What is a smart warehouse? Advantages and disadvantages of smart warehouse compared to traditional warehouse

Many different technologies can be involved in smart warehouses, such as artificial intelligence and robotics. By using these technologies, smart warehouses can improve fulfillment accuracy, restock products faster, fulfill orders more efficiently, and increase productivity.

Forward-thinking businesses are embracing the idea of smart warehouses. With rapidly evolving consumer expectations and the disruption caused by the current pandemic, building a modern warehouse is essential to stay competitive.

What is a smart warehouse?

A smart warehouse, also known as an automated warehouse, is a large building that stores raw materials and manufactured goods, using machinery and technology to complete warehouse operations. Smart warehouses process requests at a faster rate than traditional warehouses.

Warehouse operations include identifying and taking orders, counting products, storing products and remembering where they are later, and sending orders to the right place. Warehouses automate nearly the entire operation and journey of goods from supplier to customer, with negligible errors.

They combine multiple automated and interconnected technologies to create a technological environment where goods and requests can be received, sorted, organized, identified, and prepared for shipping automatically. The collaboration between these technologies enables warehouse workers to increase the productivity, quality, and efficiency of their facilities while reducing the number of errors that occur and minimizing the amount of human labor required.

7 Must-Have Smart Warehouse Technologies

Here are 7 technologies you need to have access to in your warehouse today:

1 - Warehouse Management System (WMS)

A Warehouse Management System (WMS) should comprehensively consolidate all of your critical warehouse data into one easily accessible platform, to provide selected members of your supply chain with a complete view of your operations, lightning-fast reporting, real-time statistics, and accurate planning capabilities.

Benefits of using a warehouse management system:
Real-time access to quality data that helps you increase visibility across your entire supply chain
Accurate demand forecasting
Reduced labor costs due to efficient labor allocation
Streamlined warehouse processes
Optimized warehouse layout
Improved pick accuracy
Reduced time between picks
Improved warehouse flexibility and responsiveness
Improved warehouse security and safety
Improved supplier relationships
Improved customer service levels
Ability to implement a continuous optimization strategy

2 - Automated Picking Optimizes Warehouse Picking

In high-volume distribution centers with high labor costs, manual picking poses many risks and limitations. The optimal solution to this problem is an automated picking tool. This system supports or completely replaces humans in the picking process, combined with material handling equipment such as automatic retrieval and storage systems, helping goods to be delivered to customers quickly and accurately.

Benefits of applying automatic picking tools:

Automated systems help minimize human errors, ensuring high accuracy in the picking process.
Automated systems can operate continuously 24/7, helping to shorten picking time and increase operating efficiency.
By automating picking, employees can focus on higher-value tasks, contributing to improving the overall efficiency of the warehouse.
Automated systems help minimize errors in picking, limit loss of goods and improve service quality.

Warehouse management system (WMS) optimizes automatic picking operations

Warehouse management system (WMS) plays an important role in optimizing picking operations with automatic tools. WMS is designed to streamline warehouse operations, helping to improve picking efficiency by:

Automating location calculations, storage facilities and path selection, WMS eliminates manual calculations, reduces errors and saves time.
WMS allocates picking staff and equipment efficiently, ensuring operations run smoothly and without interruption.
WMS helps track the location and quantity of goods in the warehouse, ensuring goods are always ready for picking.

3 - AGV

AGV (Automated Guided Vehicle) is a breakthrough solution, bringing great improvements to the storage and retrieval of goods in the warehouse. This system completely automates the process of transporting goods, from putting, loading, to warehousing, helping to optimize efficiency and save costs for businesses.

Advantages:

AGVs move automatically along pre-set digital paths, completely eliminating human involvement in transporting goods.
AGVs operate continuously 24/7, without needing to rest, helping to increase the productivity of transporting goods many times over compared to manual methods.
AGVs are equipped with advanced positioning and navigation systems, ensuring accurate movement along paths and avoiding collisions.
AGV systems can be easily deployed in existing warehouses without changing the layout or system. Businesses can flexibly add AGVs when transportation needs increase.
Automated transportation helps reduce labor costs, maintenance costs and repair costs due to accidents.

Diverse applications:

AGV self-propelled vehicles are widely used in many different fields such as:

Transporting raw materials, finished products, and goods in warehouses.
Transporting components and spare parts in the production line.
Transporting goods in distribution centers and warehouses.

