Benefits IoT Holds in Store for Warehouse Management

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Internet of Things has evolved the course of industrial operations from conventional and manually functioning means to a more autonomous and connected one. It is now doing the same for warehouses and distribution centers, allowing companies to completely revolutionize their stock level and supply chain management services.

Warehouses act as essential links in any supply chain that facilitates the storage of goods until they are dispatched at the location of their usage. The technology of IoT has enabled the development of smart warehouse management systems (WMS) that are:

• Optimizing floor level activities in warehouses and distribution centers.

• Enabling the best layout and configuration for the warehouse.

• Enhancing the efficiency of warehouse equipment.

• Providing unparalleled global visibility in the supply chain.

• Empowering managers to manage stock levels.

Smart warehouses that use automated guided vehicles (AGVs) and telematics are already in action. These warehouses through the use of disruptive technologies such as machine learning and IoT are minimizing manual intervention and are boosting the speed and accuracy of logistics processes.

How an IoT based Warehouse Management System Works?

Embedded with sensors, RFIDs (radio frequency identification), and beacon technology, the IoT based WMS allows the continuous flow of real-time data such as inventory locations and levels.

Different sensors measures attribute associated with the operation of warehouses such as humidity, temperature, location, and movement. This data can belong to material handling & movement systems, security & building automation systems, and facility management systems. After the data is gathered from these sensors; a computer analyzes, stores, and streamlines it into actionable insights. These insights can then be used by automated equipment to orchestrate various actions of a warehouse in real-time.

The warehouse automation technology had already crossed a valuation of $1.9 billion according to the 2016 estimate and is expected to reach a market value of $22.4 billion by the end of 2021.

The implementation of IoT powered warehouse management system offers several extraordinary benefits that will help the logistics sector to achieve this feat. Some of these benefits that have helped in the creation of smart warehouses with a connected ecosystem are:

1) Reduction in labor cost and establishment of workers’ safety:

Warehouses spend a lot of their budget on labor. According to May 2018 specific study, a typical warehouse with 100 non-supervisory employees can spend as much as $3.7 million in labor expenses. This amounts to a total of 65% of warehouse facilities’ operating budgets.

IoT has allowed the development of smart infrastructures for warehouses such as automated guided vehicles and a workforce of autonomous material handling robots. These infrastructures are eliminating manual intervention wherever possible and are revolutionizing the operations in a warehouse.

The connected IoT wireframe in a warehouse allows robots to handle on-floor movements of bulky items. Robots and automated forklifts can be remotely commanded to pick or place a pallet/item and transport it from one location to another. The connected network of these machines avoid collisions among themselves and help them improve the flow of cargo in the storage facility.

This boosts the productivity and mobility in the warehouse and also reduce the use of manual labor for heavy load-carrying operations. In 2016, out of every 100 full-time workers in the warehouse/storage industry, 5 were injured while working. Hence, IoT along with reducing labor cost also lowers the chance of work injury to the workers.

2) Optimized space utilization and goods allocation:

The average size of a storage facility has increased to 180,000 square feet in comparison to 2000-2006 average size of 127,000 square feet. Still, more than 43% of warehouses owners face a challenge to properly manage space in their facility.

Moreover, around 46% of distribution centers and warehouses handle a mixture of pallets, cases, and split cases that are subsequently arranged in shelves, racks, and partitions. Goods in such a mixture can often be misplaced or lost.

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Internet of Things based warehouse management systems help the warehouse managers to optimally utilize the space in their facility to accommodate the maximum amount of goods. The WMS helps a manager to keep an eye on the entry and exit of goods and thus calculate the free space in the facility. They can hence choose the best layout and configuration for their warehouse to easily find vacant spots where the goods can be allocated.

WMS gives managers unparalleled visibility into their inventory and helps them to manage their stock levels. They can manage the right quantity of products at the right place & time and schedule the next batch of arriving products accordingly. As the details of products/goods are stored in the WMS system, the items are never lost and can be easily located in a large stock.

3) Quality maintenance of equipment and goods:

Temperature and other environmental parameters play a crucial role in maintaining the quality of food items. Food industry thus develops cold storages to increase the life of their products and maintain their freshness for a long time. By using various temperature sensors in the cold storage, the facility can monitor its temperature at all times.

The real-time data sharing of the WMS system share temperature readings with the authorities, allowing them to take preventive steps if the temperature drops suddenly. The authorities can even calibrate the WMS system to only receive the change of state data to avoid getting unnecessary alerts.

This helps the food industry to maintain the quality of their food items and meet associated regulatory compliance. In a similar manner, the performance and condition of the equipment can be distantly monitored through performance measuring sensors.

4) Global visibility in supply chain and logistics:

Around 32% of warehouses use an inadequate information support system. This prevents them to gain comprehensive information about markets’ supply and demand. IoT advanced analytics features create transparency between different levels of the logistics cycle, allowing a warehouse manager to optimize its operations according to the market status.

A company using an IoT based warehouse management system can hence manage scheduling, procurement, and other business operations based on the stock levels in its inventory.


Warehouse management systems with the implementation of IoT are making use of advanced telemetry and analytics to optimize inventory tasks and procedures. The use of AGVs and robots has lowered the need for manual intervention and has optimized space utilization in warehouses.

IoT is improving the speed and accuracy of operations in the warehouses too. The use of IoT sensors is enabling warehouse managers to maintain the quality of their environment sensitive products and provide them unparalleled visibility in logistics and inventory.