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Top 5 warehouse technology trends for 2021

Effective warehouse management has become even more critical. Learn which technologies are most important to creating efficiency and gaining a competitive edge.

E-commerce has skyrocketed since COVID-19 hit, with consumers increasingly ordering items online rather than venturing out to a store, and they're demanding rapid delivery and easy returns.

That means your warehouses need to operate efficiently to keep pace with the current marketplace.

Here are five warehouse technology trends that have the potential to improve a warehouse's productivity and cut costs.

1. Warehouse management systems

Warehouse management systems (WMSes) are increasingly important as more organizations digitize their warehouse operations. Companies use a WMS to manage the moving parts inside the warehouse.

Who buys it: The warehouse manager or equivalent purchases a locally deployed warehouse management system, said Paul Miller, a principal analyst at Forrester Research. However, the COO or equivalent makes the decision to purchase and install a warehouse management system for most or all of a company's sites.

The "why": A WMS' applications include inventory management, putaway, order picking, replenishment, shipping and labor management, according to the 2020 Magic Quadrant for Warehouse Management Systems from Gartner. A warehouse management system can increase warehouse productivity and lower costs.

How it's integrated: Warehouse management systems typically integrate with order management systems, third-party logistics providers and ERP systems, Miller said. However, organizations can also run standalone warehouse management systems.

Who needs it: Organizations whose current systems, such as Excel spreadsheets or clipboards, aren't cutting it should look into a new warehouse management system.

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2. Automation technology

Warehouse automation was becoming popular before COVID-19 hit, and now it's even more crucial. It can help businesses meet consumers' increasingly high expectations.

Who buys it: Chief supply chain officers, with support from the CTO.

Warehouse managment systems are increasingly important as more organizations digitize their warehouse operations.

The "why": Warehouse automation can help companies with the new marketplace demands, said Saurabh Mehta, global head of markets, manufacturing, logistics, energy and utilities at Cognizant, a consulting firm located in Teaneck, N.J.

Automation can improve customer service, he said. Operations complexity is increasing because of demand -- warehouses and the amount of SKUs are growing. Automation can increase throughput and improve space optimization, which can shorten customer delivery time.

Automating processes can also reduce labor costs, which have been rising, Mehta said. Businesses likely have fewer workers for multiple reasons -- employees absent because of illness or stay-at-home orders, companies trying to save money -- and warehouse automation can close the gap.

Types of automation: Warehouse automation is a very broad category that includes anything that replaces or augments the work humans do.

Warehouse automation technologies include -- among many other things -- high-density automated storage and retrieval systems, Mehta said. These can optimize warehouse space. Goods-to-person automation can improve picker productivity.

How it's integrated: Warehouse automation systems typically integrate with the core warehouse management systems and related logistics systems, such as transportation systems, Mehta said.

Who needs it: According to Mehta, an organization likely needs automation technologies if company staff answer "yes" to any of the following questions:

  • Am I running out of space for SKUs in my warehouse?
  • Is my picking efficiency very low?
  • Is my labor productivity low?
  • Is my warehouse throughput below industry standards?

3. Machine learning in warehouse labor planning systems

Market leaders like Amazon have reaped many rewards of labor planning systems that rely on machine learning. A number of companies are following suit.

Who buys it: Chief supply chain officers, with support from the CTO.

The "why": Labor is one of the most critical resources in a warehouse, Mehta said, and efficient labor planning is becoming increasingly complex. Challenges include the variety of inbound freight and the increased number of SKUs.

Machine learning in labor planning systems can greatly improve labor productivity, leading to lower costs and improved service.

How it's integrated: Machine learning-based labor planning systems typically integrate with warehouse management systems. In some cases, they also integrate with ERP and transportation management systems.

Who needs it: According to Mehta, an organization likely needs these technologies if company staff answer "yes" to any of the following questions:

  • Is my labor productivity low?
  • Is my warehouse struggling to predict the next day's or week's labor requirement?
  • Is my labor forecasting accuracy very low?

4. Voice-activated technology

More companies are turning away conventional scanning in favor of using voice-activated technology for warehousing workflow processes.

However, more organizations will adopt a multimodal approach that incorporates voice and automated barcode data collection, Gartner analyst Dwight Klappich said. With a multimodal approach, a worker picks an item and feeds its information to the WMS via a headset. An employee can use a handheld device with a barcode scanner if serial numbers are extremely long.

Who buys it: The picking manager or the warehouse manager.

The "why": Voice-activated technology can increase productivity because pickers do more work in less time. It can also improve worker safety because employees can focus on their jobs while keeping their hands free.

In addition, multimodal voice systems can improve accuracy, which leads to customer satisfaction and higher profits.

How it's integrated: Voice-activated technology integrates with the warehouse management system or the ERP system.

Who needs it: A company whose warehouse employees would benefit from working hands-free should look into a multimodal approach.

5. Solar and other renewable energies

Many organizations are exploring renewable energy sources, particularly solar, because of warehouses' high electricity use.

Who buys it: The employee who buys the power for the building -- likely someone at the corporate level -- and the head of sustainability.

The "why": Warehouses have huge open spans on their roofs, so it makes sense to put solar farms there, said Steve Weikal, the commercial real estate tech lead in the MIT Real Estate Innovation Lab. Renewable energy lowers energy operating costs, and because it increases the building's operating income, the building's value goes up.

In addition, rewards exist for companies that use renewable energy.

For example, Weikal said, the Massachusetts government offers renewable energy incentives.

How it's integrated: Renewable energy sources integrate with the energy management system, the WMS and the hardware and robotics control systems, Weikal said. A company could calculate the time of day when the most energy is generated and schedule its driverless vehicles and robots to charge when there's the most energy available.

Who needs it: Companies should do a cost-benefits analysis for moving to renewable energy, Weikal said. The company's home state may have net metering, through which the company could get paid for the energy it adds to the utility grid. In addition, organizations interested specifically in solar energy should determine if their buildings can handle the solar panels' weight.

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