Improving storage and retrieval efficiency with AGV:

4 - Automated storage and retrieval systems (AS / RS)

Automated storage and retrieval systems (AS / RS) have been around for many years and play an important role in improving warehouse efficiency. However, in the past, AS / RS was often considered expensive, cumbersome and inflexible. Today, AS / RS has been significantly improved, overcoming previous limitations and bringing many outstanding benefits to businesses:

Benefits:

AS / RS completely automates the process of storing and retrieving goods, minimizing the need for labor, saving labor costs and improving operational efficiency.
Can be designed modularly, easily expanded or contracted according to business needs, suitable for many different warehouse scales.
High precision operation, minimizing human errors, ensuring goods are stored and retrieved in the right location, minimizing loss and damage to goods.
Thanks to automation and high precision, AS/RS helps speed up storage and retrieval of goods, optimize logistics processes, improve productivity and operational efficiency.
Provide a detailed information management system on the location, quantity and status of goods in the warehouse, helping businesses easily track and control inventory effectively.
Help reduce occupational accidents due to manual transportation of goods, creating a safer working environment for employees.

5 - IoT deployment

Internet of Things - Iot helps you control all moving parts of the warehouse. IoT can help your warehouse mitigate risk and avoid mistakes or accidents that can create supply chain losses through early detection.

Warehouse sensors can monitor temperature, humidity, and other conditions.
Data from transportation, vehicles, and the products themselves can be combined to reduce theft, counterfeiting, diversion, and damage.

Whether automated or manual, an IoT system will synchronize all your data into one easily accessible network, optimizing your inventory control, labor planning, and customer experience.

6 - Artificial Intelligence AI

Artificial Intelligence (AI) is revolutionizing every industry, and logistics is no exception. AI's ability to boost productivity and reduce errors is attracting the attention of many businesses, helping them take their warehouse operations to a new level of efficiency.

Application of AI in logistics:

Optimizing product picking paths, AI-powered picking robots can automatically determine the most efficient route to move through the warehouse and pick the necessary products. As a result, time and effort are saved to the maximum, improving operational productivity.
AI systems can analyze product type, quantity, size, and weight to determine the most suitable packaging for the shipment. This helps save packaging costs and optimize storage space.
Automatic product packaging, the AI system will calculate the most space-saving packaging method, helping to minimize waste and optimize warehouse efficiency.
AI combined with computer vision and machine learning algorithms helps businesses manage inventory effectively, track the exact location and quantity of products, and optimize shipping routes in the warehouse, saving time and costs.

Benefits of applying AI in logistics:

Improve operational productivity
Reduce errors and mistakes
Save labor, packaging, and transportation costs
Optimize storage space
Improve inventory control and management
Improve customer service

7 - Mobile devices

Previously, warehouse management relied heavily on desktop computers, causing inconvenience for employees who had to move around the warehouse constantly. However, today, mobile devices have become the new standard in the logistics industry, bringing many outstanding benefits to businesses.

Benefits:

Employees can easily access inventory information, order data, product locations, etc. right on their mobile devices, helping them perform their work more efficiently without having to move to a fixed computer.
Using mobile devices helps reduce travel and waiting time, while allowing employees to perform multiple tasks at the same time, improving productivity.
Mobile devices help employees easily communicate with each other and with management, supporting more effective work coordination.
Employees can work anywhere in the warehouse, not limited by a fixed computer location.
Using mobile devices helps reduce errors due to manual data entry, improving accuracy in warehouse management.
Businesses can save on the cost of purchasing, maintaining and upgrading fixed computers when using mobile devices.

Application:

Mobile devices are used to scan product barcodes, helping to quickly determine the location, quantity and product information.
Employees can update inventory quantities directly on mobile devices, ensuring that data is always updated accurately.
Employees can check and confirm orders directly on mobile devices, helping to shorten order processing time.
Mobile devices help track and manage product locations in the warehouse, ensuring that products are always stored in the right place.
Employees can use messaging, phone calls or video conferencing applications to communicate and coordinate work more effectively.

How much does it cost to deploy a smart warehouse?

Deploying an automated warehouse system (also known as a smart warehouse) brings many benefits to businesses, helping to improve operational efficiency, reduce costs and enhance competitive advantage. However, the investment cost for this system is a matter of concern for many businesses.

