Smart Warehousing: What is a Smart Warehouse System?

Cam Summerson
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In modern warehousing, it’s all about reducing costs and streamlining operations. Innovative approaches to storage, tracking, and data collection are pieces to this puzzle, and putting them together requires technology. Enter the smart warehouse. Buckle up.

What is a smart warehouse? 

Much like a “smart home,” a smart warehouse integrates technology into key components of the warehousing process. Automation, intelligent data collection, inventory tracking (throughout the warehouse and beyond), and more are all part of a smart warehouse. Sometimes there are even robots. Robots.

Smart warehousing replaces manual work with automated workflows. Every part of the warehousing process is optimized in a smart warehouse — from tracking inventory through the storage and delivery processes to pulling, loading, and distributing products. 

Smart warehousing practices allow organizations to get real-time data on all aspects of warehousing operations. Inventory management, product tracking, delivery status, staff efficiency, and more are reported automatically.

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Technology used in smart warehousing

Smart warehouses can vary in complexity — from simple inventory tracking to end to end automation — but there are key components included across systems. Smart warehousing maturity plays a big role in just how “smart” the entire process is, with larger organizations and early adopters implementing more smart tools and processes.

Here’s a high-level look at some of the components in a modern smart warehouse: 

  • WMS (Warehouse Management System): All warehouses require some sort of management system, with most relying on dedicated software to handle fulfillment and distribution operations. This is a WMS in a nutshell, and the foundation of a smart warehouse. 
  • Sensors, barcode scanners, and RFID (radio frequency identification): The WMS needs to get data from somewhere to actually enable warehouse automation, which is where smart sensors, barcode scanners, and RFID tags come into play. These devices integrate with the WMS for advanced inventory management and real-time data collection. This usually included precise location of products within the warehouse, detailed inventory tracking, and more advanced metrics than you could shake a stick at. 
  • Data analytics with AI (artificial intelligence) and ML (machine learning): You have data from your smart warehouse, but how do you act on that data?  With the right AI and ML tools for analytics, you can automate how you use this data. For example, AI could monitor inventory and buying trends to not only stay ahead of product demand, but predict it. The ebbs and flows of seasonal demand and workload could also be fully automated and accounted for using AI — automated scheduling to account for seasonal changes could ensure you always have the right amount of staff on the floor. And with ML, the more you rely on AI, the smarter it gets. And that’s just the tip of the iceberg. 
  • Autonomous drones and robots:  Robots are the future of warehousing at scale. Delivery drones and robots that sort inventory can limit mistakes and increase efficiency in a truly meaningful way. Plus, you get robots. Who doesn’t want robots? 

Of course, that isn’t a be-all-end-all list — no one goes from “warehouse management system” to “delivery drones and sorting robots” in five bullet points! There are nuances at every step of the process. Again, if you’ve ever put together a smart home, you know what I’m talking about. 

An image of orchestrated smart warehouse device management for logistics and shipping
Source: ZinetroN/Shutterstock.com

Benefits of smart warehousing

This whole smart warehouse thing may sound good to you, but maybe you already do a lot of this stuff the “old fashioned way.” Nothing wrong with that — but you’re probably curious about what benefits you may get from adopting a more modern strategy. Well, friend — we are friends, right? — worry not. Here’s a look at some of the key benefits of getting smart (or smarter).

