Is A Smart Warehouse The Intelligent Choice?

Is a smart warehouse an intelligent choice? In this post, we’ll take a deeper dive to understand in more detail what smart warehouses are, how they work, and what technologies comprise them. So, let’s get to it.

What Is a Smart Warehouse?

A smart warehouse is an extension of a smart factory, which is a production or manufacturing facility that incorporates high levels of automation. In short, a smart warehouse uses a range of automated material handling technologies to improve the efficiency and productivity of a warehouse, distribution center, or fulfillment center.

These types of technologies take many forms. They can be software or hardware, but more often than not they’re a combination of both. For example, we could be talking about a warehouse management system (WMS), automated storage and retrieval system (AS-RS), a goods-to-person (GTP) system, a pick-to-light (PTL) system, etc.


Intralogistics refers to the management and optimization of internal production, logistics, and distribution processes. This may include information and material flow as it deals with how to efficiently handle warehouse operations. Specifically, intralogistics focuses on material handling and how to integrate it with modern technologies.

The concept of intralogistics applies to the internal processes within the walls of a warehouse, distribution center, or fulfillment center. Its objective is to improve efficiency and productivity while minimizing inventory holding costs. Goods can be received, put away, picked, packed, and shipped much faster than in traditional warehouses. It also improves safety in the work environment. Integrating these types of tools and technologies in the supply chain helps to enhance flexibility.

Smart Warehouse Technologies

Let’s take a closer look at some smart warehouse technologies.

Internet of Things (IoT)

The Internet of Things (IoT) is more of an overarching concept than an individual technology. IoT can control a wide range of moving parts, both automated and manual, and it can optimize many processes. By using IoT, your organization can automatically collect data that helps to optimize your warehouse’s inventory control procedures. This data can also help with labor planning, which can improve overall customer service levels, enabling you to ship goods much faster.

RFID Technology in IoT

RFID tags can store much more data than standard barcodes. More data means more information, which enables better decision-making. An RFID reader has a much faster read rate, and it can scan multiple tags at once. In fact, an RFID reader can scan hundreds of tags at a time.

IoT Integrated Management Systems

Integrated management systems can gather inventory data automatically using a range of connected sensors, RFID tags, or QR codes. These systems automatically collect, store, or display information to a warehouse operator in real time with a dashboard. For example, one great use case for this is the increasing use of drones in a warehouse that can collect warehouse inventory data automatically and, in some cases, autonomously.

We’re seeing the increasing use of drones in facilities that can count inventory and pass the collected data in real time to a warehouse operator or database. To be sure, inventory management, visibility, and control require far fewer human resources. Thus, they become dramatically faster.

Furthermore, warehouse operators now have multiple technology options like wearable devices, the use of voice picking, AR glasses or RF guns, wrist-mounted devices, or ring scanners to improve efficiency, productivity, and picking accuracy. These types of tools also take physical documentation (e.g., printed picking slips) out of the equation. Going paperless means you no longer need these documents.


Sensors track inventory from the time a facility receives it to the time it dispatches the goods. These sensors can also track goods on the move and monitor motion, temperature, and humidity. Sensors using GPS can track trucks and drivers in real time. Sensors can alert operators at the delivery point to let them know what is arriving and when. You can electronically upload and store digital proofs of delivery (POD) in real time to the point of dispatch (warehouse, distribution center, or fulfillment center).

Automated Picking Tools

Automated picking tools can take many forms. Some of the most common are goods-to-person (GTP) and pick-to-light (PTL) systems. Traditionally, warehouse operators go and find the goods; however, in a GTP system a picking tool brings the goods to the warehouse operator. PTL systems direct warehouse operators to the pick location in high-density racking and advise the operators of the quantity they should pick. Additionally, you can integrate these types of picking tools into warehouse management systems.

Automatic Guided Vehicles (AGVs)

An automatic guided vehicle system (AGVs) consists of one or more computer-controlled, wheel-based load carriers (normally battery powered) that run on the plant or warehouse floor (or, if outdoors, on a paved area) without the need for an onboard operator or driver.