The cost of deploying a smart warehouse depends on many factors:

The more complex the automation system, the larger the scale, the higher the cost.
Does the business want to automate the entire process or just certain parts? A high level of automation will lead to higher costs.
Businesses with large operating scales and storing a lot of goods will have higher costs than small businesses.

Estimated cost of implementing smart warehouse:

Basic solution: 200 - 300 billion VND
Advanced solution: 300 - 500 billion VND
Comprehensive solution: Over 500 billion VND

Outstanding advantages of smart warehouses

Technology is getting smarter every day so that we can do things faster and more efficiently with minimal hassle. This is why the idea of Smart Warehouses is a fast-emerging necessity. Here are the advantages of its implementation:

1 - Better Warehouse Optimization

Incorporating smart solutions can improve warehouse efficiency and optimize the workflow of various fulfillment operations. Advanced analytics driven by algorithms help warehouse operators manage inventory flows, optimize storage, and reduce process bottlenecks. A data-driven approach not only helps in recording key metrics but also enables the warehouse to have streamlined operations and thus, provide better customer service.

Such advanced technologies also have the ability to detect potential problems and risks in the supply chain early. The advantage of having data on inventory and supplier risks allows warehouse managers to be proactive rather than reactive.

2 - Lower operating costs

One of the biggest benefits of smart warehouses is that not all tasks require constant human intervention. The combination of robots, drones, and autonomous vehicles can make fulfillment partially or fully automated.

3 - Faster picking and shipping

Smart warehouses also help speed up order fulfillment times. In a non-automated warehouse, employees spend most of their day moving around and looking for different products. This is not only time-consuming but also prone to errors. Smart picking devices such as light scanners, smart glasses, and picking robots can significantly reduce the time it takes to find, verify, and pick an item from a storage bin.

Similarly, adding parcel sortation and conveyor systems to the shipping process can eliminate lost and mislabeled packages. As a result, faster picking and error-free shipping can reduce order fulfillment times. Faster fulfillment cycles provide a competitive advantage.

4 - Greater Accuracy in Warehouse Operations

A typical warehouse operation includes a number of error-prone processes and steps. These errors can cause significant losses to the entire business if not identified and resolved in a timely manner. One of the top benefits of smart warehouses is greater accuracy at every step of the order fulfillment cycle. It also helps reduce the number of items that are lost, damaged, or expired due to improper inventory management.

5 - Better Customer Service

Every product in the warehouse eventually reaches the consumer. Of course, it is important to focus on customer service, experience, and satisfaction. With smart warehousing, companies can improve the way they interact with customers, respond to their changing needs, provide support, and improve the overall experience. With faster shipping, reduced costs, and prompt responses, businesses can build a satisfied customer base. This will also lead to better customer experience and customer satisfaction.

6 - Better Asset and Inventory Tracking

Effective inventory tracking is one of the biggest concerns for most warehouses. Knowing where a particular product is in the supply chain can help you better understand processed orders, improve supply chain planning, and estimate when the next batch of product might be needed to prevent stockouts. So in a modern warehouse, RFID tags, barcodes, embedded sensors, and other latest technologies provide excellent visibility into product movement and inventory status.

Disadvantages of Smart Warehouses to Watch Out For

Although implementing a smart warehouse brings many benefits to businesses, there are still limitations when implementing this system. Here are the disadvantages:

1 - Capital Investment

Automated technology is a large capital investment. Business owners may hesitate to purchase a new system. When it comes to long-term purchases, automated warehouse systems certainly show benefits. However, the short-term ROI is unclear.

Along with the investment in machinery and technology, training employees to operate them properly is also time-consuming and challenging. And the system itself must be programmed to operate effectively in a specific warehouse space.

In addition to initial installation and implementation, the system requires maintenance. If the system breaks down, a professional usually has to complete the repair. Downtime can also be costly. These investments cancel out some of the savings from reducing staff and optimizing processes.

2 - Lack of Adaptability

Warehouse automation is the practice of automating, replacing simple, repeatable, time-consuming tasks. In a warehouse, changes to inventory or layout will require reprogramming the system. In a warehouse with consistent products and layouts, adaptability is not a concern.

