In this article we look at the definition and the importance of the Internet of Things to the future of warehousing. There are many definitions for the IoT but perhaps one of the most succinct is from the McKinsey Global Institute which defines IoT devices as those that “can monitor their environment, report their status, receive instructions, and even take action based on the information they receive”. According to Bob Trebilcock, writing in Supply Chain 247, people now talk about the Internet of Everything (IoE) not just the Internet of Things. According to Jack Allen from Cisco, IoE is more than just connecting things, it’s about connecting things, people, processes and data in a way that’s usable and useful.
We also constantly hear the term Industry 4.0 which is seen by many as a comprehensive transformation of the whole sphere of industrial production. Dr. Kerstin Höfle of Swisslog suggests that IoT is just a part of Industry 4.0 which, according to her, encompasses both IoT and the Internet of Services, both of which will lead to smarter manufacturing facilities and warehouses.
Each item or piece of equipment can, with the right technology, be uniquely identifiable and is able to operate within the existing internet infrastructure. Radio frequency identification (RFID) tags for example, are able to record temperature variation, impact and movement for example – key areas within a warehouse operation, especially within a temperature-controlled environment.
Today’s warehouses are more than just storage facilities – they have become important strategic locations and are seen as dynamic distribution and fulfilment centres. Today’s consumer is looking for a quick response from retailers and as a result companies are having to up their game. Data, communication and connectivity are key in this respect. Automation and technology become enablers however it is all about how we use the data in our possession and how well we can connect all elements within the supply chain.
Recent data from Juniper Research suggests that US retailers will be spending approximately $2.5 billion on IoT (Internet of Things) technologies by 2020. This includes spend on RFID readers, sensors and Bluetooth technology. Research firm IDC expects the global Internet of Things market will grow to $1.7 trillion in 2020 from $655.8 billion in 2014.
MIT scientists predict that by the end of 2020 between 20 and 50 billion products will be connected to the Internet. This “smart” technology will enable warehouses to become more efficient, more productive and more accurate. According to Cathy Roberson from Logistics TI, the introduction of AI (Artificial Intelligence) alongside IoT will enable products to re-order themselves, taking some of the guesswork out of forecasting.
Each piece of equipment will self-diagnose faults and ensure that it is operating at ultimate efficiency thus prolonging operational life and pre-empting any potential breakdowns which will adversely affect customer service.
Increased accuracy and visibility of data will allow retailers to identify the most cost-effective method of stock allocation and delivery. Data compilation and analysis will further improve stockholding and will likely lead to improved new product development and customer service.
The question is – how far are we away from this seamless connectivity? Currently warehouse automation, materials handling equipment and technologies such as voice, scanning and vision operate on separate platforms and these need to be fully connected, working together with Warehouse Management systems and Enterprise Resource planning systems in real time.
All of the data produced, once accessible, will be analysed meticulously in order to improve supply chain operations. This may require a separate platform to standardise and synchronise the data produced.
IoT will enable reasonably simple tasks such as cross-docking to take place and also allow companies to enhance their ABC and slotting techniques to ensure that products are stored in the most efficient locations. The introduction of wearable technology such as vision alongside voice will also further enhance warehouse processes and together with automation will revolutionise warehouse operations.
Recent examples, according to Tom Wadlow from Supply Chain Digital, include a Cisco and DHL project which “enables DHL to monitor operational activities in real-time through a responsive graphical visualization of operational data aggregated from sensors on scanners and material handling equipment”.
Decathlon, the sports goods retailer is also introducing RFID across its product lines to enable full track and trace capability and to ensure that the goods arrive on time, in full and shelf-ready. This requires communication and connectivity across all of their vendors, distribution centres and stores.
A note of caution however – all this interconnectivity and data storage can lead to increased security threats and privacy issues. Cyber security will play a significant role in ensuring that consumer and retailer data is not easily accessible and thus compromised.
IoT is, of course, fully reliant on the internet and communication systems. Any prolonged disruption could be catastrophic and the more people who use these systems the more capacity will be required.
However, notwithstanding security, downtime and privacy issues IoT and AI will revolutionise what we do throughout the supply chain and the fulfilment and distribution centres will be pivotal in making supply chains more agile and responsive.
