SMART WAREHOUSING
SMART WAREHOUSING: RFID, LATEST TECHNOLOGIES ITS PRESENT TRENDS AND
DRAWBACKS OF SUPPLY CHAIN
DS 825 – LEAN PRACTICES IN SUPPLY CHAIN MANAGEMENT
Project by:
Hemanth Miriyala
WSU ID: F752C378
Institution:
Wichita State University
Wichita, Kansas
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Table of Contents
Abstract ....................................................................................................................................................... 3
Introduction ............................................................................................................................................... 4
Literature review ...................................................................................................................................... 5
Factors motivating the adoption of smart warehouses ...................................................................... 5
Recent technologies adopted in smart warehouses ............................................................................ 7
Internet of Things .............................................................................................................................. 7
RFID ................................................................................................................................................... 8
Discussion and analysis............................................................................................................................. 9
Present trends in smart warehousing .................................................................................................................9
Drawbacks of the supply chain ........................................................................................................................ 13
Thoughts and recommendations .......................................................................................................................... 15
References .............................................................................................................................................................. 17
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Abstract
Smart warehousing is one of the recent approach employed following the growth in the use of
technology. The different operations conducted in a warehouse have been improved through the
adoption of different digital solutions. Due to the evolving nature of technology, this paper highlights
the various present trends that the warehouse industry is experiencing with the use of technology. The
various factors that contribute to the adoption of smart warehouses have also been outlined. The
drawbacks of the supply chain have also been outlined. The covid-19 pandemic is one of the major
factor that has propelled the use of technology solutions in the warehousing industry.
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Introduction
Technology is one of the fast rising industries. Over the last decade, different gadgets and
systems have been developed as solutions to various activities. The effectiveness of the digital solutions
has led to different industries adopting technology gadgets and systems in their operations. Information
technology has revolutionized different industries and the manner in which activities are conducted. One
of the key advantages associated with the growth of technology is data. Compared to traditional
methods, technology enables users to easily collect, analyze, and store data. Data has become a valuable
asset in the operation of an enterprises and institutions. Valuable insight acquired from data offers
direction in the decision-making process and management of operations. The data-based approach in the
utilization of technology systems has improved performance and overall productivity.
Warehousing is one of the areas that have experienced major changes due to the adoption of
technology solutions. With the rapid innovation experienced, the use of digital software systems and
gadgets has led to a shift in warehousing from the traditional centralized approach to a decentralized
production process. Different activities are conducted within a warehouse which include receiving,
storing, picking, and shipping. All these activities are complex which has offered opportunities for the
development of digital solutions. Although traditional warehouses were efficient, various challenges
were faced in their operation. One of the major issues faced was the process of recording and storing of
inventory. The use of written paper was time consuming and made the process of retrieving information
tedious. Traditional warehouses were also dependent completely on human resources. Data sensitivity is
another issue that was faced in the use of traditional warehousing methods. The growth in the
development of new technologies has brought about a major shift in the way the complex activities are
conducted. This paper aims to offer more insight into the present trends in smart warehousing and
challenges in the supply chain.
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Literature review
Factors motivating the adoption of smart warehouses
The rise in the use of technology in business operations has led to the rise in competition within
different industries. The adoption of smart warehousing is one of the strategic measures that
organizations have employed with an aim of improving their competitive ability. The occurrence of the
covid-19 pandemic was one of the factors that brought about the necessity of technology solutions for
business operations. Due to the regulations implemented that prevented human interaction, majority of
businesses were unable to operate their warehouses or conduct operations at all. E-commerce
experienced a major growth during the pandemic since technology solutions enabled remote access and
operation. With a majority of organizations adopting digital solutions, smart warehousing has also been
on the rise with the trend for higher efficiency and performance.
The use of smart warehousing has been influenced by different factors. The shift in consumer
habits is one of the influencing factors that have encouraged the adoption of smart warehouses.
