Air cargo industry turns to smart warehouses

Published: Monday, May 14, 2018

A smart warehouse encompasses several facets including working with a multitude of smart devices, streamlining processes, providing employees with better data to make informed decisions and keeping airlines and customers informed.

Warehouses of today are far more than just a facility where stocks are stored for supplies and inventory. Leveraging the latest supply chain technology and the Internet of Things (IoT), a ‘smart warehouse’ can now serve as a hub to boost efficiency and speed throughout the entire supply chain.

From wearables on workers to sensors and smart equipment, internet-enabled devices and technology can profoundly change logistics management.

With the advent of e-Commerce consumers are spoilt for choice and expect goods to be delivered quickly. Even die-hard traditional stores like IKEA have embraced the e-Commerce revolution by making their goods available online.
This shift in culture has increased expectations for faster delivery through air cargo and driving a lot of innovations in the industry. In the competitive marketplace, this increased demand puts pressure on the supply chain to reduce cycle times.

Many airlines have embraced e-Commerce and, like Amazon, are radically changing warehouses and processing using IoT, digital devices and smarter processes to deliver goods quicker.
e-Commerce driven small parcels require swifter delivery to the consignee which requires more efficient handling in the warehouse. A larger proportion of online purchases will make the shipment size smaller, but it also increases the frequency of shipments.

As the volume of small parcels increases, warehouse operators need to improve the picking and processing of items by using smarter means to process them swiftly from the warehouse to delivery. As small parcels tend to create a small shipment size, there are greater risks for shipments to be misallocated.

A smarter warehouse uses better picking lanes, wearable devices, drones and better integration with machines to help to process shipments faster and more accurately. Thus parcels will drive a new evolution and operators have to proactively position them to reap the benefits of the parcel boom.

Additionally, investing in IoT or hand-held devices reduce manual labor to a considerable level, increase speed and shipping accuracy and offer retailers an opportunity to obtain unparalleled transparency into supply chains and inventory.

Global information technology company Unisys recently predicted the rise of an even smarter warehouse and new strategic alliances that will transform the Asia Pacific Cargo Industry by 2020, while IoT and voice AI enabled smart devices and systems, warehouse drones and strategic alliances between airlines and distributors will be key to the air freight industry capitalizing on the e-commerce market.
To further discuss Unisys’s 2020 prediction, we got in touch via email with Unisys’s Asia Pacific Logistics’ Solutions Director Niranjan Navaratnarajah and with David Christmas, CEO Middle East, Russia and Turkey and Head of Transport of DHL Supply Chain.

Critical traits

Warehousing is no longer an unsophisticated business. Operators need to embrace technology and understand it. An intelligent warehouse features three critical traits—visibility, mobility and flexibility. Technology, ultimately, is the means to those ends.

DHL’s Christmas, said, “The potential of automation in logistics is enormous. According to a research, around 80 percent of warehouses currently have no supporting automation whatsoever, but DHL estimates that robotics implementation will be the norm in the industry in less than five years. Automation in logistics will be further propelled by factors such as globalization, increasing e-commerce volumes and changing consumer expectations, as well as labor shortages in logistics. DHL considers warehousing to be the most relevant application field for recent advances in robotics.”

Unisys’ Navaratnarajah, notes, “Air Cargo needs to move from the manufacturer/grower to the consumer spends majority of time on the ground – most of it in warehouses. Some consolidators also use warehouses for storage. But this is very inefficient use of expensive real estate. Therefore warehouse owners and managers need to find ways to process goods through the warehouse as quickly as possible.”

Saving money and energy

Automatic warehouses save energy in many ways; from efficient, lighter engines in the AS/RS systems, intelligent motion calculations and regenerative power supplies to the simplest of all energy savings method: turning off the lights.

However, the principle of energy is neither created nor destroyed – it is transformed. When an automated machine is in motion, the kinetic energy created from this movement must go somewhere when the machine slows down.
“It saves money by reducing time when goods are just sitting in the warehouse and reducing the risk of items being lost or misplaced. And generates revenue by enabling a freight company to be able to move more goods through the warehouse in a given time,” says Navaratnarajah.

Rise of robots and co-bots

According to DHL, collaborative robots equipped with high-resolution cameras, pressure sensors and self-learning capabilities will soon assist warehouse workers with tasks such as picking, packing, and sorting of items.
Collaborative robots can also be redistributed globally to respond to changing peak seasons or complete replenishment and cleaning tasks overnight.

“DHL is currently testing collaborative robots all over the globe to evaluate where they may best be implemented. Pilots already completed include programs with Fetch Robots, Baxter and Sawyer and EffiBOT. Such robots can help with co-packing and value-added tasks, such as assembly, kitting, packaging and pre-retail services. “EffiBOT follows workers through the warehouse and completes most of the physical tasks. Robotic cargo unloading, in which a robot scans the boxes in a container to determine and carry out the optimal unloading sequence, although not yet implemented, may also become more feasible and cost-effective as the technology improves,” said Christmas.
Advances in robotics have the potential to dramatically improve efficiency in logistics, fill labor shortages, and support workers, allowing them to focus on less strenuous and more rewarding tasks.
“Yes, but it will only supplement and not totally control it. The digital innovations of a ‘smart warehouse’ help the workforce to process goods more quickly. A smart warehouse encompasses several facets including working with a multitude of smart devices, streamlining processes, providing employees with better data to make informed decisions and keep airlines and customers informed. Warehouse need to process more goods faster to optimize the return on real estate,” responds Navaratnarajah.

