Transforming the old ecosystem of industrial warehouses

Transforming the old ecosystem of industrial warehouses

Technologies like autonomous robots, smart sensors, and deep learning have made Amazon’s warehouses the best in the world. Most Nordic industrial warehouses would require a giant leap to get there, with many still dependent on desktop computers, printouts, and employee experience.

Luckily, there is a large untapped potential between the current state and the best-in-class. In this article, we will describe the operations of an industrial warehouse and the digital solutions that can improve each step in the process.

Today’s industrial warehouse operations

An industrial warehouse operates in the B2B segment or as a support function a core business, in contrast to retail warehouses that ship goods directly to the consumer. They are usually found in heavy industries like energy, construction, and infrastructure.

Industrial warehouses typically face larger complexity than retail warehouses, with more variations in item size and weight.

In addition, they need to prioritize more than a retail warehouse, where items are usually shipped to consumers on a first-come-first-served basis. Take the example of a construction company: if a large pipe is the only thing left to complete a structure, it will need to be prioritized above anything else.

This process map below from a Cognizant assessment shows the warehouse processes of at a large Norwegian oil service company. The complexity shown is typical for warehouses that cater to industrial needs.

The processes of an industrial warehouse: challenges, solutions and benefits

A typical industrial warehouse’s operations consist of four main steps: pre-receiving, receiving, storage and lastly picking and shipping. Below is a description of each step with its challenges, proposed solutions and most importantly, the benefits of these solutions:

In addition to the use cases mentioned above, all the solutions will increase process efficiency drastically and reduce costs through better end-to-end planning. Furthermore, the solutions can improve project progress through reducing loss of effort, by avoiding delays and returns.

Importantly, each of the solutions can be implemented independently to reap the respective benefits above. However, having an integrated system covering the full process from pre-receiving to shipping could create large synergies and deliver even more value, as everything related to warehouse operations would be found in one solution.

Want to know how digitalization can reduce the cost of offshore wind? Take a look at this article;  Digitalization as an enabler of cost reductions within offshore wind.