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With the increasing popularity of e-commerce, the management and operation of distribution warehouses is becoming increasingly demanding. "Internet of Things" technology, which connects everything to the internet, is attracting attention. With the emergence of cheap sensors, baggage tracking and inventory management are becoming automated, and with advances in advanced communication network technology, autonomous mobile robots are being introduced. CB Insights summarizes these IoT technologies used in smart warehouses and future prospects.
E-commerce usage is rapidly expanding, and supply chains are under more pressure than ever before. According to a survey by industrial mobile equipment manufacturer Zebra Technologies, 83% of warehouses say they have plans to increase shipping volumes. Supply chain burdens are increasing.
Warehouse robots have been put into practical use, but inventory tracking, robot operations management, and delivery costs remain major issues. Warehouse management software and data platforms are increasingly being used, but reliability of data collection systems is hindering them.
In warehouses, IoT-based solutions are being introduced to replace traditional methods such as barcode scanning and spreadsheet software. With IoT sector funding reaching historic highs in 2020, opportunities for IoT adoption will further increase.
From energy usage to wearable devices to telecommunications networks, we will examine how IoT technology helps keep warehouses competitive.
Sensors are becoming cheaper and more universal, and more methods optimized for warehouse management are being developed. Cheap sensors will improve key warehouse metrics such as date and time tracking and inventory control, creating new opportunities for drone delivery and self-improving management.
Although factory automation is progressing, human workers still have important tasks. New IoT technology will improve communication between workers and robots, monitor worker safety, and automatically perform routine tasks such as barcode scanning.
New communication network technology will allow warehouses to expand their business and track locations such as baggage. Since warehouses are rapidly expanding their handling capacity, they must also incorporate new areas such as energy usage and automatic guided vehicles (AMR). Strengthening communication network technology will increase business and technical scalability.
Why Warehouses?
While warehouse profit margins are typically in the single digits, accurate inventory management and ordering can be handled easily. These metrics are affected by constantly changing consumer buying behavior. Consumers are focusing on fast, accurate delivery of online-only products.
The number of robots in warehouses is also being considered. It is expected that 4 million robots will work in warehouses. In this scenario, nearly 30% of current workers will be replaced by robots, so worker skill enhancement is needed. Wearable devices are evolving to enable workers to use automated tools and complete work more safely.
In addition, connecting workers, robots, and baggage to the internet requires high connectivity and reliability. Private network technology for the high-speed communication standard "5G" (networks provided at company premises using frequency bands from each communications company) is still in early development, but warehouse use of tablet terminals and smartphones for communication is being improved.
Tracking baggage and machine locations requires higher precision than current global positioning system (GPS) location information. This is another area where telecommunications network technology can make an impact.
RFID Chips and Ultra-Low Power Semiconductors
To monitor your supply chain, you need cheap and reliable tracking sensors. Traditional inventory and equipment tracking methods like barcodes are prone to errors, tedious, and time-consuming, requiring laser scanners.
On the other hand, IoT sensors tend to be expensive due to high component costs such as button batteries. These power sources are difficult to charge or replace on a large scale, and leakage can cause device failure.
Therefore, radio frequency identification (RFID) is becoming an effective means of wirelessly tracking inventory and equipment. Many tags don't require batteries. RFID tags store information in onboard memory and can be read immediately without manual scanning.
RFID is provided by many existing listed companies such as Impinj and Zebra Technologies, as well as expected listed companies such as Alien Technology and Savi Technology.
Early-stage startups are using RFID tags to bring new data streams into their warehouses. For example, California-based ZaiNar has developed RFID chip location tracking technology. In 2019, Dutch Smartrac Technology partnered with sensor manufacturer Axzon to use battery-free RFID-based sensors to track temperature and location.
In addition, major semiconductor companies like Arm have started producing computing chips that operate without batteries and use wireless power and data transmission. The company is researching perishable supply chain tracking using computing RFID (CRFID) chips. With this chip, passive detection of warehouse temperature and illumination becomes possible.
Israel's Wiliot is a chip that generates internal power using ambient radio waves, and mentions similar uses for CRFID chips, such as tracking the temperature of vaccine bottles. The company has raised $ 269 million.
Connected Workers and Wearables
Wearable technology simplifies worker tasks such as picking, sorting, and handling baggage.