An AGV is a mobile robot that follows markers or wires within the floor or uses vision or lasers. In industrial applications, they typically move materials around a manufacturing facility or warehouse.

Automated Guided Carts (AGCs)

An automatic guided cart (AGC) is the most basic type of AGV with minimal features. Navigation systems can range from systems as simple as magnetic tape to complex, sensor-based navigation systems that use AI to navigate their environment. AGCs can transport a variety of materials, from small parts to loaded pallets, and are often used in sorting, storage, and cross-docking applications.

Forklift AGVs

Forktrucks or forklifts are now available in AGV form. These are becoming an increasingly popular type of AGV. By design, they perform the same functions a human-operated forklift—basically transporting loads of various types (e.g., pallets)—but without the need for a human operator. In some cases, a human operator remotely controls these types of material handling equipment.

Towing AGVs

Towing vehicles, or tugger AGVs, pull one or more non-powered, load-carrying trailers behind them in a train-like formation. They’re sometimes called driverless trains. Tugger AGVs are often used for transporting heavy loads over longer distances. They may have several dropoff and pickup stops along a defined path through a warehouse or factory.

Unit Load Handlers

Unit load handlers carry discrete loads such as individual objects or a single unit such as a pallet or tote that contains multiple items.

Heavy Burden Carriers

For heavier loads, heavy burden carriers are another type of specialized AGV used in applications such as large assembly, casting, coil, and plate transport. Some heavy burden carriers have self-loading capabilities and may have a standard pivot, or omnidirectional steering.

Autonomous Mobile Robots (AMRs)

Autonomous mobile robots (AMRs) are typically more technologically advanced than other types of AGVs. While many AGVs use fixed navigation systems, such as wires or magnetic tape, many AMRs have intelligent navigation capabilities such as sensors and camera systems. These systems enable them to detect and navigate around obstacles. AMRs can dynamically navigate a warehouse or other facility and plan the most efficient routes themselves from point A to B.

Automated Inventory Control Platforms

Automated inventory management is a tool that automates the inventory control process to varying degrees. These types of systems assist businesses to streamline multiple back-end inventory control processes, including

  • – counting stock,
  • – fulfilling orders,
  • – generating purchase orders, and
  • – generating shipping documentation.

The capabilities of an automated inventory management system range from quite basic to extremely sophisticated.

These systems tend to be integrated into existing business systems. They can analyze data and identify sales patterns, make inventory and demand forecasts, and perform inventory checks that trigger purchasing processes if inventory is low.

Furthermore, some of the more advanced systems can generate purchase orders. Users can preset minimum “safety stock” thresholds for items. Once the threshold is reached, the system can automatically send a purchase order of the required predefined order quantity to a preferred supplier.

These types of systems can be put into four broad categories:

  • – raw materials used for part of the production or the manufacturing process
  • – finished goods that can be picked, packed, and dispatched to a customer, store, or end user
  • – for maintenance, repair, and operating (MRO) supply purposes
  • – subassemblies or kits that are can be premade ready for the next stage of the manufacturing process or final assembly

Warehouse Management Systems (WMS)

The general purpose of just about all WMSs is to help an organization manage and control the day-to-day operations of a warehouse, distribution center, or fulfillment center: receiving, put away, inventory management, picking, packing, shipping, etc. These systems vary in functionality, capability, and sophistication. Additionally, many can carry out ancillary functions like labor management, workload balancing, metrics and KPI tracking, and more.

These systems can be standalone, on-premises, or SaaS cloud-based. Furthermore, they can be end to end or modularized, allowing an organization to select only specific functional modules they need. You can configure and customize a WMS in an infinite number of ways, including integrating it into RF devices for scanning. They can also use voice-picking technology. By design, most of these systems support paperless processes.

You can use a WMS for a range of purposes, such as

  • – multichannel fulfillment capability;
  • – inventory control, management, and visibility;
  • – warehouse operator workforce management; and
  • – data collection, analytics, metrics and KPI tracking, and dashboards.

They provide automation capability by connecting through a series of APIs that streamline communications between themselves and other associated systems such as GTPs, automated storage and retrieval systems (AS-RSs), transport management systems (TMSs), procurement (P2P) platforms, ERP, and a host of other back-end systems. You can configure and integrate these systems in many ways.