Information technology has brought about a major shift in consumer habits. The shopping processes
used today have shifted to being more complex and involve various technology tools. Companies,
therefore, require faster and reliable systems that enable a better response time. The traditional
warehouses that did not rely on digital solutions cannot be able to meet the customer demand. Online
shopping became the new trend of acquiring goods and services from companies mainly during the
pandemic. Through the use of technology gadgets and the internet, the target market can easily access
and place orders at the convenience of their home. The use of smart warehousing has become a necessity
in the current modern world. Companies that still utilize traditional warehousing face major competition
due to their limited market share. Use of real-time data in the process enables companies to efficiently
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meet the needs of the target market. Smart warehousing is a strategic approach that recent companies are
employing in order to acquire a higher competitive advantage.
Smart warehousing has also been an efficient tool in minimizing losses in the operation of
enterprises. The different technology systems employed in smart warehousing utilize data to optimize all
operations. Relying on data also offers a business organization with valuable insight into the different
areas that require improvement. Tracking of data on the different processes also aids in ensuring
transparency and accountability. In the use of smart warehousing, there is a reduction of errors in
operation. The technology systems promote a culture of transparency in all operations. Due to the ease
in the collection, assessment, and storage of data, any cases of errors can be easily identified and
resolved. The use of smart warehouses enables companies to perform with the operational agility
required within the current digital world. The adoption of smart warehousing has brought about a
decreased operational cost. Through the use of different technology systems for operation, the need for
human labor that is unnecessary is reduced. Optimization of the activities performed in a smart
warehouse leads to an improved performance with lower cost.
Shipping is another factor that has contributed to the adoption of smart warehousing. Traditional
warehouses involved a lot of complex activities that relied on human labor. Smart warehousing has been
an efficient solution that reduces errors that might occur in the process of picking orders. With a rise in
the use of e-commerce for shopping, the use of smart warehousing ensures there is better customer
experience. Through the use of the different digital solutions, companies have been able to achieve
faster shipping that efficiently meets the needs of the market. This aspect offers a company valuable
competitive advantage in the market which leads to higher profitability. The use of smart warehouses
has enabled a higher competitive advantage of organizations in the current digital world. Another major
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aspect that contributes to the adoption of smart warehousing is fewer returns. The processing of orders
in smart warehouse is conducted using reliable systems. Although errors caused by human beings are
common, automation of a system increases efficiency and order accuracy. The target market is usually
well satisfied in the adoption of the system which leads to a positive company reputation.
Recent technologies adopted in smart warehouses
Internet of Things
Different technology systems have been applied in the operation of a smart warehouse. The
application of technology can be based on a data-providing function or systemic level. One of the areas
where major challenges were experienced is inventory management. In the traditional warehouse, the
process of inventory management involves complex activities that are time consuming. Human errors is
one of the major issues associated with the use of the traditional warehouse. Warehouses in the current
digital world have leveraged the Internet of Things (IoT) technology as a solution to some of the
challenges experienced. The IoT technology has been useful in enabling the connectivity of different
technology gadgets and software systems to a common network. The different devices utilized in the
daily operations can be easily connected and monitored through IoT. The technology system has brought
about major changes in the operations conducted within a warehouse.
Tiny computer processors and gadgets have been utilized in the IoT to enable connectivity.
Sensors and actuators are key components of IoT technology. The sensors are devices that are useful in
the process of data collection from the environment. Once data is collected and processed, it is then
transferred to the actuator which initiates an action based on the data received. One of the areas where
IoT is deemed useful in a smart warehouse is the management of assets. Through the deployment of IoT
sensors on the shelves, there is the transmission of real-time data on the different conditions to be
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measured. Management of assets in an organization using IoT also involves accurate tracking in the
transport process. Inventory management is another area where IoT has brought about major
improvements. Through IoT technology monitoring all actions made and processes involving data, a
smart warehouse manager can be able to optimize the inventory to ensure higher accuracy in operations.
