What is a smart warehouse? Pros and Cons of Smart Warehouse

Today’s automation and artificial intelligence technologies have not only brought about major changes in production, but also created tremendous improvements in warehouse management and operations. Smart warehouses, also known as automated warehouses, are one of the most advanced technological solutions that help optimize the process of storing, managing, and transporting goods. So what is a smart warehouse and what are its advantages and disadvantages, explore with RX Tradex in the article below.

1. What is a smart warehouse?

A smart warehouse, also known as an automated warehouse, is a large storage facility for raw materials and manufactured goods, using technology and machinery to carry out warehousing operations. Compared to traditional warehouses, smart warehouses are capable of handling requests faster and more efficiently.

Warehouse operations include receiving and identifying orders, counting products, storing and remembering their location, and sending orders to the correct address. The warehouse automates almost the entire process and journey of goods from supplier to customer with high accuracy.

Smart warehouses incorporate a variety of automated technologies, creating a connected environment where goods and requirements can be received, sorted, sorted, identified, and prepared for shipment automatically. The combination of these technologies allows for increased productivity, quality, and efficiency of warehouse operations, while minimizing errors and labor requirements.

2. 7 Smart Warehouse Technologies You Should Own

Here are 7 technologies needed for a modern smart warehouse:

2.1. Warehouse Management System (WMS)

The Warehouse Management System (WMS) comprehensively integrates all warehouse data into one easy-to-access platform. This provides supply chain members with a comprehensive view of warehouse operations, quick reporting, real-time statistics, and accurate planning capabilities.

Benefits of WMS:

• Real-time data access increases visibility throughout the supply chain.
• Accurate demand forecasting.
• Reduce labor costs through efficient labor allocation.
• The warehouse process is streamlined and the warehouse layout is optimized.
• Improve selection accuracy and reduce the time between selections.
• Improve warehouse flexibility and responsiveness.
• Enhance warehouse security and safety, improve supplier relationships and customer service levels.
• Ability to execute a continuous optimization strategy.

2.2. Automatic Selection Tool

In distribution centers with large volumes of goods, the automatic picking tool helps optimize picking, assisting or completely replacing humans during the picking process.

Benefits of the auto-selector:

• Minimize human error and ensure high accuracy in the picking process.
• Continuous operation 24/7, helping to shorten pickup time and increase efficiency.
• Employees can focus on higher-value tasks.
• Minimize errors and loss of goods, improve service quality.

2.3. AGV autonomous vehicle

AGV (Automated Guided Vehicle) fully automates the process of transporting goods, from delivery, loading to warehousing, helping to optimize efficiency and save costs for businesses.

Advantages of AGVs:

• Move automatically along digital paths, completely eliminating human involvement.
• Operating continuously 24/7, increasing transportation productivity.
• Equipped with an advanced navigation and positioning system, which ensures precise movement and avoids collisions.
• Easy to deploy in existing warehouses, flexibly add AGVs when transportation demand increases.
• Minimize labor costs, maintenance costs, and repair costs due to accidents.

2.4. Automated Storage and Retrieval System (AS/RS)

Automated storage and retrieval systems (AS/RS) fully automate the process of storing and retrieving goods, minimizing labor needs, saving costs, and improving operational efficiency.

Benefits of AS/RS:

• Automate the process of storing and retrieving goods.
• Modular design, easy to expand or shrink as needed.
• Highly accurate operation, limiting human error.
• Increase the speed of storage and retrieval of goods.
• Manage detailed information about the location, quantity, and condition of goods.
• Minimize occupational accidents caused by manual transportation of goods.

2.5. IoT Deployment

The Internet of Things (IoT) helps control all the moving parts of the warehouse, minimizing risks and avoiding mistakes or accidents.

Benefits of IoT:

• The sensor monitors temperature, humidity, and other conditions.
• Data from vehicles and products minimizes theft, counterfeiting, diversion, and damage.
• Sync data in an easy-to-access network, optimizing inventory control, labor planning, and customer experience.

2.6. Artificial Intelligence (AI)

Artificial Intelligence (AI) improves productivity and minimizes errors in logistics, improving the efficiency of warehouse operations.

Application of AI in logistics:

• Optimize the product selection path, automatically determine the most effective route.
• Analyze the product type, quantity, size, and weight to determine the most suitable type of packaging.
• Automatic product packaging, calculating the most space-saving packaging way.
• Manage inventory efficiently, track the exact location and quantity of products.

