Imagine stepping back in time to visit a large warehousing operation in 1990. If it were only possible, such an adventure would really throw today’s distribution center advances into focus.
Now imagine what the distribution center of 2045 will look like if technology continues to disrupt logistics as profoundly as it has done since the 1990s. Is your mind boggling yet?
To save you from a meltdown, let’s take a brief journey through warehouse operating developments from 1990 to 2045. While some imagination will still be required on this journey, most of the hard work has been done in the writing of this article, so you can shut down the imagination overdrive and cruise through this rundown of technology’s impact on warehouses and distribution centers.
1990: A Fine Vintage for Warehouse Operators
Welcome to our tour of a logistics warehouse in the late 20th century. Pay attention as we move through the building, because while a lot of things are different to the warehouse of today, many of them appear subtle to the eye, but have huge meaning in terms of warehouse efficiency and productivity.
Perhaps the first thing you’ll notice is just how many people there are. See that supervisor over there, distinguished from the operatives by his different coloured hi-vis vest? Look! There’s another supervisor, and another over there, although you can hardly see her for all the operatives moving among the pick faces in that aisle.
That’s probably one of the first differences you’d notice between a warehouse of today and that of 25-plus years ago – and of course it’s down to technology.
Today’s warehouses need fewer operatives and hence, fewer line managers, because certain labour-reducing technologies have either made labour more efficient or eliminated it altogether. Let’s briefly consider those technologies:
Warehouse management systems have advanced considerably in the last couple of decades. In the process they have made many warehouse activities faster for people to perform and generated efficiencies to reduce labour-intensiveness. For example:
- Paperwork and data entry: WMS has reduced the need for people to spend time completing paper forms or entering data from documents into spreadsheets and other data-management applications.
- Picking efficiency: Warehouse operatives can pick faster with WMS, because the technology helps to organise warehouses more efficiently and (with features such as system-guided picking) enable more efficient working practices to be followed.
- Task Interleaving: As WMS solutions have become more powerful, they have extended the concept of system-guidance across all activities, especially those performed by forklift operators.
In 1990, picking was a task in which a warehouse operative would spend almost as much time recording activities on paper documents as performing the actual task of moving items from pick-face to pallet.
Technologies such as barcode scanning and RFID have taken away much of that administration effort, by allowing operatives to simply scan a pick face and enter picked quantities on a keypad.
More advanced solutions even eliminate the data entry altogether, leaving the operative to concentrate solely on the actual picking. Scanning technologies have had a similar impact in other areas of warehouse operation, such as receiving, put-away, and dispatch.
By adding voice-guidance to the range of WMS functionalities, a warehouse operation becomes even more efficient, as operatives no longer need even to look down at a display to see their work instructions.
Instead warehouse staff listens to instructions and respond vocally, so the majority of their attention is always focused on “doing” without the distractions of task identification and recording.
Like other solutions already mentioned, voice technology reduces labour needs in more ways than one. In addition to helping warehouse personnel get more done in less time, it makes human error a less frequent occurrence, in turn reducing the need for labour to be expended on checking and rework.
The mother of all warehouse technologies, warehouse automation has been responsible for more warehouse labour reduction than any other innovation and, as we’ll discuss a little later in this article, is only offering a fraction of its potential thus far.
Automated solutions are pervasive, and becoming more so as the technology improves in affordability as well as sophistication. The warehouse of 1990 was typically bereft of automation though, with the exception perhaps of rudimentary (but still important) solutions such as gravity-fed racking or in companies with larger budgets, pick-to-light systems.
Now, back to the tour…
Notice how many people on the warehouse floor have paperwork in their hands? In fact, there seems to be paper everywhere… And look up there in the racking. There are rows and rows of file boxes stored on pallets, presumably containing years of paper records and documents. What a wasteful use of good warehouse cube.
The Paperless Warehouse
Fast forward to the warehouse of today, and you’ll notice far less in the way of paper about the place. WMS software, scanning solutions, and other IT applications in the warehouse have eradicated the vast majority of paper forms and documents from the warehouse environment.
As already discussed, less paperwork is less work full-stop. It also means physical space no longer has to be found for paper storage and archiving.
Warehouse technology has changed data entry processes, enabling data to be entered directly into digital storage and reducing the scope for errors caused by readability problems, lost paperwork, and other issues arising from the translation of handwritten data into electronic bits and bytes.