RFID
Another information technology system adopted in the operation of a smart warehouse is radiofrequency identification (RFID). The technology system functions through the use of electromagnetic
fields to acquire data on a product. Unlike the traditional warehouse approach that utilized documents to
capture data, the technology involves the encoding of data in RDIF tags. RDIF technology has been
integrated with IoT to enable the access of more accurate data. The RDIF tags have been known to store
more data than barcodes. Some of the information that can be acquired from the RDIF tags include the
serial number, manufacturer, expiration data, serial number, and the production line. An RDIF reader
has been determined to be faster and more efficient since it can scan a high number of tags at once.
RDIF technology has been useful in the prevention of overstocking. Overproduction of goods is
one of the issues affecting the e-commerce field. Through the application of RDIF technology, real-time
data can be provided through the tags which offers direction on the amount of goods required based on
the target market. To ensure high efficiency of the smart warehouse, the RDIF tags should be placed on
all assets and inventory. Real-time tracking of the assets and inventory in the smart warehouse will
ensure the optimization of the different systems and processes involved in operation. Any trouble with
the operations can be easily identified and mitigated which ensures high performance and productivity.
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Discussion and analysis
Present trends in smart warehousing
One of the recent trends identified in smart warehousing is the aspect of automation. Through the
covid-19 pandemic, many companies faced a shortage of human labor which led to decreased
productivity and performance. The regulations implemented led to understaffed companies and
warehouses. The use of technology is one of the solutions that were adopted by the different companies.
The demand for faster and more reliable delivery of goods or products to the target market has been on
the rise due to the use of technology solutions. One of the challenges associated with warehouses is
safety of employees. Cases of accidents in warehouse operations have led to decreased human labor and
leads to companies being unable to retain its employees. The pandemic also led to a majority of
employees being scared to show up at work due to the fear of being infected. Different organizations
have, therefore, looked for ways to integrate digital solutions in their warehouses to reduce the need for
human labour. An increased trend in the adoption of automation systems is one of the approaches
employed by many warehouse facilities.
Automation in a warehouse can be conducted either digitally or physically. Digital automation
involves the reliance on information technology systems in the operation of manual and repetitive tasks.
Different software and electronics have been involved in the process of automation. One of the recently
used digital automation is the warehouse management system (WMS). The platform has been a key
contributing factor to enabling automation and simplification of the different processes involved in a
smart warehouse. A warehouse management system is usually equipped with tools and features that
improve inventory-related issues. The system has capabilities such as inventory management, order
allocation, stock locating, and picking.
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The technology platform has played a major role of ensuring all the processes in a smart
warehouse are streamlined and automated which increases performance. Organizations that have
adopted the system have been able to optimize their inventory alongside other operations. WMS has
enabled smart warehouses to efficiently meet the needs of the target market through ensuring the order
accuracy. Lower operational costs is a factor that has been determined to contribute to the adoption of
WMS. Due to faster and more reliable operations, the system has been adopted by different smart
warehouses with the objective of acquiring some of the benefits associated with the system.
Physical automation is another approach employed in smart warehouses. This strategy involves
the use of equipment to reduce the need for human labor. Automated guided vehicles (AGVs) are some
of the gadgets used in smart warehousing to ensure the automation of operations. The gadgets are useful
as load carriers and also systems that handle materials autonomously in a smart warehouse. AGVs have
been utilized in accomplishing various tasks within a warehouse such as transport of raw materials
without the need for any human intervention. Different types of AGVs have been developed to enable
the completion of complex warehouse tasks such as forklift AGVs and towing AGVs. More smart
warehouses continue to adopt AGVs as a solution to the need for automation. The gadgets have been
useful in improving the warehouse safety due to minimal cases of errors in operations.
A persistent shortage of labor is another trend experienced in smart warehousing. The global
forecast in the number of warehouses demonstrates a rise in the number of warehouses expected in the
future. The ability of companies to acquire a reliable workforce that meets the demands has been
determined to be quite a challenge. Warehouse operators are expected to engage in more automation of
the different operations. Technical skills for the operation of the different technology systems in
warehouses will also be a challenge faced. With the development and use of new technology systems,
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acquiring skilled labor is quite a challenge. For higher efficiency, companies are likely to implement
training programs that offer employees with the necessary skills required for the operation of the
different technology systems. This approach will lead to the development of skilled workers who will
help smart warehouses realize the benefits of automation easily.
