AI is becoming an increasingly essential tool for fulfillment or distribution warehouse operations. Most 3PLs (third-party logistics companies) and distribution centers won’t be able to meet industry standards for speed and accuracy within a few years unless they integrate AI and ML into their warehouse automation.
But, like all technologies, successful AI integration depends on a clear understanding of what it can and can’t do to improve warehouse operations. Here are three tips to help you use AI effectively in a warehouse setting.
1. Understand not just the ‘what’ but the ‘why’ of warehouse AI applications
Adding AI to your warehouse automation can bring valuable efficiencies, such as better picking methods and routes, improved warehouse layout, and shorter order fulfillment times.
But, before you throw AI into the mix, it’s critical to understand your pain points and where to best apply artificial intelligence.
For example, suppose two 3PL warehouses struggle with lagging order fulfillment times. In the first warehouse, the current automation solution can’t keep up with a high SKU count combined with inventory velocities that shift based on complex external factors.
Adding AI to the mix will give the 3PL increasingly accurate projections to allocate shelf space and locate SKUs for maximum slotting efficiency. Problem solved by AI.
However, in the second 3PL warehouse, poor management has led to high turnover and low employee morale. Inexperienced staff make frequent mistakes, and managers lose a great deal of time training new hires.
In this case, the problem is personnel management, which needs to be solved before determining the best application for AI.
2. Optimize your workforce
In many warehouses, robots, drones, moveable shelving, and other warehouse automation have reduced the number of workers needed to complete operations and increased efficiency for those that remain.
However, today’s warehouses still rely on a human workforce. An essential element of successful warehouse AI is using it to enhance the work of your staff.
For instance, staffing needs in different areas may fluctuate throughout the day as stock arrives at the facility and orders ship out. Calculating labor demand in a vast warehouse may be too complex for a manager to do in real-time, but AI is up to the challenge, allowing your warehouse management to move at the speed of commerce.
3. Trust your automated systems – but verify
Humans make decisions based on a few factors; AI is capable of decision-making that accounts for thousands of variables. That makes AI a powerful tool for warehouse automation and one that can lead to novel strategies to increase the speed of operations.
In a fast-paced distribution or eCommerce fulfillment environment, you must rely on AI tools that optimize your day-to-day operations. However, analytics is key to long-term success in adding AI to your warehouse automation.
Compare performance in successive periods, before and after adding AI to the mix, to determine whether your systems need further tuning and if your AI application is appropriate. As your operations and industry standards inevitably change, expect to make changes over time.
The question is not whether to integrate AI into warehouse automation but how best to do it. Investing time and resources into smart warehouse AI will quickly pay operational dividends.
About the author: Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.
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