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May 24th 2019

A Smart Warehouse Enhances the Supply Chain

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Warehouse logistics problems are becoming a thing of the past, thanks to smart technology. Just as digital thermostats and security systems have reoriented life at home, and wearables have transformed healthcare, these technologies have great potential to improve the storage and delivery of goods. A smart warehouse uses IoT and autonomous technologies to better manage inventory and enable companies to reduce costs and improve customer service.

A company that integrates smart logistics technology into its warehouse and overall supply chain won’t have to worry about promising delivery of a product and then scrambling to get it there on time. By modernizing warehouse processes, a company can be nimble and efficient; it knows exactly what’s in stock and just when it can be delivered to a customer’s home or headquarters.

Smartness Leads to Efficiency and Less Waste

People shopping with B2C companies and organizations that purchase in the B2B space expect merchandise now. Credit Amazon with harnessing digital technology early in the game and making retail hyper-fast and responsive. The retail giant knows precisely where merchandise is in the supply chain and how long it will take to deliver.

Companies recognize that a smart warehouse and supply chain are not the exclusive domain of Amazon. That’s because anything connected to the internet — whether it’s a tag on a package or a sensor on a conveyor belt — is technically part of IoT, or the Internet of Things. By implementing IoT-connected sensors, RFID tags, wearables and other technologies, and with AI driving the analytics of data from those connected items, companies can shine a light on every inch of every warehouse and manage supply chain logistics with precision.

Warehouse technologies that capture data can increase inventory accuracy by up to 95%, according to SupplyChainBrain. Knowing what’s on hand in one warehouse, or even hundreds of warehouses, stops companies from blindly overstocking goods in case demand increases. When linked with the supply chain, the inventory of a connected warehouse enables companies to order and store only what is necessary.

Warehouse inventories that reflect true supply and demand not only save money, but they also affect the beginning stages of production. With companies placing exact orders for products, manufacturers can create only what’s necessary and reduce global waste. Companies can thus help curb the glut of unsold merchandise that finds its way into landfills. Such efforts could also halt the waste of food. Each year, 1.6 billion tons of food, worth about $1.2 trillion, is wasted annually across the globe, but supply chain efficiencies could reduce that loss by $150 billion annually, according to Boston Consulting Group.

This degree of certitude allows companies to be nimble in many ways. A true understanding of products and their final destinations lets companies determine which warehouses will store specific items. A warehouse in Seattle, for instance, might have more need for bulk stock than one in Tacoma, based on supply chain and warehouse data. Knowing what’s coming and going in a week’s or month’s time also allows warehouse managers to place inventory in the best spots within a facility to help employees retrieve items more efficiently.

Evaluate and Then Implement New Warehouse Tech

Now, don’t expect every company to deliver like Amazon right away. For one, some companies are hesitating on the shift to smartness. According to SupplyChainDive, companies that rent warehouses can’t agree with building owners on who should foot the bill for modernizing, which can cost as much as $200 per square foot, or 20 times the square footage expense of traditional space.

Still, getting smart doesn’t have to be difficult. As TechTarget detailed, slapping IoT and smart technologies on everything in the supply chain and warehouse doesn’t guarantee insight and intelligence. A company first needs to evaluate which smart technologies best fit their processes and where they would help.

After an evaluation, SupplyChain247 recommends first grabbing the low-hanging fruit of process automation. This means implementing technologies such as mobile barcode scanners, handheld devices and wireless printers. From there, a company can review data and take actions that make each warehouse floor efficient, whether it’s by reconfiguring shelving or retraining employees. Once the basics are in place and a company has a firm handle on its warehouse data, it can start to scale.

This isn’t to imply that warehouses without advanced technologies are “dumb.” But by implementing logistics technology, companies can smartly answer the real-time, on-demand needs of customers and ensure a package really does arrive when promised.

The most innovative supply chain professionals in the world call Northrop Grumman home.  Search for career opportunities in supply chain, or in other parts of our company:  Careers.NorthropGrumman.com.

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