Laying the Groundwork for IoT Innovation in the Warehouse

Robert Brice
Mon, May 1, 2017
Organizations that hope to leverage IoT systems in the warehouse need to lay the groundwork through data-focused innovation.
Organizations that hope to leverage IoT systems in the warehouse need to lay the groundwork through data-focused innovation.

The Internet of Things began gaining momentum on a project-by-project basis, with many organizations beginning to use the technology in areas that would allow for fairly easy, controllable deployments. While plenty of businesses are still in this early adopter phase for the IoT, the sector has evolved to the point where a wider range of use cases are in place, and IoT penetration is on the rise. This is especially evident in warehouse settings, where connected devices of various sorts have long been in use to handle complex inventory and asset management tasks.

Because of this, warehouse leaders have an opportunity to take the foundation for technology use that is already in place and build on it as the IoT gains momentum. For example, most warehouses use some form of serialization to track and monitor assets as they move through facilities. While barcode scanners and similar automated data collection tools are established to allow for natural data communication with warehouse management solutions, the IoT offers the potential to take this functionality to another level. A few possibilities here include the following:

  • Using connected scales to weigh assets on the shelf and provide an extra check against recorded inventory levels.
  • Tracking environmental conditions while packages are in transit to ensure regulatory laws for asset disposition are followed at all times.
  • Deploying telematics to gain greater visibility into fleet activities.
  • Leveraging drones to find and verify items based on their barcodes.

When combined, these capabilities add up to take the initial benefits of serialization - a practice that allows for simplified tracking of items and shipments - and brings them to new heights by providing an even greater degree of transparency. The IoT is making this possible, something that is fueling rapid growth in the sector.

The IoT on the Rise
Businesses are implementing IoT technologies at a breakneck pace as they work to bring connected device technology to bear as a way to improve data transparency and visibility. Grand View Research found that the global IoT for warehouse management market will expand quickly over the next few years, with annual revenues in the sector climbing to $19.06 billion by 2025. In 2015, the industry was valued at $2.27 billion. As organizations move to take advantage of what the IoT has to offer, they are doing so as part of a large-scale technological revolution in the sector.

According to the study, a variety of warehouse technology markets are gaining momentum alongside the IoT. Warehouse leaders are expected to put resources into inventory management, RFID systems, automatic identification and data capture tools, pallet/item level tagging and electronic data interchange functionality in the coming years. These developments are emerging as organizations build toward increased use of goods-to-person technologies and telematics solutions.

All things considered, the warehouse sector is caught up in the fourth technological revolution, and it is time for businesses to prepare for change regardless of how ready they are to dive into the IoT waters.

Data Sets Foundation for IoT Success
The IoT creates value for organizations based, to a great extent, on its ability to quickly distribute data across the organization and make that information actionable for a wide variety of users. With this in mind, it should come as no surprise that, according to a Forbes report, a Dresner study identified organizations that already have mature business intelligence programs in place are among the companies leading the way toward IoT innovation. The reason is simple enough: Those organizations have already laid the groundwork for gleaning value from IoT data.

BI programs involve collecting information from different parts of the business, analyzing that data and delivering key performance metrics and similar analytics to users in actionable ways. In practice, BI is designed to offer businesses an added layer of intelligence by giving users accurate, up-to-date information that falls in line with the decisions they are making and processes they are completing on a day-to-day basis.

What does this all mean for the warehouse? Whether or not your organization is diving into BI, the relationship between BI and the IoT shows that organizations hoping to get value from IoT investments must develop strategies to use the data generated by sensors and monitoring devices.

Establishing a Data Foundation for the IoT
Many warehouses already have a wide range of data collection and distribution systems in place. As we mentioned when discussing serialization, specialized warehouse tools are already allowing organizations to establish a basis for gathering data efficiently. There are, however, a few key problems that must be addressed:

Siloed technologiesMost warehouse-specific technologies keep data siloed in warehouse management systems. For example, many inventory tracking systems don't communicate with enterprise resource planning or finance applications. This means that when an asset's stock level falls below reorder levels, the warehouse management platform will send an alert to the relevant manager. However, that individual then needs to go into the financial system to notify stakeholders of the impending purchase and check the budget. From there, the individual must move into the ERP to complete the order with a purchasing module that provides visibility into vendor performance.

If data and operations remain siloed in disparate systems, managers will inherently be less efficient because they need to move in and out of various apps and interfaces to get the job done. Furthermore, the likelihood of errors rises as users re-enter data across systems. Warehouse leaders who want to take full advantage of the IoT can build a solid foundation for innovation by integrating their warehouse management and ERP systems. When the two platforms can share data automatically - and potentially even send batches of data out to financial apps - managers can more easily translate data gathered by IoT systems into operational efficiency.

Device limitations: Smartphones and tablets have had a somewhat slow adoption curve in the warehouse sector, and for good reasons. Many organizations have already invested in dedicated barcode scanners and similar solutions that support end-user requirements. The potential safety risks of allowing workers to use personal devices on the warehouse floor can create hazards. Countering these problems is possible with mobile device management and similar tools, and warehouses are increasingly on getting on board with the mobile revolution.

If you want to start moving forward on the IoT curve, it may be time to start migrating to mobile warehouse management and ERP apps. This doesn't mean you have to replace your barcode scanners and similar systems, but allowing users to jump right from handling an asset to using an app to analyzing data can fuel efficiency gains. Furthermore, the alerts, automated processing and similar functions built into IoT frameworks are easier to turn into value when users can work quickly and efficiently. Extending apps and services out to mobile devices doesn't just create new functionality, it also extends those capabilities to individuals working across a variety of locations.

Every warehouse is unique, and each business will need to establish its own path to the IoT relative to its existing technological investments and budget limitations. However, the growing role that data plays in IoT environments can't be underestimated. Organizations that are unable to move data between user groups and connect disparate business teams through common app environments can easily find themselves struggling to glean value from their IoT investments.

Conversely, organizations that are able to move data between teams before even dipping their toes into the IoT will have a foundation in place to prevent the new technology from becoming overwhelming or difficult to imagine. Think of the data in your organization as automobiles. The IoT increases the number of cars moving around and the speed they can travel at. This is only valuable if there are enough roads available for those cars to get where they need to go. Neglecting to integrate warehouse management systems and ERP platforms is like ignoring a road upgrade before completing new construction. Ignoring mobile apps and services is like building an apartment complex in the middle of nowhere. Keeping the IoT siloed isn't a viable option in the warehouse, and strategic investments now lay the groundwork for sustainable innovation.

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