Warehouses are the backbone of supply chain operations, serving as the hub for storing, sorting, and distributing products. As the backbone, more companies are turning to advanced technologies to improve efficiency and productivity. One such technology is artificial intelligence (AI).
AI is already significantly transforming how warehouses operate, from automated order fulfillment using AI-powered robotics to real-time inventory management and predictive systems that optimize equipment uptime. And with continuous advancements in AI technology, this transformation is set to accelerate.
This post explores seven ways AI will continue to transform warehouse management. But before we go any further, we must understand what we mean when discussing AI in warehousing.
What is AI in warehousing?
When discussing AI, terms like machine learning and natural language processing often get thrown around, making the concept seem complex and hard to understand.
Simply put, AI can be considered an artificial brain created by computers, with algorithms at its core that enable it to learn from data and make decisions.
This smart technology can help you perform warehouse processes that usually require human input, such as sorting items, managing inventory, and predicting equipment failures.
Because AI can process large amounts of data at lightning speeds, it can perform these tasks much quicker and more accurately than humans, leading to greater efficiency and productivity in the warehouse.
With that out of the way, let’s examine how AI is improving warehouse management.
7 ways AI is transforming warehousing
1. Automated order fulfillment
Manual picking, packing, and sorting can lead to incorrect orders, unnecessary delays, and unhappy customers. However, many companies now use AI-powered robots that can work without breaks and handle repetitive tasks much faster and more accurately than staff. The result? Increased accuracy, reduced errors, and faster order fulfillment, which improves delivery times and customer satisfaction.
For example, Amazon uses an AI-powered robot called Sparrow to locate, retrieve, handle, and move individual products within the warehouse. FedEx, in turn, uses a sorting robot to organize and categorize items based on destination to help deal with their growing volume of e-commerce shipments. The robot has a barcode reader to scan and obtain the relevant destination information.
2. Real-time inventory tracking and management
Inventory management remains a critical challenge for warehouses, with those relying on traditional systems struggling with inefficiencies and errors due to all the manual effort. AI systems provide real-time visibility into inventory levels in a way that traditional inventory management systems simply cannot. This allows you to anticipate demand fluctuations, optimize stock levels, and reduce the chances of stockouts.
They do this by leveraging advanced technologies such as the Internet (IoT) and RFID for continuous tracking and machine learning for accurate demand forecasting. IoT refers to an interconnected system of device`s embedded with sensors that can exchange data with one another. In contrast, machine learning refers to algorithms that enable computers to learn from data and make predictions.
In the context of warehousing, IoT sensors can be strategically placed throughout the warehouse, capturing the location and movement of inventory. They capture this data via RFID tags located on pallets or containers. This data and information from other sources, such as warehouse management systems (WMS), seamlessly integrate with the AI system and is available in real time in a centralized system for analysis.
Machine learning algorithms also analyze historical sale data and market trends to forecast inventory needs. Because they can adapt and improve over time, they benefit from retraining as new data emerges, so their predictions remain accurate. This helps ensure that stock levels meet customer demand, reducing the risk of excess stock or shortages.
3. Predictive maintenance that minimizes equipment downtime
AI’s predictive capabilities extend beyond inventory management to include monitoring machinery—a critical resource that warehouses cannot operate without. If machinery like conveyors and forklifts break down, it can lead to significant delays and costs.
By continuously analyzing data from IoT sensors and equipment, AI can detect anomalies and predict when failures could occur, allowing for the scheduling of proactive maintenance during non-peak hours.
This proactive approach not only reduces the risk of costly equipment downtime to ensure there’s no disruption to business operations but also enhances warehouse safety. Many companies in the logistics sector, like DHL and General Electric, currently implement AI-driven predictive maintenance systems.
4. Optimizing warehouse operations
AI’s ability to process large datasets at speed and identify patterns humans might miss is especially useful for streamlining warehouse operations.
AI can analyze data related to layout design, picking routes, and other operational processes to identify improvements. This enables you to optimize space to store more products and reduce costs, identify the most efficient picking paths to cut down on travel and picking times, and pinpoint bottlenecks in other processes to enhance overall warehouse efficiency.
5. Enhanced workplace safety
Accidents can occur due to staff not following safety protocols or mishandling equipment. AI video systems can monitor the warehouse floor to identify potential hazards like spills or leaks and unsafe behaviors like wearing incorrect safety gear or using improper lifting techniques.
These systems provide immediate feedback to supervisors and workers in real time, enabling prompt corrective actions, reinforcing safety protocols, and ultimately ensuring a safe working environment.
6. Improved quality control and assurance
Quality control ensures products meet specific standards before shipment. While any quality control process is better than none, manual processes are time-consuming and can result in errors, potentially missing certain defects.
AI technologies like computer vision can inspect products for defects more accurately and efficiently than humans, especially at scale. These visual inspection systems typically use cameras and machine-learning algorithms to interpret the visual information from images or videos.
Companies providing these types of advanced inspection systems and software include Cognex and Keyence. These systems can be integrated into existing warehouse processes and systems to automate inspections.
7. Support for your sustainability initiatives
Sustainability has become increasingly crucial to warehouses as they become aware of their environmental impact. This awareness is driving companies to implement energy-efficient practices, reduce waste, and comply with regulatory standards.
AI can help you implement sustainability initiatives by optimizing various processes. For instance, it can optimize lighting and climate control based on real-time occupancy and environmental conditions to reduce energy usage. E.g., lights and HVAC systems can automatically adjust or turn off in unoccupied areas.
AI can also improve packing processes to reduce manufacturing waste. For example, AI can suggest the most efficient packaging configurations by analyzing data on product dimensions, packaging materials, and order volumes.
In addition, AI can adjust delivery schedules by fine-tuning routes and consolidating shipments, minimizing fuel usage and carbon emissions.
Finally, AI can assist with sustainable inventory management practices by accurately predicting demand, reducing excess stock, minimizing waste, and ensuring resources are used efficiently throughout the supply chain.
AI is here to stay
AI is transforming warehousing as we know it, from real-time inventory tracking using IoT and RFID technology to automated order fulfillment and visual inspection systems that ensure the products you ship are free of defects.
By embracing AI, you can significantly improve the efficiency and productivity of your warehouse, enabling you to more effectively compete in the market and meet the growing demands of modern supply chains.