IoT in Warehouse Management: A Positive New Shift in Inventory Management (2021)

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
warehouse-drone

IoT (Internet of Things) is often discussed concerning things like warehouse management. But, for those unfamiliar with the intricacies of logistics, what does this actually mean?

In this article, we’ll lay out some examples of how IoT in warehouse management works. To do this, we’ll look at terms such as smart warehouse and warehouse automation.

Hopefully, by the end, you’ll have enough information to get started on your own smart warehouse!

What is IoT?

We’ve discussed IoT technology multiple times before, but it’s worth covering a quick definition here. So, what is IoT technology?

The Internet of Things (IoT) refers to a network of connected devices. As the name implies, they’re connected over the internet. This allows various devices to communicate and share data to improve processes and generally make our lives easier.

In practical terms, this translates to things such as:

  • Tracking devices
  • Activity sensors
  • Smart home devices (voice assistants, smart appliances, etc.)

2019 estimations on IoT spending predict it’ll pass the $1 trillion mark by 2023! The sheer level of intended consumption should tell you how popular and revolutionary this technology is.

What Happens in a Warehouse?

Again, this might not be something that needs defining as every warehouse is different. Even so, general warehouse activity can be boiled down into a few general categories:

  1. Receiving
  2. Storage
  3. Put away
  4. Picking
  5. Packing
  6. Shipping

What product the warehouse handles is irrelevant to this definition. In some form or another, pretty much every warehouse process fits into one or more of these categories.

It’s unnecessary to go into much more depth than this to explain IoT in warehouse management. The important thing to know is that assets must be tracked to ensure efficiency, and that warehouse managers are always looking for ways to improve productivity and reduce cost.

Regardless of what a warehouse ships, packs, or processes, the basic rules of warehouse management boil down to the same things.

IoT in Warehouse Management: Technology Trends

As IoT technology can be defined as any internet-connected device, this is quite a broad subject to approach. But, there are noticeable trends in warehouse management that use IoT technology.

In one way or another, the following devices make use of internet connectivity to improve productivity.

1. Drones

Drones are everywhere now. The sale of consumer drones broke the $1.25 billion mark in 2020. As you’d expect, they’re breaking into various markets, such as agriculture, real estate, and warehouse management.

IOT in warehouse Management  in action
A drone monitoring stock in a warehouse

Drones are one of the easier IoT devices to explain in relation to warehouses. They pick products, move them around, and monitor stock. Fitting a drone with a barcode scanner makes inventory management a breeze and saves people climbing up tall ladders.

What’s more, it’s even possible to completely automate a drone using machine learning and lidar. But, for safety reasons, most are still operated remotely by a pilot.

2. Blockchain Technology

Blockchain technology is one of those mystery terms that most have heard of but few can describe in detail.

In short, a blockchain is a list of information – invoices, signatures, anything you want. Each piece of information is a block and when strung together, form a chain. Hence, blockchain.

The main benefit of blockchain technology is that a copy of each piece of information is stored on every device in the network. This means that it’s essentially tamper-proof.

How does this help with warehouse management? Simply put, it reduces the chance of theft and lost inventory. Data can be accessed remotely and is always correct and up-to-date.

It improves decision-making too. Warehouse managers can forecast sales and demand using blockchain data due to it being correct and accessible.

3. Autonomous Vehicles

Autonomous vehicles aren’t a new concept in warehouse management. Amazon, for example, has been using robots for years.

Image showing robots in warehouse management
Autonomous vehicles working in a warehouse

As with all other automated processes, robots are meant to speed up repetitive jobs to free up human workers for more complicated tasks. In a warehouse, this means moving stock and calculating routes to shelves.

Robots use IoT technology for both inventory management and spatial awareness. If it knows stock is low in one area, it can access inventory databases to find and replace it.

4. Management Systems

Warehouse use complex management systems to report faults, track assets, manage employees, and much more.

Connecting all this to a single platform using IoT devices means managers can access data from a single location. This helps to improve overall efficiency.