By removing the need for paper processes, warehouse technology has reduced operating costs (because companies don’t have to spend money on paper, related stationary, or the supply of pre-printed documents). It has also contributed to sustainability, since warehouse operations now place less demand on forestry resources.
A Summary of Our Trip Back in Time
Warehouse management systems, automation, barcode and RFID technologies, and voice guidance systems all combine to make warehouses more efficient, less impactful on the environment, and less reliant on manual labour.
Of course if you’ve been involved in warehousing for some years, it’s easy to overlook the huge differences between warehouses of today and those of the late 20th century, so a quick trip back in time would likely prove quite a shock to the system.
Even now, in our less labour-intensive warehouse environments, technological progress continues to disrupt and transform the way we manage inventory storage and throughput. Having taken a look back in time, we should take some time to explore what’s happening in warehouses today before speculating about what the future will bring.
Technology’s Direct Impact on Today’s Warehouses
Now we’re back from 1990, let’s take a look around today’s warehouse, but not one of those in your own organisation. Instead we’ll visit a couple of DCs that you’re not familiar with, to get a broad view of how technology is currently impacting warehouse operations.
First let’s visit this distribution centre run by a medium-sized enterprise. Aside from an absence of people with paper, let’s see what evidence we can find of technological impact.
The Partially Automated Warehouse
This warehouse is fairly advanced in terms of technology, but clearly not at the cutting edge. How do we know that?… Well, for one thing the lights are on, so although we can see some signs of automation, this is clearly a warehouse in which people still play a substantial role.
But look, here comes a forklift—without a driver?
Yes, warehouse operations are currently being disrupted by the development of advanced robotic systems, the most basic of which use digital add-on systems to transform forklifts and other types of MHE asset into robots.
A combination of sensors, cameras, lasers, and software can be used to enable forklifts to work alongside people, but without the need for human operators.
Some time ago we published a post about how brewing company Carlsberg uses these automated forklifts to move up to 500 pallets per hour around one of its Swedish distribution centres.
That’s just what we’re seeing here, a prime example of how even more people are being displaced from the warehouse environment by technology. Further examples can be seen if you look around. Over there for instance, you can see a number of pallets on turntables, spinning fast as they are cocooned in shrink-wrap ready for dispatch.
The Fully Automated Warehouse
Now let’s teleport (because we’re using our imaginations, remember?) to a large new distribution centre operated by a consumer goods brand. First let your eyes adjust to the gloom, because there are few lights on here.
This is a fully automated high bay warehouse, housing an automated storage and retrieval system (AS/RS). Linked to the centre’s WMS, cranes on rails fly up and down aisles of racks that extend from the floor to giddying heights above.
The cranes extract pallets using forks and transport them at incredible speed to a conveyor system, which will carry them to a dispatch area and straight into waiting trailers.
Automated warehouses certainly seem to be the ultimate in modern distribution centres, needing very few people to operate, offering high levels of productivity (because as well as being fast, they can operate 24/7/365), and offsetting some of the power they use by operating in an unheated or un-cooled environment, with little if any need for artificial lighting.
That being said, full automation is still a big ticket item in terms of capital costs, often requiring customised warehouse construction to house high-bay storage and specialised infrastructure. That’s why it’s rare to see such advanced levels of technology in use by smaller supply chain organisations.
Automated Warehouse Benefits
For companies that can afford it, and operate in sectors compatible with automated logistics, full automation delivers a great many benefits, including:
- Significant labour cost reduction
- Superior levels of productivity
- A high degree of efficiency
- Minimal risk of processing errors
- Improved inventory management
- Increased supply chain speed
While full automation is still relatively rare, even traditional man-to-goods warehouse operations have been impacted by new technologies, though people may still shoulder the greatest part of the workload. Indeed, few businesses remain untouched by the disruptive influence of information technology.
The IT Impact on 21st Century Warehouses
While automation removes the need for manpower, many companies still consider it either too expensive to implement, or are concerned about the length of time to ROI, which is typically around five years. On the other hand, many software solutions offer a much faster return on investment and are affordable even for smaller businesses.
We’ve already discussed WMS, but other IT applications have also been involved in making today’s warehouse operations more efficient and cost-effective.
