AI And Warehouse Management: What Owners And Managers Need To Be Prepared For

Artificial intelligence is no longer relegated to the realm of action movies and futuristic dystopian stories. Every sector of society is being impacted by this technology already, or can soon expect disruption. 

What Is AI?

Simply put, AI is used to solve problems. This technology involves systems and algorithms that can mimic human cognitive functions, like learning, problem-solving, decision-making, and perception. "By using artificial intelligence, companies have the potential to make business more efficient and profitable. But ultimately, the value of artificial intelligence isn't in the systems themselves but in how companies use those systems to assist humans..." explains McKinsey.

The use of AI is growing in almost all industries, including warehouse management. 

How AI Impacts Warehouse Management

AI is making a huge impact on warehouse management as it can enhance efficiency, accuracy, and productivity. Through automated systems, inventory management, order picking, and packing functions can all be streamlined. Just think about Amazon - this American company uses robots for its orders as well as machine learning for chatbots and product recommendations. 
 

South African company, Takealot, recently took a big leap into the world of AI with the implementation of Retail Therapy, powered by Techsys Labs. "The campaign's AI technology also provided personalised product recommendations based on customers' interests, previous engagements, and shopper insights, resulting in increased sales and customer satisfaction," tells BizCommunity.

The Benefits Of Bringing AI Into Warehouses 

When it comes to warehouse management, streamlining operations and improving efficiency are on the wishlist of most warehouse managers. Operations and efficiency can be taken to the next level through the adoption of AI. 
 

AI can analyse data and trends which is a huge benefit for inventory management. By analysing historical data and market trends, AI systems can accurately anticipate customer demand, allowing warehouse managers to optimise stock levels and avoid overstocking or stockouts. 

AI can go further in the realm of logistics. It can ensure that orders are processed in the most efficient way possible, routes are optimised, and therefore improving customer satisfaction. 

One of the biggest benefits of incorporating AI into warehouse management is the reduction of repetitive tasks and the minimisation of human errors. This can prevent many costly mistakes. 

The ROI of AI in warehouse management is further increased by reducing workplace accidents and labour costs, "The rise of automation technologies in warehouses is reducing the need for manual labour and improving efficiency, safety, and reducing the risk of workplace accidents through the automation of tasks like picking and packing," says Motion 2 AI. According to Deloitte's research, a notable 38% of logistics companies are actively implementing autonomous solutions in their operations, freeing up employees to focus on more strategic tasks.

The Challenges That Come With AI In Warehouse Management 
 

Of course, it's not all sunshine and savings when it comes to introducing AI. One of the major drawbacks of AI is job displacement. However, there are also opportunities that come with major shifts. Identifying new roles and responsibilities that align with the AI systems that are being implemented and training workers to fill these roles is an important part of a smooth transition.
 

A big challenge for many warehouses and logistics companies that want to implement AI solutions is data. AI needs a tonne of data to analyse in order to operate efficiently. "Data constraints should be minimised before AI is introduced into the supply chain so that it is easily accessible and integrates as much 'real-time' data as possible into processes and systems," says Logistics IT.
 

AI can also be costly as this technology needs a large amount of bandwidth to power them. In South Africa, this can be further exacerbated by load shedding. Companies that want to incorporate AI and machine learning need to be willing to invest in AI specialists for initial implementation and training, as well as improved bandwidth and off-the-grid electricity solutions.

How To Manage The Implementation Of AI

Many people are opposed to change and distrustful of new technology, especially AI. So, it's essential to manage the transition to AI in warehouses effectively. Businesses can do this by emphasising the opportunities that AI brings (including skills development) and focusing on the integration of human and AI roles. 

Then, as with any new development, it's important to monitor and evaluate. Warehouse managers should define key performance indicators (KPIs) that align with their objectives. Some examples of this include fulfilment rates and inventory accuracy. Regular monitoring and evaluation of the AI against these metrics will provide insights into the effectiveness of the new systems and identify areas for improvement.

The advancement of technology is unstoppable, and it's crucial not to deny the benefits that AI brings to warehouses and logistics companies. However, it is essential to acknowledge and address the challenges that come with AI implementation. Through effective incorporation, businesses can harness the power of AI to optimise warehouse operations and enhance productivity.