A course on Warehouse Management which discusses the role of technology in today’s warehouses can be accessed at https://appriseconsulting.teachable.com. Quote BONUSAP20 at checkout for a 20% discount.
Gwynne Richards is a Supply chain consultant and trainer. His book on Warehouse Management, published by Kogan Page, is now in its third edition. He is also the co-author of The Logistics and Supply Chain Toolkit. https://www.koganpage.com/product/warehouse-management-9780749479770
Key words; logistics; warehouse; supply chain, internet of things; AI; logistics consultant; warehouse consultant; warehouse training
Today, the UK media is full of news stories regarding the lack of HGV drivers, resulting in certain retail stores reporting shortages of some food products.
We’re also seeing the temporary closure of some petrol stations and it’s also been reported that chemical producers are having difficulties delivering to water treatment plants.
As time goes on and as we approach Christmas, if the situation doesn’t improve we will start to see similar scenes to those during the early days of the Covid-19 pandemic, with people panic buying their sprouts….
In a recent lecture on automation and technology the question was asked about what happens to the current logistics workforce if they are replaced by advanced technology, automation and robotics.
Certainly, a small percentage will be upskilled to become technicians and engineers but what of the rest?
IGD’s projection to 2035 based on data from “The future of employment” by Frey and Osbourne (2013) suggested that the following logistics jobs were at risk of being replaced by robots and outlined the percentage risk factor.
The report seems to separate the physical work from the cerebral however with the advances in Artificial Intelligence the work of the demand planner could be one of the first to go. I have to admit to being somewhat surprised at the Logistics Director role being twice as likely to be replaced by
technology compared to the buyer. Maybe the Logistics director needs to upskill to become a Supply Chain director!
Linde’s vision of the ‘logistics of the future’ suggests that machines will, in effect communicate with each other with goods organising their own transport. This can also be extended to products reordering themselves based on sales and more accurate forecasting. Perversely they still show a
requirement for truck operators!
As for the manual tasks in the warehouse we’re already seeing containers and vehicles being unloaded by robots and automated guided vehicles (AGVs) and these AGVs now being able to put pallets away in racking. The addition of vision technology to the AGVs will enable them to check the
quantity and type of products delivered and flag up any discrepancies, sending evidence in real time to the supplier. Basic forklift truck operations are a definite candidate for automation.
With regard to picking there are robots which are able to pick items from shelves however they are still quite slow and are no match for human dexterity currently. Goods to person technology is certainly advancing with robots bringing shelving to a manned station such as those provided by
Kiva, Swisslog, Grey Orange and Eiratech. We also have automated storage and retrieval systems performing a similar task. All of these systems still require a human to do the final pick and placement. Packing can be automated as can labelling and stacking for despatch.
Recent advances have seen companies such as Geodis and Walmart trialling drones to undertake stock counts. An interesting development however there are potential issues with part pallet counts in the racking unless a full RFID (Radio frequency Identification) system is introduced. The introduction of self-driving trucks for trunking between depots can certainly be envisaged however replacing multi-drop vehicles and parcel couriers with self-drive vehicles may well be a last mile too far at present unless accompanied by a human whose role it is to make the final drop-off.
Returning to the question of what happens to the people once advances in robotics and artificial intelligence have enabled companies to reduce their workforce, for HGV and LGV drivers this coincides with a significant shortage at present. The average age of HGV drivers in the UK is
suggested to be 53 with 5% of drivers over the age of 65. The difficulty of attracting younger workers into the industry further compounds the issue as has the vote to leave the EU with Eastern European staff working in the logistics industry returning to their own countries. As for non-skilled or low-skilled staff in the warehouse this is a more significant problem as not all staff will be able to be retrained and retained. We cannot stand in the way of progress however there will be a need to support displaced staff.
Some ideas include taxing companies who lay off staff when they introduce robots and getting them to invest in re-training staff for other occupations.
Other ideas include a guaranteed basic income however it is difficult to say how sustainable this is likely to be given that robots and AI are the likely future for logistics and other sectors such as manufacturing. Machines will take over basic tasks and potentially dangerous occupations and therefore the question does remain – what will companies and Governments do with displaced workers?