Sophisticated analytics help operators find and eliminate process weaknesses; Inventory management software helps companies to optimise stock levels, while modeling tools do the same in construction design and warehouse layout planning.
The Indirect Impact of Technology
When considering the impact of technology on warehouses and distribution centres, it would be remiss to overlook disruptive technology in the wider commercial environment. So before moving on to visit the warehouse of the future, let’s briefly reflect on how warehouse operations have been indirectly impacted by technological advances.
The biggest of these disruptions has been driven by changes in consumer behaviour, which in turn have been enabled by perhaps the most significant innovation of the last century – the Internet.
As consumers have progressed from shopping online to mobile shopping, they have driven a revolution in retail commerce, which has in turn set off a ripple effect to initiate similar changes in business-to-business trading.
Today it’s all about the omnichannel experience—and that has changed the entire supply chain profile in many industries and commercial sectors. All this transformation has led to a distinct shift in warehouse function, from being a staging point for supply chain inventory, to becoming a vital element of the value chain.
The Expanding role of the Warehouse
Few warehouses today are simply storage spaces, but instead host multiple value-adding processes, like just-in-time packaging, assembly, product customisation, and in some cases, customer collection services.
Ironically, the need to add value within warehousing operations has partly slowed the rate at which human operatives become obsolete, since a lot of value-adding tasks require skills that can’t yet be replaced by automation.
The respite however, could be short-lived, as a new wave of disruptive technology emerges—one which many believe will spell the end of the warehouse as a significant source of employment and transform it into a centre of wholly automated activity.
2045 Here We Come
To understand why warehouses may soon be devoid of human presence, we should return to our tour, but instead of jumping straight to the warehouse of 2045, we’ll take a slow sojourn through the next few years to come. Along the way we’ll look at how robotics, sensors, machine-to-machine communication, and the Internet of Everything may make warehouses ever more efficient to operate, while gradually eliminating the need for a human workforce.
Rise of the Robotic Warehouse
In earlier sections of this article, we touched on some of the limitations of current automation technology. To recap, we discussed the need for specialised warehouse infrastructure and the associated cost of constructing purpose-built automated warehouses. We also discovered that some tasks being performed in today’s warehouses require human dexterity and judgment.
All that may soon change, as robotics development begins to solve these problems. However, this article isn’t intended to fuel debates about whether replacing warehouse workers with robots is a good or bad thing.
Instead it’s an attempt to look objectively at future possibilities to improve warehouse operations through the use of technology. So let’s move on and do just that.
Robotics is probably the answer to many automation constraints in warehousing. For example, unlike automated storage and retrieval systems, robotic warehouse machinery (even at the current time) is able to operate in any industrial space, meaning it can be deployed in existing warehouses without expensive structural modifications.
At the same time, robotic capabilities are continually improving; with robots being developed that can perform tasks such as dressmaking, which up to now has always required a human touch. They are also becoming increasingly mobile and capable of multitasking, which means companies will need less machinery to perform more activities.
Robotic Opportunities for All?
If you need evidence of robots’ pervasiveness in warehousing, consider the examples of Amazon, which as of December 2016, had 45,000 robots employed across 20 distribution centres, and bulk grocery superstore Boxed, which replaced 75% of warehouse jobs at one fulfillment centre with robotic order pickers.
By the time we get to 2045, it’s very possible that human warehouse operatives will be a rare sight indeed, as multi-functioning robots become an affordable investment for many companies. Smaller businesses may access robotic technology too, by contracting with third-party warehouse providers which thanks to robotic advances, will make outsourcing the most economically viable way to stage and store inventory.
But What About the Warehouse?
Of course there is more to a warehouse than the operation it houses, and as time goes on, technology will impact warehouse facilities by changing the way they are constructed, maintained, and powered.
Take warehouse lighting for example. If we take a brief hop back to 1990, when you were looking up at all those boxes of papers in the racking, did you notice the forest of light fittings hanging from the ceiling?
Those were probably metal halide, sodium, or florescent lamps, all of which are expensive to run on an industrial level and are constructed using materials harmful to the environment.
These lighting solutions are slowly but surely disappearing from the modern warehouse environment, to be replaced by more economical and environmentally friendly light sources, such as LED and induction lamps.
