How IoT is Setting New Benchmarks in Warehouse Productivity
A hyper-competitive, billion dollar industry that plays for keeps. Find out how IoT location-based analytics are quickly becoming the differentiator in the race to improve efficiency and cut costs in the warehousing industry.
Location location location. What was once an overused real estate cliche is now running through the minds of every major business leader in the industrial world. That’s because for industries like manufacturing and warehousing, the more data we have about the location of an asset or worker, the better we can optimize performance, reduce operating costs and outperform the competition.
Advances in the Internet of Things, or more precisely, location-based services, is making this data collection and analysis more accessible everyday with low cost, high-performing technology solutions, like Bluetooth LE. Businesses of all sizes are now adopting location-based IoT analytics at ever faster rates, raising the stakes across industries.
The winners will be those able to transform their business to succeed in a digital age driven by increasing competition and consumer expectations – and ruled by data.
We are going to explore some examples of how location-based services can help warehouses improve productivity, promote greater safety and security, and develop better decision makers to bring it all together.
Productivity and Labor Efficiency
On average, labor costs make up around 65% of warehouse facilities’ operating budgets. Therefore, optimizing workforce productivity is at the top of every warehouse agenda.
Common KPIs used to evaluate labor productivity include:
Item fill rate: How many orders can a picker fill per hour?
Order accuracy: Number of items correctly scanned and added to each order
Downtime: How much time does a worker spend between orders?
Processing time: Time it takes for inbound freight to be handled and stored?
Measuring these KPIs is straightforward in many modern warehouses. Determining the reason for the result is more difficult to conclude. What information do we have on why it takes 90 minutes to handle and store freight rather than 60? Or why it takes the same worker 5 minutes in the morning to finish and begin a new order and 10 minutes in the afternoon?
Traditional methods of determining the cause of these results are difficult and time-consuming to consistently gather, analyze and store. They have resulted in a lot of “check and guess” strategies that lack transparency of the root cause.
IoT Analytics, powered by Bluetooth LE, remove the guesswork for managers searching for the how of labor productivity improvement by capturing data that was previously too complex or costly to measure. With greater transparency in operations, inefficiencies become easier to identify and improve.
Read more: What is IoT? Introduction to Internet of Things in Operational Environments
One of our customers, a leading logistics solutions provider and Fortune 2000 company, is integrating its warehouse management system with Kontakt.io’s location tracking solution with an expected 20% increase in worker route efficiency.
With the help of IoT analytics, the location of movable assets and workers can be monitored in real-time to answer new questions, like:
Picker route optimization
– Are pickers taking the optimal picking routes for each order?
– Which areas of the warehouse experience the highest traffic flow?
– Are forklifts being operated efficiently?
Overall time allocation
– How long do workers spend on non-value adding activities per day?
– Where do delays most frequently occur?
– Is the warehouse layout optimized for overall workflows?
– Is warehouse space sufficiently allocated?
Automating Safety and Security
Another area where location-based services push the status quo is safety and security.
Workplace injuries are reported at a rate of 5 for every 100 full-time employees in warehousing and storage. Preventive measures for mitigating workplace injuries involve educating and enforcing safety codes for all workers, particularly those engaged in hazardous activities.
But when accidents happen, as they inevitably do, a system for alerting and logging incidents to help predict accidents in the future is becoming the standard.
For example, each worker is assigned a BLE device integrated with a panic button. This allows them to immediately signal on-site management for assistance in real-time from anywhere in the warehouse. Each time the button is pressed, the instance is recorded and analyzed to identify areas of high risk.
Now instead of mulling over accident reports and trying to determine how you can improve the safety of your warehouse, you can manage accident reports instantly through a cloud-based dashboard, identify recurring patterns of danger, and begin to tackle new questions like:
– Where are incidents occurring most frequently?
– Are relevant stakeholders notified immediately when an incident occurs?
– Are my workers arriving to work on time?
– Are they taking their allocated breaks?
– Are my workers all accounted for in the event of an emergency?
Developing Effective Managers
The effectiveness of front line managers is a crucial aspect of warehouse efficiency. They should exemplify the culture of a workplace for the workers under their leadership. Their behavior and actions directly affect worker morale, workflow productivity, as well as the ability to attract more qualified employees.
They benefit from the increased access to actionable data. Information on the state of operations can empower them to make more informed decisions, on-the-fly, that help the warehouse reach its targets.
That’s not to say that increased access to data will turn a bad into a good or even decent one, but it could turn a good manager into a great one and begin attracting the kind of talent needed to combat the growing decline of qualified workers needed in industry.
Competing with Efficiency
In our whitepaper on the Value of Location Based IoT Data in Warehouse Operations, we pointed out,
“The more efficient a warehouse can operate, the more money it will make and competitive it will become.”
Labor productivity is at the core of warehouse operating efficiency. By ensuring a safer, more productive environment through IoT analytics, warehouses will operate with greater efficiency as they work towards staying afloat in the increasingly competitive digital world.