Online retail sales alone are set to rise to £98.5 billion by 2022, and every additional £1bn of online sales results in additional demand of 775,000 sq. foot of warehouse space.
Add in the fact that picking, packing and dispatch costs can vary massively, while simultaneously customers are demanding more flexibility in terms of turnaround times and smaller more frequent orders, warehouses are needing to combine inventory from multiple destinations.
This means it’s very hard for warehouses to plan, budget and forecast for next month, let alone next year.
Recently more automation has been seen as the answer - and within many companies having a multi-storey warehouse humming with unmanned forklifts and laser-guided storage and retrieval machines leads to a belief that their processes are fully optimised.
But to maximise the benefits of having an autonomous warehouse we need to understand that however ‘smart’ we think our systems are, without effective monitoring and reporting there are huge quantities of operational data being generated which are not being optimised.
So, while automation is established as a key driver of improved efficiency and increased productivity within warehousing, making the ROI case for Totally Integrated Automation (TIA), combined with full digitalisation, can be a challenge.
I’ve found one of the best ways to overcome resistance is highlighting the ‘reliable’ ROI. For example, by integrating, monitoring and analysing data from the complete end to end process you can start to make significant gains immediately via predictive maintenance, reduced downtime and lower energy costs.
Predictive maintenance helps reduce the potential for equipment failure by analysing production and performance data to identify patterns and predict issues before they impact on productivity.
Predictive maintenance can also ensure the correct spares are to hand, and that engineer being called has the right skillset for the job. Those two elements alone generate massive savings.
Reducing energy costs is another major benefit of digitalisation, with savings of up to 30% achievable. Real-time energy data can be captured via a cloud-based dashboard showing where the ‘spikes’ and ‘troughs’ are across the whole operation.
Further, in specialist sectors such as critical storage, TIA and effective monitoring takes on an even greater significance.
Regulated temperature and humidity, or external security breaches and other potential risks, can all be managed from a central interface which is simultaneously looking at the overall performance of the facility.
However, beyond just retrofitted interventions to make automated warehousing even more efficient, digitalisation is also set to determine the way new warehouses are designed, run and even where they are situated.
Using Siemens’ ‘digital twin’ approach, a fully-functioning virtual warehouse can now be built and stress- tested across thousands of scenarios.
Sudden increases in demand, seasonal variations and other capacity challenges can be played out in the virtual world, with every element being re-calibrated to achieve maximum efficiency.
You can experiment with zone storage, dedicated storage, random storage and cross-docking. In addition, order picking, including batching, routing and sorting, can be subject to algorithms not guesstimates.
Robots, carousels and conveyors can be compared for optimal performance, while inventory management, schedules, order release and other planning processes can be factored in. Warehouse managers can even ‘walk the floor’ of the virtual facility.
Geographical data can also be fed in, helping to determine the best site location with regards to transport links and nearness of supplier and customers. You can also investigate if a series of smaller, modular facilities could actually outperform a ‘big shed’ model.
In conclusion I’d argue that bots shifting boxes, however quick and intuitive they may be, should be seen as just the start of the smart warehouse journey.
When they start collectively telling you they might be about to go wrong, when they are using less power, or how they might be better deployed, then you can set about making the gains needed to remain competitive in what is a rapidly changing sector.
Scott Read, Andrew Selim from Ocado, and Bart Schouwenaars-Harms from Amazon, will be talking about these and other smart warehousing issues at Siemens’ Digital Talks conference on June 11th in Liverpool. More details at www.siemens.co.uk/digital-talks-2019