The cost of lighting warehouses is considerable, since illumination must be bright enough for staff to work productively and safely, so it’s no surprise that companies are quick to take advantage of new lighting technology. LED industrial lighting consumes a fraction of the electricity needed to run conventional lamps, and when combined with management systems using sensors and timers, becomes even more economical.
No Need for Creature Comforts
Moving ahead into the near future, we’re likely to see warehouses make further savings on energy costs as automation takes over. Automated machinery and robots need no ambient lighting to operate, so while lighting may be in place for emergency situations or for service/maintenance purposes, it will seldom be switched on.
The cost of artificial temperature control too, will be minimised, since temperatures will only need managing for inventory quality, not for human comfort.
It’s entirely possible that by the year 2045, the warehouse management system will be much more worthy of the title, able to control every aspect of warehouse operation, including security, receiving, put-away, storage, picking, and dispatch, as well as lighting, temperature control, indirect materials purchasing and even some, if not all, maintenance.
The Living, Sensing Warehouse
In the warehouse of 2045, sensor technology will enable everything from mechanical handling equipment, through warehouse robots and storage racks, to the very fabric of the warehouse structure, to monitor conditions and performance.
Machine-to-machine communication will enable the sensors to relay data constantly to the warehouse management system, while integrated analytics and machine-learning capabilities enable that system to pass instructions back to warehouse robots (perhaps including aerial drones for certain high-level tasks).
Interpreting those instructions, the robots will respond appropriately to perform basic maintenance and repair tasks on the building, MHE, automated machines, and perhaps even themselves or each other… And so the warehouse of 2045 becomes a virtual living entity, capable of taking care of itself and the operations it houses, with minimal need for human intervention.
While a certain amount of human expertise may still be needed, there’s every chance that warehouse managers and technicians will simply monitor the operational status from their homes, using laptops or tablets, make adjustments as needed, and occasionally respond to more serious situations by riding out in their (probably driverless) cars to get hands-on with machinery or inventory.
Warehouses Get Bigger, Smaller, Fewer?
So now, with the help of this article and a little imagination, you have an idea of what the warehouse operation of 2045 might look like, but what we haven’t yet explored is the possibility that technology may impact the very existence of warehouses.
Omnichannel commerce could for example, see warehouses evolve into a combination of mega-centres (hosting operations for multiple companies in shared environments) and urban mini-warehouses, used to place inventory close to target consumer markets.
On the other hand, as technological capabilities develop throughout the supply chain, and techniques such as additive manufacturing make it increasingly possible to produce items on demand, it’s possible that some supply chains may evolve in which warehouses are completely unnecessary. The result could be an overall reduction in the global warehouse footprint.
What are Your Predictions for Warehousing in 2045?
While we can probably all agree on how warehouses looked in 1985, we each have individual and unique perspectives on today’s use of warehouse technology, typically influenced by the operations that we’re most familiar with.
For example, the views in this article are influenced by the projects we get involved in as a supply chain consulting company, but your company may be using technology in different ways, and your take on future developments may be very different.
We’d love to learn what you think about the future of warehouse operations, and the roles technology will play in the warehouse or distribution centre of 2045. If you sometimes like to stretch your imagination a little and combine it with your professional warehouse knowledge, why not do so now and share your predictions in the comments section below?
There are many warehouse processes that includes a good use of technology and other aspects making the field grow better. For instance WMS tools are making the warehouse management processes easier. Thanks for providing such a good information.
Thank you for sharing useful information.there are different technologies that are used in warehouse management.
Wow. Thanks this is helping me so much with my article. I’ll be sure to mention this.
Wear House will be facing challenges of : increased product range, reduced order to execution time , Optimization of space & cost will force for more & more automation. Changes in communication channels will also happen to support reduction in execution time & inventories.
Thanks Ramkrishna. I’m glad you found it useful.
Thanks Rob for your insightful comments and predictions. STS Theory tells us that the work systems must deal jointly with both Tech and Social systems for success. I wonder what role you see people playing within the fully automated warehouses and how the workforce will be required to adapt, support and oversee such systems.
what where the past warehouse activities
Looking like we addressing about the workless society where the people gets 80,000 a year to stay at home ,rumours is that is happening in other countries already and it is already happening in Australia from the corona virus hand out and america
Not quite surew we are there yet, but maybe a 4 day or 3 day week is not far off?