The arrival of artificial intelligence (AI) in warehouse management solutions has revolutionized one of the most traditional business sectors.
The arrival of artificial intelligence (AI) in warehouse management solutions has revolutionized one of the most traditional business sectors. The path is being led by large e-commerce companies like Amazon and logistics firms like DHL and FedEx as they see the cost and operational benefits of incorporating automation into their systems.
But there is more to warehouse management solutions than Amazon’s fancy robots that can make it to online viral videos. Speaking to a&s
Suresh Yerikireddi, Founder, Director & CEO of Inventrax
, explained five major roles that AI is getting into in this sector.
Improve operational efficiency
The role of artificial intelligence in warehouse management is primarily to address the operational intelligence
in the warehouse, besides its more traditional purpose of inventory control and inventory management, according to Yerikireddi. This itself includes a variety of factors.
“When I say operational intelligence, it includes workforce data capturing, other resource data capture, and inventory data capture,” Yerikireddi said. “So, with a combination of all these three supported by AI, we should be able to improve the operational efficiency, by improving the order fulfillment rates, improving the inventory accuracy, and ensuring the right product reaches the right destinations.”
Optimize workforce for better productivity
The second function is to optimize the workforce for better productivity. With AI algorithms, labor-management can be addressed, along with other supervisory level operations to manage the workforce.
Of course, there is also the factor that the introduction of AI-based robotic solutions into warehouses will decrease the need for manual labor and decrease costs. Robots can work without interruption for continuous hours and don’t need the extensive training processes that humans need.
Resource management improvement
Warehouses need to constantly make sure that their resources are used at the optimum level. While this is something humans could manage to some extent in the past, AI makes it even better.
“You have to ensure that the resources procured to the warehouse are utilized to their maximum without keeping them idle,” said Yerikireddi. “These resources include material handling equipment, docks that are built to receive and dispatch, other equipment like those used for packing, etc. The space of the warehouse should be utilized properly because that is one of the most critical cost components for any warehouse.”
All these resources require proper planning and scheduling. Proper AI algorithms can be used for this, taking into consideration the orders and shipments in the pipeline, vehicles available for dispatch to other locations, and other such factors.
Implement lean inventory practices
AI also helps in implementing lean inventory practices by cutting down the stocks and getting the stocks on demand. So, the procurement happens from the proper forecasting, based on the consumption and min-max configurations of SKU.
“Implementing lean inventory practices will reduce the lean inventory costs,” Yerikireddi said.
Improve inventory control and monitoring
Apart from the functions mentioned above, there are several other operations that were previously manually executed that AI can take over now.
These include consumption patterns, perpetual stock counts generated by the ABC (parity principle) based algorithms, item intelligence to locate in the warehouse, and inventory controls and check to manage shelf-life, expiry, aging (FIFO), and batch controls
These solutions are all already being implemented in several warehouses across the globe. But Yerikireddi points out that the final decision is based on the KPIs of the customer. One customer might say that he wants the space to be optimized best, while another may consider fulfillment times to be his KPI. The bottom line, however, is that regardless of the requirements, AI-based solutions have the flexibility of being tailored to a number of situations.