For example, an employee’s barcode scanner could report how many packages an employee processes, showing their productivity. A robot’s inventory system would show what stock is low and how much is in reserve.

Examples and Benefits of IoT Technology in Warehouse Management

While the above are growing trends in warehouse management, they don’t address specific examples and the benefits of IoT technology.


So, to make it as clear as possible, here are some examples of IoT technology in warehouse management, along with the main benefits.

Benefits of IoT Technology

If you already know anything about IoT technology or warehouse management, the benefits should be obvious. Even so, here are the main benefits of IoT in warehouse management.

Reduced costs

This is always an unfortunate one to discuss, as reduced costs usually come at the expense of jobs. But, that isn’t the only cost reduction IoT enables.

The most important is improved stock management. For example, if a warehouse tracks stock using blockchain technology, it’s almost impossible to get it wrong. Granted, some stock might still go missing, but at least you’ll be sure of it.

IoT also allows devices to report faults, errors, and inefficiencies. This helps to improve the system’s overall flow, reducing costs.

Easier to scale

Using IoT technology, it’s possible to optimize the layout of a warehouse. For example, if tracking sensors report downtime between point A and point B, you have the necessary information to justify a change.

It’s also possible to scale up IoT systems as a warehouse grows. The benefit of IoT is that it’s infinitely scalable, and it’s relatively simple to add in new devices. Again, this flows back into cost-saving.

Better forecasting

Managing a supply chain requires efficient forecasting. This is especially true for something like e-commerce, which is subject to seasonal spikes in demand.

Using previous season’s data, a warehouse manager can more efficiently assign workers and order stock in advance.

In the future, this might even shift to a fully automated system in which the IoT network plans, orders, and assigns on its own.

More efficient workflow

Using tracking sensors means workers will always know where stock is. Not only does this make it easier to find, but it also means workers can be in the right place at the right time.

IoT data allows warehouse managers to understand the layout and flow of space too. Again, this means workers can be where they need to be with minimal downtime between jobs.

Examples of IoT Technology

Rather than addressing specific technologies, we’ll look at some warehouse examples that showcase the true potential of IoT devices in warehouse management.

Amazon

Sure, we’ve already mentioned Amazon, but the largest retailer in the world is clearly a good example of how to run a warehouse (in some ways, at least).

Amazon has more than 175 warehouses globally and has 100,000 robots in action. It bought Kiva Robots in 2012 and integrated its product into its warehouse management processes.

Its robots automate order management, picking stock and transporting it to packing areas. The robot receives an order wirelessly, moves to the product, and transports it to the desired destination. To make things “simpler”, the robots are pre-programmed with routes around the warehouse.

You can check out this video to see the robots in action.

Ocado

Ocado is a British, online-only supermarket. Its fulfillment centers are almost fully automated and work along the same lines as Amazon’s. The biggest difference is that Ocado’s robots look like washing machines!

Again, check out this video to see them in action.

They communicate over a 4G network and use algorithms to avoid crashing along their routes. The warehouse can process 65,000 grocery orders a week this way.

Alibaba

There’s not much to be said about Alibaba that hasn’t been said about Amazon. After all, this Chinese company is Amazon’s biggest rival. It recently invested $15.6 billion into improving its smart network across its warehouses.

Its logistics company, Cainiao Network, uses IoT technology to improve delivery processes. For example, its vehicle tracking devices have helped it to reduce cross-border delivery time by 60 days! It’s also able to offer same-day delivery across almost all of China, which is a pretty big achievement.

Final Thoughts on IoT in Warehouse Management

Considering the benefits of IoT in warehouse management, it’s no surprise that it’s here to stay. Warehouses were one of the earliest adopters of this tech, and for good reason.

Looking forwards, we can only imagine what a warehouse will look like in 20 years. IoT technology has improved massively in such a short time; the impact it’ll have on warehouse management in the future is an exciting prospect.

Scroll to Top