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December 2017
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A revolution hits warehousing
Mary Glindinning
Mary Glindinning

“Flying off the shelves” might be a reality in the warehouses of the not-too-distant future.

“I believe that drones have the potential to see significant adoption in warehousing and closed-system material handling (within the walls of a facility) years before we see their use in parcel delivery (for example, Amazon’s Prime Air concept pitched on 60 Minutes),” said Chase Murray, assistant professor of industrial and systems engineering at Auburn University.

Drones inside a warehouse travel shorter distances, don’t have to deal with weather and won’t trigger safety concerns of the general public, Murray said. The Federal Aviation Administration banned the use of drones for commercial use for now, so Amazon’s drone delivery plans will not occur before 2016, he said. “I don’t think we’ll see a large-scale implementation of delivery by drone before the end of this decade.”

The more precise, and preferred by some, term is unmanned or uninhabited aerial vehicle instead of drone.

Use inside the warehouse will come before deliveries, although some challenges remain. “Although UAVs are fairly adept at picking up items vertically, I’ve yet to see a system that allows an UAV to retrieve an item sideways (from a shelving rack),” so some infrastructure changes will be needed, Murray said.

It might all sound a little George Jetson (to those of us of a certain age who remember The Jetsons television show), but the parts to build robots are readily available, Murray said, and “a growing hobbyist community is creating new platforms that can perform some pretty interesting tasks. We’re seeing organic innovation from the public, not just from research labs. All of this innovation is happening very rapidly. Initially, the ‘cool’ factor captured my attention. I’m fascinated by the idea of small flying robots delivering goods. From an academic point of view, this technology has presented a host of new and interesting challenges” that must be tackled by cross-disciplinary teams to make the drones efficient and cost effective, Murray said.

That means drones would have to cut material handling times and costs. Costs of the drones themselves are hard to estimate and depend on application but “for indoor material handling, I think the pricing will be similar in scale to AGV (automated guided vehicle systems).”

Murray can envision a combined system, with a UAV piggybacking on top of an AGV, to pick orders.

It won’t work in every instance, because drones have limited payload capacity and endurance.

“For the right application, I do believe that UAVs will revolutionize material handling,” Murray said. “For example, in warehousing, UAVs may enable faster and easier access to goods stored at greater heights,” so warehouses could have smaller footprints and different warehouse layouts.

“Fortunately, the material handling industry has become quite comfortable with robots. AGVs have been in use for quite some time, and UAVs may be perceived as being the 3-dimensional counterpart to AGVs. The third dimension, and the fact that UAVs do not need aisles or roadways, is what will make this revolutionary rather than evolutionary. I think industry is waiting for someone to demonstrate how UAVs can successfully improve operations. Once that happens, I see the demand for UAVs increasing dramatically,” Murray said.

Aside from drones, the next decade will see increased, and possibly complete, automation.

“We’re headed into an era where there is a lot more automation—so in 10 years we may even be completely automated,” said Joe Micek, Vidmar manager of national accounts. “There are a group of fully motorized products that are keeping up with this trend. Motorized parts carousels take advantage of vertical space, capturing what was once wasted space and turning it into valuable storage. Because of one-person operation and motorized retrieval, they bring parts to the picker, thereby increasing productivity and improving worker safety. With this comes increased space efficiency; a motorized parts carousel’s small footprint maximizes floor space by fully utilizing vertical space.”

Micek named space utilization and inventory control -knowing where the product is and how to get to it quickly- as inefficiencies in warehouses.

“When you’re not using your warehouse square footage to your advantage it can easily lead to problems. Suddenly you can’t find what you’re looking for, inventory management becomes slow, and you can feel the pinch in your bottom line. Organization is the key to any well-run warehouse, and to be organized you need the power of an efficient storage system on your side. Store the product properly, know where it is, and pick and replenish it quickly,” Micek said. “For instance, two cabinets can store the entire contents of five units of standard shelving. That means you can double your storage capacity and free up space for more productive and profitable uses. What’s more, modular cabinets are designed with the flexibility of building blocks, letting you grow one or more cabinets at a time as your needs expand. You can then change them around into as many configurations as you would like, as often as you need.”

