How Industry 4.0 Affects Warehousing on Demand

Summer is almost here. Imagine you are about to go camping and you have just returned from grocery store with all sorts of great picnic dishes: marinated pork, salad, spinach dip, caprese salad, etc.  Unfortunately, when you open your fridge you understand you’ve bough too much food that you can’t store it all in your fridge. Now, you’re faced with a dilemma. You have to guess which foods won’t spoil if they’re stored at room temperature overnight, and prioritize fridge space for those that won’t.

How could you have avoided this situation? Sure, you could have tracked your inventory carefully by hand, but who has the time or the inclination? On the other, you could have used a smart fridge—something that will track food as it enters and exits the refrigerator, and can even virtually tag things by date so that you know when they’re likely to go bad. In this scenario, your triage is a breeze, you know exactly what’s in the fridge, and you can transport it to the camp site without incident. In this way, it’s a lot like warehousing on demand in the era of Industry 4.0.

Disconnect

Similarly to the scenario we described above, a serious disconnect between the production area, the warehouse, and a distribution processes is familiar to many companies. Logistics managers need to keep track of production processes in order to make sure that inventory space is being opened up and allocated appropriately, maintain order in that inventory space in order to keep an accurate accounting of which products are available and which aren’t, and create a synergistic flow that enables easy loading of goods onto trucks for distribution.

Static Rules

In a manual, nondigital world it can be especially difficult to keep track of where everything is and where it’s going. Historically this was managed by static rules. Roughly the same production processes yield roughly the same inventory levels to be distributed in roughly the same way—regardless of changes in demand or market conditions.  But let’s imagine you’re able to predict in advance that there will be a dip in demand for a particular product: in an ideal world you would change your production ratios to account for this relative demand paucity—but doing so would mean adjusting your inventory strategy. This requires an extra round of planning and optimization that can be difficult to carry out without the high level of visibility that tends to come from digitized environments.

High visibility can also mean information overload, confusion, slowdowns, and, ultimately, late deliveries.  How to make sure that new predictive capabilities provide value? How can you adapt your workflows such that obviously value-additive processes like better demand management actually result in added value?

Meet Industry 4.0

Challenges we described have resulted from poor visibility, which in turn led to a subsequent lack of adaptability. This is where digitization in general and Industry 4.0  come in. In an Industry 4.0 environment, your production floor operations are connected via digital infrastructure to your inventory management flows. Each finished product and its eventual location within your warehouse is entered in a digital register, such that mission critical information about your holdings can be easily accessed at any time. Yes, this puts you in a position of increased certainty regarding which orders you can fulfill and on what timeline—but it also enables you to provide real-time production feedback based on which items are moving and which aren’t. From there, you can gain the necessary insight into the links between your processes to begin scheduling transport on the fly.

When people talk about Industry 4.0, the rhetoric can often be a bit high-flown. But in the case of warehouse logistics, there’s a fairly concrete path forward. Smarter, connected data streams from your factory floor mean more information and more visibility. Those things, in turn, mean that you have the resources you need to begin optimizing your operations more dynamically. All of the pitfalls we described above that come with ditching your static options cease to be a problem. Why? Because you can model the effects of any proposed changes based on a digital representation of your real-time factory floor operations. In this way, emerging Industry 4.0 paradigms give you a usable, actionable alternative to a value-killing status quo.

Email us today to set up a free consultation and learn how Waredock digital experts can help you with your digital transformation agenda in logistics or retail industy.

 

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