Creating the Warehouse of the Future

While no one can predict the future, many of the oft-referenced elements of the “warehouse of the future”– such as urbanization, automation, Internet of Things (IoT) connectivity and artificial intelligence (AI) – are already becoming reality for today's facility managers.
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Creating the Warehouse of the Future

While no one can predict the future, many of the oft-referenced elements of the “warehouse of the future”– such as urbanization, automation, Internet of Things (IoT) connectivity and artificial intelligence (AI) – are already becoming reality today.

As e-commerce becomes the societal norm, warehouses and distribution centers of the future will continue to move closer to the customers they service and be configured to support same-day delivery or customer pickup through some combination of autonomous vehicles, robotic picking and loading, drones and mobile pickup points. Big Data (via IoT and AI) will impact what and how products are stored, and even manufactured.

Trends pointing to 2030 warehouse location and features

According to Facility Executive magazine, small- and mid-sized buildings are now becoming the industry norm, quoting research from JLL. Roughly 60% of new warehouse development falls into the 50,000- to 250,000-square-foot range. That said, JLL and Facility Executive predict the following trends:

  • Growing clear heights: “To optimize warehouse utilization, yesterday’s 24- to 26-foot ceiling height has risen to the 26- to 40-foot range today. One reason is that automated picking technology can easily reach even the highest shelves.”
  • Sustainability: “Solar panels, LED lighting, cool-roof systems, thermal glass, clerestory windows and other new green materials and innovations are leading warehouses into a new age.” Industrial fans were not mentioned, but they should also be part of this trend.

Site Selection magazine predicts these facilities are imagined as flexible retrofits of aging and obsolete warehouses: “They are a practical response to the rapid shift in supply-chain dynamics due to digital connectivity and new consumer demands, shifting from 8-hour, 5-day-a-week operating shifts to 24/7, lights-out automation. Today’s distribution centers become tomorrow’s factories.”

More consumers will be ordering products online and expect same-day delivery. But simultaneously, cities will be more congested. SupplyChain247.com predicts that there will likely be a “shared service model” where “multiple sellers share space in the same facility with products from these sellers consolidated for delivery.” Urban warehouses that produce products, such as 3D printing, as well as store and ship them, often with same-day delivery. Technology will play a significant role in delivering the speed and efficiency required and automating the movement of products from large regional warehouses to urban distribution centers.

Another coming trend may be “on-demand” warehousing. As defined in a recent report from CBRE, “On-Demand Warehousing: Opportunity in a Period of Uncertainty,” on-demand warehousing is characterized by short-term leases for relatively small size segments. Uncertainty due to the recent coronavirus pandemic and its lingering effects may drive this approach to become more prevalent in the future, although they note, it still represents a “narrow niche within the industrial real estate sector.”

The role of IoT and AI

In any foreseeable future, the roles of the Internet of Things (IoT) and artificial intelligence (AI) will continue to grow. Not only do they help distribution centers better predict demand and reduce inventory costs, they enhance safety and productivity and can decrease energy costs.

The information provided by IoT can help managers uncover potential challenges and proactively identify solutions, driving behavioral and process changes. IoT is particularly adept at monitoring and communication, which can have a significant impact on organizational safety (as well as boosting efficiency and productivity). In fact, 93% of manufacturers agree that IoT benefits exceed risks, as reported in an Industry Week study.

Loading dock equipment enhanced with IoT capabilities can give facilities a more advanced look at what’s happening during logistics operations. Leading-edge logistics management software provides managers with an intuitive loading dock dashboard that allows them to review current trends and historical data. With those insights, they can make more data-driven decisions and identify additional opportunities for improvement.

Long-term insights are not the only benefit, however. By providing real-time information, the system brings a new level of clarity, order, and productivity to current operations for customers, material handling employees and the entire operation.

This instant information can be accessed through all enabled screens, tablets on forklifts, and other connected mobile devices. Among other things, it shows which docks are open, which are in use, how long loading or unloading has been going on, when trailers are held in detention waiting for a dock position, and other critical details. Using this information, managers can coordinate appointments, monitor dwell times and help keep docks fully utilized.

IoT can also improve safety. Instead of reacting to accidents, companies are increasingly looking to proactively address potential safety issues with improved training and safety-oriented equipment.

While IoT provides a real-time and archival look at massive amounts of data in a warehouse, AI is what turns that data into insights that can improve operations and enhance safety in the future. Because AI learns and reacts to current and historical trends, it can quickly develop forecast models on the fly and adapt to changing patterns.

Warehouses and DCs that have good demand information won’t need a huge inventory; AI will help managers track and predict orders to ensure that products will remain properly stocked.

Getting ready now

The future is coming. Warehouse and distribution center managers that aren’t looking into the solutions hitting market today are at risk of falling behind the competition tomorrow. To learn more about the future of warehouses and distribution centers, download our essential guide!

The Essential Guide: Warehouses and Distribution Centers

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