Consumers across industries and geographies are growing increasingly conscious of the impact of their purchase decisions on the planet. As a result, the adoption of greener and more sustainable practices, or smart technologies in warehouses, is escalating in the list of priorities not only for consumer-facing companies but upstream supply chains too. As each step of the supply chain contributes to the carbon and waste footprint at the product level, optimizing every step from a sustainability lens is becoming as important as minimizing costs while bringing speed and agility across the system.
Warehousing and distribution form a major part of supply chains. Considering the amount of non-renewable energy consumed and emissions generated by them, warehouse and distribution centers present an opportunity for the adoption of sustainability-driven smart technologies and strategies. Since green warehouses are underpinned by smarter technologies, the adoption of sustainable strategies leads to multiple wins for organizations considering the move.
Traditional vs. green warehouses
Today, warehouses serve diverse needs across the supply chain and exhibit varying energy consumption patterns. While cold chains need refrigeration in warehouses, dry storage warehouses serve as satellite hubs for last-mile fulfillment. Differing sizes of stored items also bring more nuances to the types of handling equipment required in these warehouses' and utilization of storage bays. Sustainability strategies must account for these challenges that have been intrinsic to warehouse operations. Here are some of the top opportunity areas for greener smart warehouses today:
- Energy utilization: While shifting to renewable energy can reduce a warehouse's carbon footprint, minimizing the energy requirements of smart warehouses can simultaneously bring cost benefits. Shifting to a net-zero state is an aspirational benchmark for leaders.
- Waste footprint: Type of packaging materials and the extent of collective recycling determines the waste footprint of the warehouse. Moving to a completely circular economy with complete recycling of non-biodegradable packaging should inform the target state of warehouse transformations.
- Optimal operations: Because warehouse operations are shouldered by mobile and static electrical equipment, optimizing their usage and maintenance can inject energy and cost savings simultaneously.
Leading companies across the globe are leveraging digital technologies to shift to green warehouse automation while scoring big wins for their bottom line. A simple example of such covalent strategies is the motor-driven roller conveyors that run only as long as there is a product to be moved -- costing only 12% more than traditional alternatives while being 92% more energy efficient. So, what does green warehouse automation driven by smart technologies look like?
Warehouse 4.0: An inside view to the warehouse of the future
Advancements in IoT, AI/ML, and networking technologies are at the core of green warehouse automation operations. Wi-Fi 6 and mobile connectivity technologies like 5G form the information highways of the smart warehouse. Outlined below are two key technologies and their use-cases in green warehousing.
Industrial Internet of Things (IIoT)
IoT sensors serve the primary purpose of collecting various data points in the warehouse. For instance, movement sensors can be leveraged to determine activity levels in various parts of the warehouse – using machine-to-machine (m2m) communications; this data can be leveraged to automatically switch lighting equipment on or off and reduce energy expenses; which account for 34% of overall energy expenditure in non-refrigerated warehouses.
Similarly, temperature sensors can be placed across storage shelves and bays to determine cooling requirements at a more granular level. Moreover, predictive analytics can be leveraged to routinely maintain and repair electro-mechanical components before failure, preventing sub-optimal functioning and keeping energy consumption levels at the baseline.
Artificial Intelligence and Machine Learning (AI & ML)
AI and ML technologies work in tandem with the data collected from IoT devices to augment human decisioning or eliminate the need for human intervention across high-level decisioning tasks. For example, automated storage and retrieval systems (ASRS) leverage AI-powered image processing, while robots and co-bots can determine the right time for charging at docking stations to prevent energy outages during operations.
AI and ML technologies can also be leveraged to run digital-twin simulations, which can help identify the optimal storage density and utilization levels. Lastly, information technology systems powered by AI can make sense of various data points to identify the right level of cooling for the goods stored within refrigeration units, thereby utilizing only the necessary amount of energy for cooling purposes.
Bringing it all together
Warehouse operations are usually orchestrated with the support of differing IT systems like Warehouse Execution Systems (WES), Warehouse Control Systems (WCS), and Warehouse Management Systems (WMS) -- increasingly, these systems are converging on to a single platform which helps multiple systems sync with the larger supply chain. This emerging trend of platform convergence helps avoid overcrowding of goods or low utilization levels at various checkpoints in the supply chain, in addition to enriching data across systems and functions.
In addition, intelligent warehousing platforms can also help track the amount of energy consumed and the ratio of renewable/non-renewable energy usage patterns. Moreover, such a platform can help the business introduce automation and intelligent decisioning use cases incrementally. This will enable the continued adoption of smarter use cases for the warehouse of the future while introducing the benefits of their adoption to the bottom line at the same time.
Green warehouses augmented by smart technologies result in tangible business outcomes:
- Smaller carbon footprint helps businesses serve carbon-neutral or low-footprint products to consumers, thereby giving the ‘warehouse of the future’ a competitive edge in climate-conscious markets.
- Optimal smart warehouse operations result in minimizing costs through lower energy requirements.
- Green ticket in markets with tighter regulations while steering clear of carbon taxes.
Green warehouses are a key aspect of sustainable supply chains, and as a result, a key opportunity area for organizations undergoing a sustainability transformation. Sustainability is rewarded well by today's investors and consumers alike; moving to a greener warehouse of the future can also help organizations foster better relationships with local communities. Given that it is sustainable, the warehouse of the future is likely to cost less than traditional warehouses in the long run. The inertia to transforming is, therefore, a missed opportunity in the path towards better sustainability ratings, lower operational costs, and enhanced stakeholder satisfaction.