Health and safety concerns have been an issue affecting the overall warehousing industry. A
number of employees have faced various health and safety hazards when working in a warehouse.
Heavy equipment is one of the aspects that have potential danger to the well-being of employees. Use of
heavy equipment in operations has been associated with many accidents within a warehouse. Moving
parts of machines in a warehouse also predispose the employees to potential health hazards. The lack of
proper use of machines has been associated with catastrophic effects. Ensuring employees pay attention
to the warning labels should be an adopted common practice within any warehouse. Falling objects have
also been a major concern for the health of the staff working in warehouses. Since items are usually
staked high in most warehouses, cases of falling objects can harm employees.
The health and safety concerns demonstrated in the warehouse industry have been a major factor
in the reduction of labor. The health concerns have also been determined to be a factor that might be
keeping workers away from the industry. Due to this trend, the safety of employees will be a cause for
automation. The different technologies aimed to be integrated into smart warehousing will be assessed
to determine whether they aid in ensuring a safe environments. Through automation, smart warehouses
will be capable of offering a safe environment for all employees and avoid injuries. One of the
innovations that will aid in minimizing cases of injuries is robotics. Lifting injuries are the most
common health issue affecting employees within a warehouse. The use of warehouse robots designed
for lifting heavy objects offers a better and safe environment for employees.
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Fatigue of employees is another issue associated with working in a warehouse. Due to the
tedious and energy-intensive activities, employees have been unable to meet high productivity in
warehouses. Fatigue has also been identified as a major cause of injuries and accidents in warehouse
operations. Through the use of robotics, employees are able to easily complete their duties quicker
which improves the overall performance and productivity. The warehouse industry has been showing
more concern over the safety of employees which is expected to be a motivating factor in the
development of better and reliable technology systems that ensure high performance and a safe
environment. By prioritizing the safety of employees, the industry is likely to experience an increase in
the job appeal and retention of employees.
Another trend in the warehousing industry is the research and development towards dark
warehouses. Such warehouses have been known to function completely without any human intervention.
A dark warehouse is usually comprised of gadgets, machines, and software systems that are all
interconnected. For a warehouse to be dark, automation of all activities is necessary for efficiency. Some
of the equipment used in dark warehouses include sensors, scanners, automated robots, and sorters. The
use of dark warehouses will be useful in ensuring high performance and solves the issues related with
human labor. The although full concepts of a dark warehouse are still under study, some warehouse
operators have started to adopt different systems and gadgets that encourage automation of processes in
a warehouse. The high productivity associated with the use of a dark warehouse can enable a company
to process big orders effectively.
One of the technology solutions that has been adopted as a software that can enable the operation
of a dark warehouse is the warehouse execution system. The technology has been known to function
through the optimization and streamlining of work processes such as receiving and picking. Warehouse
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execution systems have been known to evolve from the already existing warehouse control system. The
adoption of the system has been associated with an increased managerial efficiency. The management of
a warehouse is able to easily monitor effectiveness of operations through the real-time data used by the
system. The adoption of dark warehouses will however contribute to the gap in skills required for
efficient warehouse operation. The warehouse approach encourages an increased accuracy in operations.
A warehouse that is operated through technology solutions only is likely to have minimal to no errors at
all in operation. The adoption of dark warehouses also enables a company to ensure the continuity of
their operations without the need for breaks in comparison with employees. Although the innovation for
the successful and efficient operation of dark warehouses has not yet been fully determined, more
companies have adopted different digital solutions that will enable complete connection of all gadgets
and software systems.
Since the smart glasses are user-based, they require minimal training to be used in warehouse
operations. Smart glasses have been useful in helping employees with visual guidance by reducing the
time taken in the location of items and different parts of the warehouse. Immersive reality has been
useful in minimizing the errors made in the process of picking within smart warehouses. Virtual reality
has been a tool used by companies to offer employees training on the different activities that are
conducted. Immersive reality has also been an efficient tool in decision-making that offers visualization
as part of process. More operations in smart warehouses are utilizing immersive reality as a tool to offer
more visual context and ensure high performance.
