Technology associated with the Internet of Things continues to gain steam among enterprises. An estimated 43 percent of organization implemented IoT adoption plans last year, according to research from Gartner. This momentum is expected to continue as the technology crystallizes and best practices solidify.
While IoT devices are best known for their burgeoning role in shop floor workflows, the fixtures are also gaining footholds in other areas of the supply chain, including the warehouse. Firms of all sizes are deploying advanced devices to streamline shipping and fulfillment activities. In fact, this activity has catalyzed immense growth in the IoT warehouse management market, which is expected to grow to more than $19 billion by 2025, according to projections from Grand View Research covered in Modern Materials Handling Magazine.
Just how are organizations integrating IoT into the warehouse?
Hovering amongst the shelves
Drones have achieved immense popularity in the consumer realm. Surprisingly, the devices are also taking hold within the enterprise realm. Organizations with extensive warehouse operations are driving this trend, Robotics Business Review reported. Major retailers such as Amazon and Walmart use unmanned aerial devices to conduct inventory activities and other mission-critical shipping and receiving functions.
For example, the latter deploys camera-equipped models that can capture 30 images per second, allowing them to quickly identify missing items. These drones also have the ability to conduct site-wide inventory sweeps within a day, The New York Times reported. Human employees require roughly a month to complete the same tasks. Walmart has announced plans to allocate a good portion of its $2.7 billion labor and technology budget to drone-centered efforts.
In December of last year, drone pioneer Amazon inadvertently unveiled a revolutionary new use for unmanned aerial technology, TechCrunch reported. The e-commerce giant filed a patent for airborne fulfillment centers. The zeppelin-shaped fixtures would act as floating warehouses, enabling delivery drones to swoop in and pick products for delivery. The patent even included specifications for a temperature-controlled version designed for storing perishable food items. While such an application is unlikely to materialize soon, its existence does speak to the continuing development of warehouse-specific drone technology.
IoT from the ground up
While most organizations integrate IoT technology into existing facilities, others take a more extreme approach, developing warehouses whose core architecture is tied to web-enabled devices.
Target is one of these outliers, The Wall Street Journal reported. Last year, the big box retailer debuted a new shipping and fulfillment center in Newburgh, New York. On the outside, the warehouse is indistinguishable from similar sites. However, the spaces inside are entirely different. Autonomous robotic carts on rails fly down aisles within an enclosed storage area called "the box," nabbing products for shipment and placing them on an outbound conveyor. Another robot at the end of the belt arranges the packages into tightly packed pallets before autonomous arms, some as tall as 9 feet, wrap the bundles in cellophane. A small team of technicians oversees the operation, standing by to ensure the advanced software running the show remains glitch free.
This facility offers a glimpse into the future of warehouse operations. However, such operations are likely to remain few and far between, at least for now. Why? The cost. The Massachusetts automation firm that outfitted the warehouse charges between $40 million and $80 million for such work, fees that most firms simply cannot cover. For example, of the thousands of warehouses used by the 75 top grocery chains in the North America, a mere 8 percent are completely autonomous, according to research cited in The Journal.
Even so, as the technology continues to develop, prices may drop, opening the door for smaller manufacturing outfits interested in establishing IoT-centered shipping and fulfillment centers.
Adoption low
While these devices offer immense potential, the overall adoption rate for warehouse IoT technology remains low among possible users. In 2015, Daintree Networks and Modern Materials Handling Magazine surveyed more than 200 warehouse leaders on internal IoT adoption efforts. Approximately 4 percent had implemented the technology, while 9 percent attested to initiating workable implementation strategies. More than half said their businesses had no plans for integrating IoT devices into existing workflows.
Despite these low adoption figures, IoT is bound to build momentum over the next few years as technology firms develop more cost-effective automation solutions and enterprises find ways to fit such technology into their budgets.
With this inevitable shift in mind, organizations in the manufacturing and logistics sectors must rejigger their backend processes in preparation, including warehouse management software. This way, prospective enterprise IoT users can develop and hone data-backed workflows prior to implementing advanced web-enabled devices. Here at F&A Data Systems, we design cost-effective, cutting-edge WMS solutions meant to facilitate automated merging, packing, palletization and sorting practices. Connect with us today for more information.