AI in warehousing 

In the last few years, we’ve been hearing a lot about how artificial intelligence will change the
way we do business, and now, here we are in 2020, creating staggering amounts of digital data
and incorporating AI to help us manage this. As a result, many companies are trying to figure out
how to utilize new AI-enabled warehouse technology today to try and get ahead of the
competition.

ECommerce retailers particularly are finding many ways to put AI to use in their warehouses, and
operations are being greatly improved by this. Autonomous robots, personalized portals
providing customizable data analytics, chatbots with immediate customer support, and tailored
search results and ads for product recommendations are just a few ways AI is making
warehouse technology smarter.

Machine learning and robotics have a long way to go until they are truly thinking for themselves,
but they optimize productivity and bring us a brand new experience within the warehouse.

The efficient use of AI in eCommerce helps more warehouses connect utilizing the cloud,
allowing them to track and map out the fastest way to ship products. The ways in which
companies are using AI in the warehouse to become more efficient, improve platforms, and
streamline the packing process are growing every day.  According to Statista.com, revenues
from the global AI software market are expected to grow from $10 billion in 2018 to $126 billion
by 2026.

What is Artificial Intelligence?

If a machine learns from experience (i.e. gathers knowledge independently) and can then act
based on those experiences, its considered artificial intelligence. These machines can process
information like any human and adapt to any new or changing situation.

The most sophisticated piece of machinery known to man, other than the human body, is a piece
of machinery using AI. In computer programming, the conventional approach is to tell a computer
to do something by breaking down each problem into a smaller one that the computer can
perform.

But, in a neural network, you don’t tell the computer what to do. Instead, it learns what to do and
solves the problem on its own. One example includes the warehouses of British online grocery
store Ocado, where robots sort and pick groceries for orders. This is done fully autonomously in
the warehouses.
Artificial Intelligence vs Machine Learning

Right now, there’s a bit of a boom going on in the different types of neural networks available and
how AI is applied in different industries. That’s why it’s important to understand the difference
between artificial intelligence and machine learning.

Artificial intelligence refers to a man-made object that has the ability to think or understand like
humans. It is a system embedded in a machine or software that simulates natural intelligence to
solve problems. Perhaps most importantly, AI is capable of making decisions and responding to
situations like humans do.

In its simplest form, machine learning allows machines to gain knowledge on its own, rather than
being programmed. It’s a subset of AI, and the ultimate goal is for a machine to learn to perform
a certain task and do it well. To do this, a machine will analyse data and create self-learning
algorithms. The crucial point here, though, is that with machine learning, these machines have
very static responses - they can't think or adapt the way AI-enabled machines can.

Fully automated warehousing has not yet been achieved, but these are some of the ways AI will
transform warehouse management:

1. Communication
Automated systems using AI and machine learning algorithms can communicate at an
exponentially greater rate than human operatives. Many warehouse related activities are already
automated, but introducing IIoT-enabled devices into these processes will vastly improve their
speed and accuracy. Wireless I-O Link and Fieldbus data communications mean that all
elements of the system can talk to each other, with a dialogue that incorporates system
monitoring and control. Deep learning processes enable the machines to conduct constant
analysis of the data streams produced by these components, enabling them to implement real-
time adjustments and improvements in an integrated warehouse management system.

2. Warehouse logistics
Another way AI will transform warehouse management is by optimising the logistics, i.e.
calculating the number of pallets or packages that need to be moved in any given day, and how
much equipment is required to handle that movement. While this calculation previously relied on
variables such as operator skill level and SKU (stock keeping units), machine-learning algorithms
enable detailed stock movement forecasting and management to fine tune material handling. In
this way, operator error and processing times can be reduced, with corresponding increases in
overall efficiency and productivity.

3. Productivity
AI will further transform warehouse management by improving the productivity in pick-and-pack
processes, with machine learning enabling managers to leverage the efficiency of the most
productive pickers so as to develop a fully integrated system-directed solution. Slotting software
products already provide an interface that includes operating rules to be implemented in the
smart warehouse, offering a recommended SKU strategy based on sales histories and forecasts.
While actual people still use personal knowledge and experience to adjust the slotting strategy,
this will increasingly be phased out in favour of machine-learning algorithms.

4. Inventory
AI will also transform warehouse management by freeing up money previously spent on
inventory control for other business growth opportunities. RFID (radio frequency identification) is
replacing paper trails and bar code scanners for the organisation and control of inventory,
tracking products with digital tags and enabling a more precise and accurate inventory control.
Because the system uses radio waves to transfer data around, RFID scanners don't need direct
line-of-sight control, but are just pointed in the general direction of a product to identify it and
direct its movement into, around and out of the warehouse. This aspect of the smart warehouse
can also be linked to the central AI processing unit, adjusting the speed and volume of order
processing to increase overall productivity.

5. Robots
AI is already transforming warehouses with the use of robots, which can pick up goods and
redistribute them within a fraction of the time required by human operatives. Machine-learning
algorithms can help warehousing bots select the most efficient picking and slotting routes and
determine the best type of packaging based on the size, number, weight and type of product.
Some machines now can even pack the products themselves, using AI to optimise the space and
materials.

6. Wages
Perhaps the most controversial way in which AI will transform warehouse management is in the
reduction of payroll expenses, though this may initially be offset by the required technological
investment. At the current stage of development, robot assistance impacts existing operations
only as an aid to productivity, but AI could – and will – continue to improve machine handling
capabilities, with 30% of UK warehousing jobs becoming fully automated by 2030. The likeliest
sectors for automation are data collection and processing, and predictable physical activities.
Large e-commerce enterprises suggest that increasing their automation will create jobs by
expanding the overall scale of their business activities, but this remains to be seen.

How AI Will Revolutionize the Warehouse

Intelligent, autonomous warehouse technology is already having a huge impact on warehouses
around the world. In fact, it’s been predicted that 30% of UK warehousing jobs will become fully
automated by 2030. These systems can accurately forecast patterns and simplify information
processing so that businesses can better manage their inventory. You’ll no longer have to
manually update databases, and mistakes will be greatly reduced.

AI will change how materials move by improving the handling systems and conveyors.  The
facility itself, the doors, ramps, and elevators will all collect data leveraging the massive data sets
collected. Here are a few ways in which AI will revolutionize the modern warehouse.

1. Human-driven vehicles (like forklifts) will give way to automated vehicles such as small
carts that come equipped with warehouse management software or 3PL systems, or
smart trucks that can assist with the surveillance of parcel management.
2. Warehouse automation robots can be used to automatically stack and store products in
a facility; placement can be decided algorithmically, depending on the popularity of each
product so that frequently purchased items are easily accessible and items that are
bought infrequently are further away.
3. AI can help predict how much manpower you need at different warehouses, as well as
what transport options are required and what routes are available.
4. Product orders can be automatically validated by intelligent systems, which can also
help dispatch the products automatically, track shipments, and follow up with buyer
feedback.
5. It’s inevitable that your warehouse will face unpredictable situations. Because AI thrives
on predicting patterns, it can help you prepare contingencies for these situations, giving
you ideas for how to manage your inventory and warehouse operations in tricky times.