Warehouse workers have started wearing tablets, smartphones, and headsets to accelerate RFID and barcode scanning. For example, Switzerland's Scandit raised $ 80 million from Google Ventures and others to develop technology that adapts mobile devices for scanners. Meanwhile, Rufus Armor has raised $ 820,000 to fund development of wearable scanners.
Some companies focus on augmented reality (AR). There are various products such as Vuzix AR glasses that scan without using hands, and AR glasses for Ox (formerly Oculogx) warehouses.
Wearable devices can also reduce worker burden and injury risk. For example, Verve Motion devices can reduce back stress by up to 40% when lifting baggage. The device is used by companies such as warehouse workers in the US ADUSA supply chain network. BarbMotion, founded in 2020, has raised $ 20 million.
Other early-stage startups attacking this area include wearable PPE (personal protective equipment) StrongArm Technologies, a wearable device that analyzes and notifies you of high-risk postures (Kinetic) and Kenzen, a wearable terminal manufacturer that monitors physical worker conditions.
In addition, as warehouse tech companies try to have robots handle physical work, developing wearable technology for easy collaboration is becoming increasingly important. For example, automation service provider inVia Robotics is trialing a robot that brings items to workers for scanning and inspection.
Meanwhile, Realtime Robotics, funded by Toyota Motor, is developing spatial recognition sensors for collaboration.
Communication Networks and Communication Chips
As the number of robots connecting sensors and the internet increases, traditional Wi-Fi (wireless local area network) networks and wired connections experience interference and delays, making maintenance difficult. In other words, a low-latency, highly scalable local wireless network is essential in warehouses.
Startups are seeking to support IoT deployment using dedicated networks. For example, Portkey raised $ 12.5 million in Series A funding to develop network technology using sensors to detect location. On the other hand, US-based NFWare manages network loads from sources such as sensors.
Large companies such as Swedish telecom equipment maker Ericsson also claim their warehouse-specific 5G network equipment offers advantages such as robot control security and scalability.
Such networks are key to widespread use of automatic guided vehicles. This is because AGVs must quickly upload sensor data from lidar and other sources to avoid collisions and coordinate driving with each other. For example, Korean telecom giant KT partnered with Korean startup Twinny, which handles AGVs, to deploy 5G in KT's warehouses. In initial testing, the amount of work that workers had to move was reduced by nearly half.
Meanwhile, the Pentagon has partnered with General Electric (GE) to pilot 5G in its Pentagon warehouse to improve inventory turnover.
Warehouse communication networks also help advance AGV management. "Telematics" products that combine telecommunications and informatics are used for warehouse robots to clarify accident causes and bring knowledge to AGV usage.
For example, seed-stage startup Sewio Networks is developing wireless communication technology centers in warehouses to replace GPS systems. Similarly, Systems' iDock Connect uses sensors in various areas to track metrics such as loading, proper placement, and docking, making it easier for administrators to identify inefficient areas.
Large companies also handle warehouse products. US major semiconductor company Qualcomm is developing a series of IoT chips focusing on features such as artificial intelligence (AI), energy efficiency, and internet connectivity. Cellular chips cover much longer distances than Wi-Fi, making them suitable for large warehouses and ports. In addition, Qualcomm believes these computing chips will be used for computer vision and data processing in IoT and edge computing.
Strengthening communication networks also supports the operation of machines that play a core role in warehouses. US major heavy electrical power company Honeywell International uses IoT sensors to diagnose machine status in real-time. This can prevent sudden failures.
Future Developments
Existing warehouse technology companies will launch attacks by releasing warehouse hardware and software that fully utilize data collected from IoT sensors to gain larger market share. For example, after Zebra Technologies launched its inventory management system SmartSight in 2020, it acquired AGV company Fetch Robotics. Amazon.com already provides fulfillment (a series of services including ordering, packaging, delivery, and payment), and recently began selling industrial sensors externally. In related industries such as industrial software, consolidation signs are emerging, such as UK industrial software giant Aviva acquiring US OSIsoft.
In addition, the use of sensors provided by companies such as US Fabric for micro-fulfillment (small order delivery centers) will continue to expand. This is because consumers increasingly desire to purchase products anytime, anywhere. Micro-fulfillment support services will attempt to introduce the latest IoT technologies into their clients' supply chains.
Finally, as sensor usage in warehouses increases and communication networks develop, new risks such as cybersecurity and energy management will emerge. Recent news about warehouse sensors being hacked by major companies like Tesla highlights the risks and needs of using smart devices. More IoT security startups will address these issues in the future.