Benefits of AI:

• Improve operational productivity.
• Minimize errors and errors.
• Save labor, packaging, and transportation costs.
• Optimize storage space.
• Improve inventory control and management.
• Improve customer service.

2.7. Mobile Devices

Mobile devices have become the standard in the logistics industry, offering many outstanding benefits.

Benefits of mobile devices:

• Access inventory information, order data, and product locations right on your mobile device.
• Minimize travel and waiting time, improve operational productivity.
• Support more effective communication and work coordination.
• Employees can work anywhere in the warehouse.
• Minimize errors caused by manual data entry.
• Save on the cost of procurement, maintenance, and fixed computer upgrades.

Mobile app:

• Scan product barcodes, locate location, quantity, and product information quickly.
• Update inventory counts directly on mobile devices.
• Check and confirm your order right on your mobile device.
• Track and manage product placement in the warehouse.
• Use messaging, phone calling, or video conferencing apps to communicate and coordinate work.

3. Smart warehouse deployment cost

The implementation of an automated warehouse system (smart warehouse) brings many benefits to businesses, from improving operational efficiency to minimizing costs and enhancing competitiveness. However, the cost of investing in this system is an important factor that needs to be scrutinized. Here are some of the factors that affect the cost of implementing a smart warehouse:

• System complexity and scale: The more complex and large the automation system, the higher the investment cost.
• Desired level of automation: Businesses can choose to automate the entire process or only certain parts. A higher level of automation will require greater investment costs.
• Scale of business operations: Businesses with large scale and large inventory will need to invest more than small businesses.

Estimating the Cost of Deploying a Smart Warehouse

The cost of implementing a smart warehouse can be estimated as follows:

• Basic solution: Ranging from 200 to 300 billion VND.
• Advanced solution: About 300 to 500 billion VND.
• Comprehensive solution: Over 500 billion VND.

The above figures are for reference only and specific costs may vary depending on the actual needs and conditions of each business. Investing in a smart warehouse requires a large initial cost, but the long-term benefits such as reduced operating costs, increased productivity, and improved customer service will provide significant value to the business in the future.

4. Advantages and disadvantages of smart warehouses

4.1. Advantages

Smart technology is evolving, helping businesses do their jobs faster and more efficiently with minimal hassle. Smart warehouses are a breakthrough solution that brings many benefits to businesses. Here are the outstanding advantages of implementing a smart warehouse:

4.1.1. Warehouse Optimization

Smart warehouses help improve warehouse efficiency and optimize workflows through the use of advanced technology solutions. Advanced data analytics are driven by algorithms that help manage inventory flow, optimize storage, and minimize bottlenecks in the process. This not only helps to record important metrics, but also allows the warehouse to operate more smoothly, thereby providing better customer service.

4.1.2. Reducing Operating Costs

One of the biggest benefits of a smart warehouse is its ability to automate many tasks, minimizing human intervention. Smart warehouse design with a combination of robots, drones, and autonomous vehicles will make the execution of tasks automated or semi-autonomous, thereby reducing labor costs and improving operational efficiency.

4.1.3. Speed up picking and shipping

Smart warehouses help shorten order processing times through the use of smart picking devices such as scanners, smart glasses, and robots. These systems minimize the time spent searching, verifying, and picking goods from storage shelves. Parcel and conveyor sorting systems also help to minimize errors and mislabeling, thereby shortening transit times and providing a competitive advantage.

4.1.4. Higher Accuracy in Warehouse Operations

Smart warehouses help minimize errors in warehouse processes, thereby reducing losses for businesses. Advanced technologies help increase accuracy at every step of the order fulfillment cycle, minimizing the number of lost, damaged, or expired goods due to improper inventory management.

4.1.5. Better Customer Service

With a smart warehouse, businesses can improve the way they interact with customers, respond quickly to changing needs, provide better support, and enhance the overall experience. Faster shipping, reduced costs, and quick responses help businesses build a more satisfied and loyal customer base.

4.1.6. Effective Asset and Inventory Tracking

Inventory tracking is an important factor in warehouse management. Smart warehouses use technologies such as RFID tags, barcodes, and sensors to provide accurate tracking of the location and condition of goods. This helps businesses improve their supply chain planning, ensure no out-of-stocks, and manage inventory more effectively.