3 - Workforce Considerations

The first major workforce consideration concerns unemployment. With a warehouse, the use of automated machinery will inevitably reduce the number of jobs available for humans in the warehousing industry.

Smart warehouse vs traditional warehouse: Detailed comparison

In recent years, the deployment of automated warehouse systems (smart warehouses) has become increasingly popular, bringing many outstanding benefits compared to traditional warehouses. However, in addition to the advantages, smart warehouses also come with some concerns about investment costs, complexity in management and the ability to cut labor.

So, what is the difference between smart warehouses and traditional warehouses?

1. Operational process:

Traditional warehouse: Employees move in the warehouse with packing slips, manually performing tasks such as: picking products, transporting, checking quality, packing and delivering.

Smart warehouse: Most tasks in the warehouse are automated by smart systems, robots, machines and software. Employees only monitor and control the system, minimizing direct participation in manual activities.

2. Level of automation:

Traditional warehouse: Low level of automation, mainly using supporting equipment such as forklifts, elevators, etc. operated by humans.

Smart warehouse: High level of automation, applying advanced automation solutions such as picking robots, automated transport systems (AGV), goods classification systems, etc.

3. Operational efficiency:

Traditional warehouse: Operational efficiency depends on human productivity and accuracy, prone to errors due to human factors.
Smart warehouse: Improve operational efficiency through automation, minimize errors, increase order processing speed and optimize processes.

4. Operating costs:

Traditional warehouse: High labor costs due to the use of many workers.
Smart warehouse: High initial investment costs but save labor costs in the long term.

5. Management capabilities:

Traditional warehouse: Management based on manual books and reports, difficult to track and monitor warehouse operations.
Smart warehouse: Smart warehouse management system (WMS) helps to comprehensively track and monitor warehouse operations, provide detailed data and reports, support effective decision making.

6. Benefits:

Traditional warehouse: Low investment cost, easy to deploy and operate.
Smart warehouse: Improve operational efficiency, reduce operating costs, enhance inventory control, improve customer service and enhance competitiveness.

Smart Warehouse or Traditional Warehouse - Which to Choose?

For businesses considering upgrading their logistics systems, choosing between smart warehouses and traditional warehouses can be confusing. However, instead of having to make a rigid choice, businesses can completely combine the advantages of both models to optimize operational efficiency.

Businesses do not necessarily have to invest entirely in smart warehouses or completely limit themselves to traditional systems. Instead, applying a step-by-step, piecemeal automation strategy can be highly effective.

Specifically, businesses can:

Invest in individual automation solutions: For example, automatic elevators help support the transportation of heavy goods, reducing the burden on workers, without having to change the entire organizational structure of work in the warehouse.
Deploy Autonomous Mobile Robots (AMRs): AMRs can automatically transport goods between designated areas in the warehouse, helping to optimize processes and save time.

The benefits of this flexible choice:

Help businesses gradually approach automation, in accordance with financial capacity and actual needs.
Take advantage of the benefits of automation while minimizing risks and initial investment costs.
An effective stepping stone for businesses to deploy a complete smart warehouse system in the future.

Guide to setting up an effective smart warehouse

To set up effectively, you need to consider many factors, here is a step-by-step guide:

Step 1: Assess current operations

Before converting to a smart warehouse, a business must thoroughly examine its current operations. It is important for decision makers to understand workflows, identify inefficiencies, and identify areas that could benefit from automation or smart technology. This step also involves collecting and analyzing key warehouse data, such as inventory flows, retrieval processes, and labor costs.

Step 2: Define Your Goals

Once you understand your current operations, define what you want to achieve with your smart warehouse. This could be improving customer service, increasing inventory accuracy, or reducing overall costs. Clear goals will guide your technology and strategy choices, ensuring that your warehouse aligns with your business goals.

Step 3: Choose the Right Technology

The next step involves choosing smart technologies to help you achieve your goals. This could be anything from automated guided vehicles for material handling to warehouse management systems for better inventory control or IoT devices for real-time tracking and data visualization. When choosing a technology, consider its compatibility with your existing systems, ease of use, scalability, and potential return on investment.

Step 4: Implementation

Once you have selected the right technology, the next step involves implementing it in your warehouse. This could include retrofitting your warehouse space to accommodate new equipment, integrating new software with existing systems, or installing IoT devices. Remember, implementing new technology is a significant change, so it is important to plan carefully to minimize disruption to your operations.

