IoT: The solution for warehouse operations
Internet of Things (IoT) is playing an important role in the modern warehouses by helping in automating the warehouse operations, such as packing, put away, goods receiving, and kitting to outbound logistics using connected devices, such as RFIDs.
Supply chain management plays a crucial role in scheduling and planning the logistics and transportation activity. IoT can ensure real-time inventory monitoring throughout the supply chain; starting from the ordering of materials to the delivery of the shipments to the third-party logistics (3PL) warehouses or the end customer. IoT integrates mobile technology and various devices, such as sensors and RFID devices, among others, can optimize the warehouse processes.
According to Grand View Research, Inc., the global IoT in warehouse management market is anticipated to reach USD 19.06 billion by 2025. The growing adoption of the Goods-to-Person (GTP) technology in warehouses would be the key driving factor for this market.
Growing number of connected devices
The telecommunication industry has evolved significantly over the past few years. Advances in telecommunication coupled with the innovations in electronics have led to a seamless wireless network and connectivity that are allowing users to stay connected as well as to find and share information. The growing adoption of connected devices across various sectors is expected to increase the efficiency of the warehouses.
The Global Web Index (GWI) has revealed that over 2.80 billion users would be using the internet over their phones by 2017 and they would account for more than 85% of the total internet users across the globe. Over the past few years, the internet has emerged as a universal source of sharing information across various industries and sectors. It has also revolutionized the way people and devices are communicating with each other. The mobile, clutter-free wireless technology has been the key to the evolution of the internet.
The growing number of machine-to-machine (M2M) applications, such as video surveillance, smart meters, health monitoring, and asset tracking, is expected to drive the growth of the connected device market. The IoT-enabled applications are anticipated to revolutionize the digital consumer experience. Additionally, increasing telematics related regulations by various governments are expected to propel the connected trucks market over the next decade.
Increasing automation in warehousing
The growing automation has brought around a shift in the conventional warehouse operations by allowing companies to maximize their throughput. Automated materials handling (MH) equipment, robotics applications, and high-speed conveyor systems are helping in achieving order accuracy.
Automated warehousing systems can increase the storage capacity by almost 400% as compared to the conventional forklift operations. Additionally, automation can also open opportunities to utilize the additional space for other activities, such as manufacturing and offering value-added services.
Operators across the globe are already using RFID readers, barcode scanners, and other handheld devices to streamline the shipping and inventory management. Moreover, warehouses would soon have to undertake additional tasks, such as packaging, and provisioning of customers services and value-added services, as a result of the growing e-commerce industry. At this juncture, the automation of warehouses would ensure transparency in the work environment. The growing need for automating the logistics process has prompted the robot vendors to rely on software to enhance the productivity of their solutions and ensure seamless operations.
Key opportunities prioritized
Penetration to as the maturity of the product segment and its application. The lower penetration rate means a higher untapped market potential for growth.
Growth rate is considered as the future projected CAGR till 2025 by Grand View Research, Inc.. These growth rates are comparative in nature, with the overall market growth rate as the benchmark.
The North American region is witnessing the most significant penetration of the IoT in warehouse management market and possesses greater growth opportunities for companies considering long-term investments. The existing large consumer base coupled with the increasing penetration of connected devices are the major factors driving the North American regional market. The industry players are looking forward to the Asia Pacific region encouraged by some favorable developments, such as the launch of the Digital India initiative and the introduction of GST in India, which is expected to spur the portable devices market.
Smart IoT-powered manufacturing can potentially transform businesses into efficient, practical, and autonomic organizations capable of predicting and fixing potentially disruptive issues. While the operations of such businesses would continue to evolve, profitablity of these businesses would continue to increase in line with growing levels of customer satisfaction. According to the International Federation of Robotics, industrial robot sales increased by over 29% in 2014. Given that leading manufacturers, such as Bosch, Cisco, General Electric, and Siemens, have been adopting smart manufacturing techniques as part of the adoption of Industrie 4.0 in their manufacturing plants, IoT industry has been finding opportunities in the production and manufacturing industries.
Several key manufacturers are undergoing mergers and acquisitions to expand their geographic presence and exploit the growth potential of the market. Companies are utilizing the large volumes of data regarding consumer behavior, products, and processes to achieve product differentiation and transformation.
The industry incumbents are aiming for a greater share in the market through differentiated product offerings, brand loyalty, and aggressive investments in research and development. Prominent industry players are also trying to expand their geographic coverage by targeting the emerging economies as their major business areas. Vendors are trying aggressively to enter into long-term commitments with customers in these economies.
Argos Software of the U.S., Eurotech SpA of Italy, GT Nexus of the U.S., and IBM Corporation of the U.S. are some of the major industry players. Given that M2M communication includes industrial instrumentation and application software, the service providers are particularly trying to create value to the customers by offering solutions that can ensure better communication between the sensor technology and the network layer. Service providers are also trying to attract customers by offering solutions that can reduce the costs of operations and by rolling out new services.
- In December 2016, Software AG acquired Zementis, an artificial intelligence company based in the U.S. This acquisition allowed the company to expand its artificial intelligence portfolio.
- In November 2016, SecureRF Corporation launched an IoT security solution for low resource RISC-V devices.
- In October 2016, IBM Corporation partnered with Honeywell International of the U.S. to provide solutions for IoT-based retail operations.
- In September 2016, Software AG partnered with Cumulocity of Germany as part of the company’s efforts to expand its digital business platform.
- In August 2016, Omnitracs, LLC launched its FleetScience digital hub for the transportation and logistics industry.
Upcoming trends: Use of wearable devices in warehouse management
Apart from tracking assets and inventory around the warehouses, IoT can also help in improving the performance and capabilities of the workers. It is very common for warehouse operators to hire temporary workers to handle the increased demand associated with the peak season. Ensuring an accurate and easy-to-use technology for these employees would be of paramount importance if they were to handle the increased demand efficiently. Augmented reality and wearable devices are the some of the options that are being explored at present.
Smart glasses are particularly gaining traction in the market by replacing the conventional traditional barcode scanner and paper method. Companies are adopting a process called “Vision Picking”, which envisages combining augmented reality and smart glasses. For instance, DHL Global conducted a pilot using smart glasses and realized a 25% improvement in the picking process.
In emerging economies, IoT-enabled warehouses are still in their nascent stages, as incumbents of the warehousing industry are still testing different approaches and applications to adopt IoT in warehouse management.
Greater stock visibility would benefit warehouse operators, as it would help in ensuring the workers’ safety as well as in retail loss prevention. This is because knowing the exact location of an item in the warehouse in real time would help in preventing accidents involving workers and equipment as well as in curbing thefts from warehouses.
Looking forward, the 3PL operators and shippers are expected to synchronize through a homogenous, connected ecosystem in order to ensure the most efficient delivery experience for the businesses as well as the consumers.