4.2. Disadvantages

While the implementation of smart warehouses brings many benefits, it is also inevitable with limitations. Here are the main disadvantages to keep in mind:

4.2.1. High initial investment

Investing in automation technology requires a large amount of capital. Business owners may be hesitant to pay a large sum of money for the new system. While automated warehouse systems can be profitable in the long term, the short-term ROI is often unclear.

In addition to investing in machinery and technology, businesses also need to train employees to operate the system, which requires significant time and resources. Furthermore, the system needs to be programmed to operate efficiently in the specific warehouse space.

In addition to the initial installation cost, the system also requires regular maintenance. When a system fails, repairs often have to be performed by professionals, resulting in costly downtime. These costs reduce part of the economic benefits from staff reduction and process optimization.

4.2.2. Lack of adaptability

Automated warehouses are designed to perform simple, repetitive tasks. When there is a change in inventory or warehouse layout, the system needs to be reprogrammed. This becomes problematic if the warehouse frequently changes products or layouts.

In warehouses with consistent products and layouts, adaptability is not a big issue, but in a variable environment, this is a limitation to consider.

4.2.3. Impact on the workforce

The use of automation in the warehouse affects the workforce, reducing the number of jobs available to humans. This could lead to unemployment or the need to retrain employees for other positions in the business.

5. Smart warehouse applications of today’s businesses

Businesses are now applying smart warehouse solutions to many different fields to optimize processes and improve efficiency. Here are some common applications:

5.1. Warehouses of finished products and raw materials for manufacturing plants

Smart warehouse solutions are widely applied in food and pharmaceutical manufacturing and processing plants. This system helps to manage inventory efficiently, automate the process of importing and exporting goods, minimize errors, and improve productivity. Thanks to modern technology, factories can closely monitor and control raw materials and finished products, ensuring the quality of the final product.

5.2. Distribution warehouses, transshipment warehouses, consignment warehouses in the logistics industry

In the logistics industry, the construction of distribution warehouses, transshipment warehouses and consignment warehouses with intelligent warehouse management systems is a big step forward. These warehouses are equipped with an order picking line for each separate category, helping to minimize labor and space area. This intelligent system also allows real-time control of inventory data during retail picking and storage, improving the accuracy and efficiency of management.

5.3. Cold storage and cool storage for the frozen food industry

The smart warehouse solution is also applied in cold storage and cool storage to store frozen food, vegetables and fruits. The automation system helps control temperature, humidity and other storage conditions precisely, ensuring product quality throughout the storage process. Thanks to this technology, businesses can save energy, minimize waste, and optimize storage space.

6. The smart warehouse revolution

6.1. Development of smart warehouse technology

In recent years, smart warehouses have become a revolution in the storage and logistics industry. With the advancement of technology, smart warehouse solutions have changed the way businesses manage and operate their warehouses, offering many outstanding benefits.

6.2. Key Factors Driving the Smart Warehouse Revolution

Automation:

• Automation is one of the most important elements of a smart warehouse. Systems such as Robots, Automated Guided Vehicles (AGVs), and Automated Storage and Retrieval (AS/RS) systems have replaced many manual tasks, helping to increase efficiency and reduce labor costs.
• These systems not only work faster, but they are also more accurate, minimizing errors and enhancing reliability.

Artificial Intelligence (AI) and Machine Learning (Machine Learning):

• AI and machine learning are applied to optimize the warehouse management process. They help analyze data, predict demand, and recommend effective storage options.
• AI also assists in inventory management, helping to track and control goods accurately and efficiently.

Internet of Things (IoT):

• IoT plays an important role in connecting devices and systems in warehouses. IoT sensors help monitor environmental conditions such as temperature, humidity, and cargo condition.
• Data from these sensors is aggregated and analyzed to ensure goods are stored in the best conditions, minimizing losses and damage.

Warehouse Management System (WMS):

• A WMS is an important tool that helps manage the entire operation of the warehouse. It provides a comprehensive view of inventory, orders, and the shipping process.
• WMS also supports workflow planning and optimization, helping businesses improve efficiency and minimize costs.

7. Conclusion

Thus, the automatic sorting system is not only a technology to optimize the production process but also a strategic investment for the sustainable development of the business. With the ability to integrate advanced technologies and optimize operations, smart warehouse systems will be a solution that opens up many opportunities for businesses to promote productivity, product quality, and production costs.

In addition, if you are looking to access many solutions to improve your production process, register to attend Vietnam Manufacturing Expo 2024. This is a great opportunity for businesses to access cutting-edge technologies, meet leading experts in the industry, and discover the most optimal solutions for their business. Register here to participate.