A key to air freight industry

Warehouses that do not embrace the digital evolution will feature a lack of mobile devices, legacy systems and processes, heavy dependency on paper processes that are labor intensive and slow, lost goods, delays by customs inspections and a lack of communications to customers.

But the use of digital economy and IoT, supply chain integration, drones and mobility will help to process goods more quickly, keeping the customer informed in delivering goods expeditiously.
Traditionally a specialist with a lot of experience and strong ‘gut feel’ has led air cargo processing to help them spot challenges, bottle necks and address issues.

However, there is very low take up of warehouse jobs in the younger workforce. Training cycles are long and the attrition is high. The traditional experts are often ties to lengthy legacy processes.
“Embracing digital solutions is essential to meet this challenge for warehouses in the future. Smarter devices such as IoT, Voice enabled AI, simplified processes are at the very center of this evolution and will help attract more workforce and shorter training cycles. The workers will also be augmented by richer analytics to continually improve services for customers. Thus, the evolution driven by such smart technologies is pivotal to the transformation of the warehouse,” says Navaratnarajah.

Generating higher ROI

A typical task of a warehouse periodically takes physical check of the storage bins/locations on the recorded inventory and to match the actual inventory, which will help to match goods. A worker taking a note content by visiting all locations does this.

If the storage bins are up high it is hard to read bar codes or physically view the actual goods. Such a process is also open to human errors. As it is a lengthy process it is typically only done weekly or fortnightly. Instead, drones and shipments with beacons and blue tooth enabled devices, drones can fly at different levels within the warehouse to easily capture the data about shipment locations in a much shorter time so they can be done more frequently.

There drones can also be used to identify shipments that are in distress by assessing the temperature and communicate to alert worker if corrective action needs to be taken for the distressed shipment or a live animal.
IoT is the key to the future of smart warehouses. Traditional warehouses are process driven, and highly dependent on people-based process that increase demand at peak times. Any growth requires additional crews.
In contrast, IoT will automate many repetitive tasks, and high frequency tasks, like inventory checks to increase accuracy and real time knowledge of goods location. Devices such as drones will be able to perform smart tasks like scanning shipments for signs of distress and trigger action to better manage the well-being of perishable goods or livestock.

The distribution facility

The use of multiple channels in the warehouse to process diverse types of shipments is essential in the modern age to drive towards a smarter warehouse.

IoTs, drones, wearable devices, integration, voice commands are some of the channels that will drive the change and operators have to take it into cognizance in the quest to change.
However, to be truly effective these channels must feed into each other to provide a single view and experience – rather than act as separate disparate channels. Development to achieve this will truly drive the new warehouse of the future.

Airline operators can draw a lot of inferences from data and pick valuable insights from machine learning.
Data is invaluable to identify trends on how resources should be deployed to manage peaks and troughs. Data can also provide a lot of insights and interpretations to suggest areas of process impro-vements, bottle necks, area of integration, goods flows and directions, customer connectivity, customer serving performance, truck handling etc.
It can also predict what equipment required and help optimize equipment utilization to save capital costs.
“This is especially important for livestock and perishable cargo where the environmental conditions must be managed. Using insights from data warehouses can improve peaks and troughs, understand customer behavior, predict shipment arrivals and provide a customer a better experience,” says Navaratnarajah.

Integral warehouse role

Air cargo is generally a people’s business driven and operated by experts and sometimes ‘legends’ in the warehouse.
Most operators rely on these so-called legends to drive the business as well as train the new workforce based on legacy practices. As a result change is low or slow. It is also curtailed lack of investment.
Many leaders speak about change but have not yet implemented the digital investments to make it happen.
Unisys believes as a solution provider it has a role to play in sharing our thought leadership with such operators and jointly exploring methodology to introduce these IoT to help operators to adapt these devices to supplement manual activity.

Components of a smart warehouse

A smart warehouse should inform a customer when to hand over the cargo based on analytics; operators use smart devices to accept or locate cargo; machines can communicate data to systems; mobile devices and wearable devices process data in the warehouse and integrates it with airport systems for manifesting and transporting cargo to an aircraft. In addition, users can process data via voice-enabled commands to process tasks in the warehouse. Drones will monitor shipment well-being, optimized goods flow and suggest corrective actions if cargo is in distress.
Conversely for import goods, in addition to processing, deliveries (including delivery to door) will be enhanced via mobility devices with electronic signature on the keypad. Movement of assets (Unit load devices – ULDs) in the warehouse will be managed through beacons and blue tooth enabled devices to track optimum stock levels and the movement of assets. Data will be captured and made available to process goods more quickly and accurately, and further enhanced by machine learning to continuously improve processes, according to experts at Unisys.