Warehouse automation has grown in leaps and bounds in the last several years.

International trade is projected to double in the next 20 years, and the number of parcels needing global transportation is growing exponentially, according to an International Air Transport Association (IATA) white paper.

Warehouse facilities will need to keep pace to meet the demand. Many facility operations will become automated by 2030 and Artificial Intelligence (AI) will be driving the majority of repetitive activities, according to the white paper. The many items on IATA’s innovation radar include Internet of Things, automation in the warehouse, and unmanned vehicles and drones for air cargo, according to the IATA Cargo Strategy released earlier this year.

AI systems can provide simulations giving “insight into optimal warehouse planning and layout and improved travel times,” according to Dr Yvo Saanen, Commercial Director of TBA Group, which provides software solutions for ports, terminals, and warehouses. Additionally, AI data could identify the “limits on the maximum thresholds the warehouse and WMS (Warehouse Management System) can operate to, recognise trends and peaks in the operation, and look at the labour utilisation and where this could be adjusted,” Saanen continued. Based on the AI analysis, these configuration changes would be made automatically and continually be managed, Saanen said.

By 2015, 85% of distribution centre operators were using some form of a WMS, as reported by the Logistics Bureau.

Source: Logistics Bureau

According to McKinsey & Company, companies spend approximately €300 billion globally per year on warehousing, and more than 85% of that is on operating costs. These costs include labour, physical space, and the equipment necessary to receive, sort, store, pick, pack, and dispatch products. Implementing automation technologies could save at least €18 billion, the McKinsey & Company report said.

Several companies have opted to replace human workers with machines. Robots outnumber production workers 14 to 1 in an electric razor plant in the Netherlands. In 2013, Canon began phasing out human labour in favour of robots, according to McKinsey & Company. Amazon uses robots for picking orders, and, as of December 2016, 45,000 robots were being used to replace 75% of its warehouse jobs across 20 distribution centres, according to the Logistics Bureau.

Full automation of a warehouse would be a serious investment, with customised equipment, storage, and specially designed infrastructure.

Source: Logistics Bureau

“Modern large warehouses have to serve complex transport networks and the Transport Management System (TMS) assists in the planning of optimal delivery routes. Being able to respond to unexpected changes in a delivery is critical in ensuring delivery slots are met,” Saanen explained. Having an AI system with historical Big Data on pick/despatch duration, delivery times/ vehicle telematics in conjunction with real-time weather and transport conditions would allow for the continual monitoring of changes and disruptions ensuring deadlines are met, Saanen continued.