WMSs are the core of a smart warehouse and the driver of other interrelated warehouse automated material handling technologies.

At the end of the day, all WMSs have these common goals: reduce costs, improve efficiency, automate processes, and increase productivity while improving customer service capability.

Automated Storage and Retrieval Systems (AS-RSs)

An AS-RS is a combination of equipment that controls and handles the storage and retrieval of goods. These systems have varying degrees of automation and range in size from quite small to very large. They’re also often integrated with other systems, the most common being a WMS. You can use these systems for several purposes:

  • – order picking: retrieving and bringing goods to warehouse operators and returning them to storage after picking
  • – interim storage: providing high-density storage space for medium to slow-moving products (e.g., SKU velocity)
  • – kitting: holding and presenting various parts of a kit for assembly
  • – consolidation: holding partial orders, such as those that are incomplete and can be merged at a later time to assemble the whole order before being shipped or dispatched (consumer, B2B, or retail store orders)
  • – assembly: storing components or subassemblies that you can later use as part of the manufacturing process
  • – replenishment: storing excess inventory that you can use for restocking purposes to ancillary picking systems (e.g., PTLs)

This is by no means a complete list. You can implement AS-RSs in many ways, and they fall into several categories:

  • – unit-load AS-RSs, which handle larger heavier loads such as pallets
  • – mini-load AS-RSs, which handle smaller loads
  • – vertical lift modules (VLMs), which present parts or small goods to the operator for picking from rows of trays or smaller bins
  • – shuttles, which automatically handle totes, trays, cartons, or all three
  • – horizontal carousels, which rotate vertically and usually retrieve smaller items in a series of shelves or trays
  • – cube-based storage, an ultra high-density GTP piece picking system that uses robotic systems to store and retrieve SKUs from a cubical storage grid

Collaborative Robots (Cobots)

Ranging from quite basic to extremely sophisticated, collaborative robots, or cobots, are designed to work alongside operators in a production line or a warehouse. Their design ensures that the operator can safely interact near them.

Although cobotics have a strong presence in sectors requiring robust manufacturing processes, such as the automotive industry, it’s becoming an increasingly common solution in all types of businesses. Warehouses employ collaborative robots  particularly in operations that require fairly heavy load movements that can be too heavy for workers to handle comfortably and without strain.

Instead of replacing operators, these machines complement and assist employees in their day-to-day tasks. Collaborative robots perform actions such as order packaging and the picking, placement, and stacking of heavy items.

One of the best examples of cobotics in logistics is the robotic arms on pick stations. These robotic arms make order picking more efficient and faster. Another is cobots, which complement the operator when palletizing or packaging a product. Some robots can work autonomously to load or unload cartons onto or off pallets of conveyor systems

By 2025, over 4 million commercial robots will be installed in over 50,000 warehouses, up from just under 4,000 robotic warehouses in 2018, according to ABI Research, a market foresight advisory firm.

As same-day delivery becomes the norm, the need for flexible, efficient, and automated e-commerce fulfillment will drive the rapid rate of adoption of warehouse robotics. The increasing affordability and ROI of a growing variety of infrastructure-light robots will also spur adoption as they become an attractive and versatile alternative to traditional fixed mechanical automation or manual operations.

Some experts in this field are expecting somewhere between 20% and 30% growth annually for the foreseeable future.

Smart Warehousing, the Intelligent Choice?

I believe it’s abundantly evident that smart warehouses are just a precursor to fully automated supply chains. Where this will end is anyone’s guess. We now have a small number of fully automated warehouses. The only human presence required is those that oversee the robots or who service and maintain them. One thing is for sure: it’s no longer in the realm of science fiction, it’s here and it’s happening now—Industry 5.0 here we come.

This post was written by Mark Vernall. Mark is a supply chain specialist with over thirty years of experience in the field, working across many industries as a consultant, advisor, and project manager. Mark has a high level of expertise in business process re-engineering, change management, and the selection and implementation of advanced supply chain systems. He is also the Senior Responsible Officer and Founder of Supply Chain Specialists 4 Hire

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