Step 5: Training and Support

Implementing new technologies is only half the battle – ensuring your staff can use and manage these systems effectively is equally important. Invest in professional training to help your team understand how to operate new equipment, use new software, and follow updated procedures. Additionally, make sure you have access to ongoing technical support to address any issues that may arise with your new system.

Step 6: Review and Optimize

Finally, once your smart warehouse is up and running, take the time to regularly evaluate its performance. Use the data collected by your smart systems to gain insight into your operations, identify areas for further improvement, and make necessary adjustments. This ongoing review and optimization process is critical to ensuring your warehouse remains efficient in the long run.

A Specific Example of a Smart Warehouse

Different industries are leveraging the power of smart warehousing, including retail, manufacturing, e-commerce, and logistics. For example, Amazon uses Kiva robots in its fulfillment centers to move goods efficiently.

DHL uses IoT technology and data analytics in its smart warehouses to better manage and forecast inventory. On the other hand, Alibaba’s Cainiao Smart Logistics Network uses AI and autonomous guided vehicles to optimize its warehouse operations. These real-world examples highlight the growing adoption and success of smart warehousing in various sectors.

Embracing the Future with Smart Warehouses

Warehousing has come a long way in the past few decades. Today, smart warehouses involve computers and new technologies that perform many of the warehousing activities that humans once did. Leveraging advanced technologies such as IoT, AI, RFID, and automated systems, warehouses are changing the way businesses manage inventory, streamline operations, and meet customer demands. While the transformation can present challenges, from retrofitting existing facilities to securing massive amounts of data, the potential benefits of improved accuracy, efficiency, cost reduction and improved customer service can far outweigh the initial hurdles.

The key to a successful transformation lies in understanding your current operations, defining clear goals, selecting the right technology and investing in employee training and support. With thoughtful planning and implementation, your business can harness the power of smart warehousing to stay competitive in today’s fast-paced, customer-centric marketplace. As you embark on this journey, continually review and optimize your systems for best results. Increasing automation in managing orders and deliveries, using a warehouse management system or analytics can have a positive impact on the operations of logistics businesses.

Intech Group - Expert in smart warehouse solutions

Intech Group is proud to be a reputable provider of comprehensive smart warehouse solutions, helping businesses optimize warehouse management processes, improve operational efficiency and increase profits. With a team of experienced engineers with in-depth knowledge of automation technology and IoT, Intech Group is committed to providing customers with optimal solutions, suitable for the specific needs and budgets of each business.

Here are some typical warehouse solutions of Intech Group:

Smart warehouse management system (WMS): Automate warehouse management processes from A to Z, including warehousing, warehouse export, inventory, goods allocation, ... to optimize operational efficiency and minimize errors. Provide detailed information on the status of goods in real time, helping businesses easily track and manage warehouses.
Automated guided vehicle (AGV) system: Automatically move goods in the warehouse, reduce manual labor, improve productivity and work safety. There are many different types of robots to suit the diverse needs of businesses such as AGV towing goods, AGV lifting, etc. Integrating advanced guidance systems such as lasers, cameras, RFID for safe and efficient movement. Automated forklift system (AS/RS): Automatically store and retrieve goods in high-rise warehouses, optimize warehouse space and minimize operating costs. Combined with the system (WMS) to control and manage forklifts effectively.
Automatic conveyor system: Helps automate the transportation of goods, thereby improving operational efficiency, optimizing costs and increasing profits for businesses. The system includes types of conveyors controlled by electric motors, moving goods from one place to another automatically without human intervention.

With advanced warehouse solutions and professional services, Intech Group is committed to helping businesses improve operational efficiency, optimize costs and increase profits. Contact Intech Group today for advice on modern warehouse solutions.

Contact information:

Hotline: 0983 11 33 87 - 0966 966 032
Email: info@intech-group.vn

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Những câu hỏi thường gặp

What is a smart warehouse? Advantages and disadvantages of smart warehouse compared to traditional warehouse

Many different technologies can be involved in smart warehouses, such as artificial intelligence and robotics. By using these technologies, smart warehouses can improve fulfillment accuracy, restock products faster, fulfill orders more efficiently, and increase productivity.