Thanks to the rise of e-commerce with its burgeoning consumer demand, warehousing is big business—about EUR 300 billion of big business. You only need to look to retail giant Target, e-tailers like Amazon and JD.com, and global logistics company DHL to understand that investing in warehouse automation and digitalization enhances the customer experience, boosts efficiency and lift profits. These companies are not alone. To stay competitive, retailers, e-tailers, logistics and fulfillment service providers, large and small, are looking to digital technologies and connectivity to make warehouse operations far more efficient and agile than they are today.
Reducing labor costs
When you consider that labor is the single largest cost of total warehouse operating costs, it makes sense to automate and digitize operations. The competition for the limited pool of warehouse workers is fierce. Recruitment and retention are huge issues for warehouse managers. Wages have gone up while productivity has gone down.
Time for warehousing to enter the era of Industry 4.0.
You don’t need to be a rocket scientist to figure out that the rising labor costs and the declining costs of mobile robots hold tremendous possibilities. Introducing advanced automation technologies can reduce warehouse operating costs by an estimated EUR 20 billion.
So what’s holding the warehousing industry back? For players without deep pockets like the major warehousing giants, it’s a question of making sound automation and technology investments to upgrade processes, increase efficiency and productivity, and realize fast payback.
Improving warehouse productivity
As the manufacturing industry gets smarter, it stands to reason that warehouses—large and small—must follow suit. Rethinking manual warehouse operations and fixed mechanical automation is high on the agenda. But using legacy equipment and inadequate connectivity isn’t the way forward. Thanks to more affordable mobile robotics and innovative wireless connectivity, it’s now possible to make investments in autonomous forklifts, automated guided vehicles (AGVs), autonomous mobile robots (AMRs), drones and other mobile devices—and in 4G LTE and 5G connectivity to make them work for you.
What you get is a smart warehouse with higher labor productivity—and profitability to match. Take AGVs, for instance. Warehouses are adopting AGVs for their accuracy, speed and cost. Over the next five years, the compound annual growth rate for the AGV market is projected to be nearly 20%, a testament to the cost savings and efficiency gains expected across a broad range of industries.
With AGVs, picking, packing and shipping become safer and more efficient, process visibility greater and more transparent, and data more available for analysis and warehouse optimization. Plus hundreds or thousands of AGVs can operate alongside other smart devices across major warehouse floors. Powered by 4G LTE and 5G, they are more agile, work faster and get real-time updates thanks to reliable low latency connectivity. Where other short-range wireless technologies based on unlicensed spectrum falter, 4G LTE and 5G not only provide seamless continuous coverage in real time, they also let you assign priority to the machines and devices that are most critical.
Is IIoT costing jobs or creating new ones?
Concerns about Industry 4.0 job loss loom large in the minds of many. Are robots taking away jobs from people? Yes, they are but these are the physically taxing jobs that typically experience high worker turnover. Are robots better at doing these jobs? Yes, they’re tireless and much more accurate handling these monotonous, repetitive tasks like reading bar codes and picking, packing and transporting products from one point to another. Sure, automation and digitalization can increase productivity while creating greater value and requiring fewer people on the job.
However, if history repeats itself (as it often does), then workforce disruption leads to reskilling and upskilling. After all, warehousing is still a people business. Consumers are demanding products. Manufacturers are making them, albeit more customized. And alongside the automated workforce, people at warehouses, fulfillment and distribution centers and third-party logistics hubs are needed to bridge the gap between supply and demand.
Striking the right balance between robots and people is key. With advanced automation and better connectivity, warehouse managers can effectively do away with the panic that sets in while trying to recruit seasonal workers. Peak shopping time like ‘Singles Day’ or the yearend holiday season means gearing up to ship millions of packages to far-flung customers. Mobile robots can ease the pain and uncertainty. And the result is better for warehouse operations, for those who work there – and ultimately for the consumer.
Why warehouses need wireless cellular solutions
Boosting warehouse efficiency isn’t possible without reliable, secure real-time connectivity. However, many warehouses still rely on hardwired systems and various short-range wireless technologies based on unlicensed spectrum, making them prone to interference, security issues and performance that degrades as more devices are added to the network. These shortcomings limit productivity gains in a big way.
Let high-performance wireless lift your warehouse operations into the digital era. By doing so, you effectively do away with process and technology fragmentation that has been slowing down your warehouse operations. While 5G provides a big boost in flexibility, intelligence, speed, bandwidth and security, there’s no need to wait. Using 4G LTE allows you to start your digital transformation journey now and quickly transition to 5G as soon as it’s available where you are.
Wherever your warehouse IoT journey takes you, we’re here to help. Our dedicated cellular communication solutions for industries make the transition to the smart warehouse easy. Connectivity is the foundation for greater efficiency, productivity, agility and visibility of all your assets, people and processes. Smart investments in fast, reliable and secure warehouse connectivity will, no doubt, carry you far into the future.
Check out Ericsson Industry Connect solution to learn how to boost warehouse efficiency and productivity. Or join our community to stay abreast of the latest news.