“Warehouses of the future will become more like true distribution centers where supplies that come in, and immediately go out without storage of the products,” said Chris Castaldi, director of business development at W&H Systems.

“With less storage, more cross-docking operations will occur. Cross-docking is a practice in the logistics field of unloading materials from an incoming truck and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between. The reason this is occurring is because more retailers are supporting omni-channel fulfillment operations that include fulfillment at stores instead of fulfillment from a warehouse. Stores will have visibility into inventory levels across all retail outlets and have the ability to fulfill orders in-house or get inventory from other stores to fulfill orders,” Castaldi said.

 Here are some cross-docking best practices, according to Castaldi:

•      Handle each piece of freight only once.

•      Make dock layout as compact as possible.

•      Match staff to shipment volume.

•      Keep the dock floor clean and organized.

•      Use materials handling tools to speed movement. Conveyors will allow cartons to travel directly from the unloading trailer to the loading trailer, eliminating travel time and extra handling.

Inventory management is an easily rectified inefficiency, Castaldi said. Automation helps keep track of where products are and also helps get them where they need to be.

“Most warehouses have issues with items that don’t get sold so they carry a stagnant inventory. These unsold items just continue to take up space in the warehouse, where their value is lost. To rectify this, warehouses need to act more like a distribution center and push these products out to the retail stores. They need to not hold onto the inventory and instead sell it in the stores. Retail stores, on the other hand, need to have areas within the store to handle fulfillment operations. Utilizing systems such as RFID-tags that identify, diagnose, and prevent out-of-stock conditions, will help to remove uncertainty from in-store inventories and prevent lost sales. Moving inventory out to the storefronts using automation to push products from the warehouse will help rectify the situation. Conveyors, picking systems, sortation units are all material handling automation equipment that can improve throughput and increase efficiencies. Order pickers spend about 60 percent of their time walking product or moving product around. Using conveyors or sortation systems can reduce travel time and improve throughput,” Castaldi said.

There will be two types of warehouses.

 “The warehouse of the future will come in two classes. We will continue to see the large centralized warehouse that is common today,” said Greg Henry, senior vice president of operations and software services for DecisionPoint Systems, Inc. “However, these warehouses will carry much larger product sets and may support multiple companies’ products as we continually look to remove cost from the supply chain. They will also continue to adopt technologies that speed the movement of product through the replenishment cycle. Product packaging will continue to evolve to match the capabilities of the automation equipment.”

Even with automation, people will still work in warehouses.  

“These people will be equipped with GPS sensors, voice computing and wearable display technologies to optimize their performance,” he said, including voice input smartphones or Google Glasses.

“The second class of warehouse is the small local warehouse that is likely an extension of retail location or display store front,” Henry said, which will reduce delivery times and inventories. Finance costs of inventories are one of the biggest inefficiencies in warehousing, and supply chain visibility and data analysis will minimize it, he said.

“You need data to make correct decisions and not rely on hunches or guesses,” said John Rosenberger, product manager for iWarehouse Gateway for the Raymond Corporation.

More data will be gathered and shared, he said. Software and apps on mobile devices will be priced so more companies can afford them.

But data needs to be analyzed to be of use. He foresees small to medium companies hiring someone to analyze data just as they hire someone to do their taxes.

“Monitor and take action on the data you receive,” Rosenberger said. “If you hook up a monitoring device and expect it to correct your problem, you might as well save your money.”

Use the data to change processes and standards, be more efficient with time and people.

“Labor is 70 percent of the cost in a warehouse,” Rosenberger said. “If a lift truck is waiting to go down an aisle that is too congested,” or if an operator is waiting for an available truck, that is costing money. One solution is to change delivery times so there will be less congestion and enough trucks to do the work, and have batteries that last the entire shift.

Mary Glindinning is a freelance writer who has worked at daily and weekly newspapers for more than 20 years. She lives in rural Shullsburg, Wis. E-mail to contact Mary.