  • Increased efficiency: It’s no secret that automating processes is a more efficient way to do things — just think about doing math on paper versus using a calculator. But now give that calculator all the tools it needs to not only do the math, but gather the numbers and output them into something even more meaningful. Useful, even. You just upped your logistics game in a big way — no more manually crunching numbers or charting metrics. And you basically have autonomous calculators. 
  • Improved data collection and inventory management: When you have smart scanners hitting every product that comes through and goes out the door, a WMS collecting all that data, and AI or ML collating that data into automated reporting, your visibility into inventory management gets a whole lot better. Need to know exactly how many of a single product you have on the shelf? Or the number you sold last week? Or the month before that? Not only can you find out, you can create automations and processes that apply across your entire warehouse, streamlining operations and saving time. 
  • Reduced OpEx: In a future where you automate many data entry tasks, inventory audits, and routine reports, you don’t have employees doing more than checking over the numbers. That means they have more time to spend on core warehousing operations, which in turn makes more money. (I asked my autonomous calculators to confirm this.)
  • Scalability: Whether you want to add four warehouse drones or thirty-seven smart cameras (or both ‼️), the right system and automation tools will have you scaling your device fleet like never before. Imagine a future where your warehouse almost manages itself — a product is suddenly in demand, so your WMS uses AI tools and automation to order double the normal amount. More product means you need more floor space to store it, so your fleet of autonomous robots clear space and reorganize existing products per the WMS’ instructions. When the new product arrives, a smart scanner checks it in, a forklift driver equipped with AR glasses sees exactly where it’s supposed to go, and drops the palette in the correct spot. Smart cameras confirm the stock has been delivered, and orders keep getting fulfilled. It’s basically magic. 

Sounds like a dream, right? For some, it might be. For others, they’re already there. But regardless, everyone started at the same place — and had to consider the challenges that come with adopting smart warehouse features. Sorry, it’s not always rainbows and butterflies. 

Challenges associated with implementing smart warehousing

You didn’t expect it to be smooth sailing from start to finish, did you? Everything worth doing takes work, and there will always be issues to deal with. Here’s a look at some of the most common issues you could face when implementing a smart warehouse. 

  • Cost: I know we talked a lot about how much money this whole smart warehouse thing will save you — and that part is true! — but you also have to pony up to get started. It’s a short-term investment versus long term payoff here: Sure, there are upfront costs, but it’ll pay for itself and then some in most cases. 
  • Integration with existing systems: This is commonly one of the biggest hurdles for every organization. You have existing, critical tools and systems that you rely on. Everyone knows how to use them, and training new people is a snap. But now you want to start integrating smart features that aren’t compatible with these systems. It’s a pickle indeed — one that’s not always easy to circumvent. 
  • Learning new systems and resistance to change: Along those same lines, when you inevitably decide to leave your old system behind, there will be backlash. Your employees might not love change and will have to learn a whole new system. That takes time and patience, making adopting new technology a slower process than you may want. 

When it comes to running a business, challenge is the name of the game. There will always be challenges to overcome — some will just be more worthwhile than others at the end of the day. 

So, you're ready to build a smart warehouse — what's next?

With any system that integrates dozens of different devices in as many form factors, you need a way to manage them. That’s where Esper comes in. We’re the experts when it comes to managing the types of devices that make your whole warehousing system tick. With our robust and trusted infrastructure, you’ll be able to manage, control, and update every device on your warehouse floor — even if that warehouse is on the other side of the world. Learn what Esper can do for you

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Image source: Andrey Suslov/Shutterstock.com

FAQ

What is a smart warehouse?

A smart warehouse makes connected technology an integral part of the warehousing infrastructure — from inventory management to processing and delivery. Smart warehouses rely heavily on automation.

What are the benefits of smart warehousing?

Reduced operating costs, increased efficiency, faster scalability, and improved data collection techniques are all benefits of a smart warehouse.

What are the challenges associated with smart warehouses?

Upfront costs, integration with existing systems, and resistance to change are all common challenges associated with adopting smart warehousing practices.

What kinds of technology are used in smart warehouses?

Smart warehouses use an array of technology, from automated warehouse management systems (WMS) to autonomous robots and delivery drones.

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Cam Summerson
Cam Summerson

Cam is Esper's Director of Content and brings over 10 years of technology journalism experience to Esper, including nearly half-a-decade as Editor in Chief of a technology publication. He currently oversees the ideation, execution, and distribution plans for numerous types of content from blog posts to ebooks and beyond.

Cam Summerson
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