends the best actions for teams to take based on those predictions.
Teams can leverage all four types of analytics to gain visibility across the supply chain and identify optimisation and value generating opportunities.
Take on-time delivery (OTD) as an example. Predictive analytics are identifying the probability of whether an order will be delivered on time even before its placed, based on previous events. Combined with recommendation engines that suggest improvement actions, the analytics enable teams to proactively mitigate risk of late deliveries, such as through spreading an order over a second or third source of supply.
Advanced analytics is a research and development focus for JAGGAER, and we expect procurement’s ability to leverage AI to become even stronger and more impactful.