Drawbacks of the supply chain
Although smart warehouses have bought about a major change in the operation of the different
activities, the different technology systems also have various drawbacks in the supply chain. For the
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operation of a smart warehouse, data is one of the important assets involved in the daily operations. The
initial cost of installation is one of the major challenges faced in the use of technology solutions.
Although high performance is expected, the initial investment has led to the decline in the number of
companies utilizing the different systems and gadgets. The automation of the different operations in the
warehouse also requires reliable technology solutions.
Cybersecurity is another major drawback in the use of technology solutions for operations.
Unauthorized access to private data has been a major issue in the information technology industry.
Malicious online users have developed various methods and malware to acquire access to private
company data. In the supply chain, cases of cyber-attacks can have catastrophic effects on the
operations. Companies that adopt smart warehousing have become susceptible to cyber-attacks which
also predisposes the supply chain. The occurrence of a cyber-attack in the supply chain can lead to the
loss of reputation and the market share of a company. Lack of labour is also another issue faced in the
supply chain. The warehousing industry has had health and safety concerns due to high cases of
accidents. Due to the tedious activities involved in the operations, employees are exposed to various
risks due to fatigue. The supply chain also lacks enough employees to efficiently meet the needs of the
target market. There has been a shortage of drivers involved in the process of delivering the product to
the target market.
The reliance on a limited number of suppliers is another drawback of supply chain. Automation
of warehouse activities offers a warehouse with the option of different trading partners for high
efficiency. The lack of diversification of suppliers leads to a major challenge in cases of delays or
unavailability. The technology advancement of suppliers is a factor that is considered in smart
warehouses. Due to the automation of a majority of processes, not all suppliers have implemented
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compatible technology systems which is a limiting aspect. With the adoption of new technology
solutions in smart warehousing, the pricing of the commodity. The lack of clear communication of the
pricing of commodities is another issue faced in the supply chain.
Meeting the needs of the customer is another drawback experienced in the supply chain.
Although smart warehousing enables the proper development of the desired end product, delivery to the
target market faces. Ensuring the quality of the goods produced is a critical factor that is necessary for
the successful operation in the supply chain. Some products developed require specific conditions and
gadgets in transit to ensure the maintenance of the quality. Smart warehouses face the challenge of
ensuring the supplier maintains the standard of the end product through employing different monitoring
techniques
Conclusion:
Information technology being a rapidly evolving industry has brought about major changes in
operations within warehouses and the supply chain. Different technology systems have been applied in
the operation of warehouse activities. Different present trends in smart warehousing have been outlined
in the paper. Various technology systems have been applied in smart warehouses to enable better
efficiency in operations and increased productivity. The future of smart warehousing aims to minimize
human labor and enable automation. A majority of the recent trends aim to make the necessary changes
to ensure better and more efficient automatic operations.
Thoughts and recommendations
1) Use of data analytics in both smart warehousing and the supply chain – data analytics is
an information technology system that functions to offer valuable insight through the
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processing of real-time data. Adoption of the technology will offer insight into hidden
trends and patterns which enables better decision-making.
2) Adoption of blockchain technology in the supply chain- through the use of blockchain,
suppliers will be able to conduct better and faster deliveries which aids in meeting the
needs of the target market. The traceability of the products from a warehouse to the target
market is higher and more reliable. Blockchain also enables the development of a
transparent relationship between suppliers and warehouses. Blockchain technology is also
an efficient solution to the issue of data security.
3) Automation of operations in the supply chain is necessary – with the number of smart
warehouses being on the rise, automation of the supply chain is also a necessary initiative
that would aid in streamlining the activities involved from production to the delivery to
the desired market. The new technology innovations should also be applied in the supply
chain for higher performance and better customer satisfaction.
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