Warehouse industry and AI — an outlook on the Indian market
The world has changed dramatically since The Great Lockdown owing to the current novel coronavirus pandemic that started in 2020. A rare disaster, a coronavirus pandemic, has resulted in a tragically large number of human lives being lost and businesses suffering heavily. The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes. Sure the economy, particularly the Indian economy, was hit badly but evidently it is coming back up on its feet. The data, surveys and forecasting by some of the renowned world agencies and forums clearly show that.
With this optimistic mindset and my nascent interest in the Warehouse sector, I wanted to visit an exhibition on the same and get some insights from the industry leaders and gauge their level of optimism on the future of the industry. I decided to visit the India Warehousing Show 2021 held in Delhi 16-18 Dec 2021.
India Warehousing Show is the epicenter of warehousing & logistics solutions in Asia. It is a global event on warehousing, material handling, storage, logistics & supply chain held annually.
A little about me and my organization!
I am a data scientist at Alten Calsoft Labs, a design led Digital Experience, Product Innovation, Solutions, and Consulting offerings leader. With a global presence and an experience of nearly 15 years, Labs has proven to be instrumental in this age of digital transformation for many enterprise-grade, SME and startup organizations.
I have nearly 4 years of industry experience across different domains such as ed-tech, fin-tech, manufacturing, and supply chain. I love engineering solutions for our partners and clients which helps then generate value with the intelligence acquired by their data leveraging deep learning, machine learning, artificial intelligence and big data technologies.
Why did I opt to go in this particular event?
Given that the warehouse industry is quite on a boom, thanks to the ever growing e-commerce and FMCG sector, it has got the due traction it deserved. Due to globalization, great internet proliferation and the subsequent emergence of tech giants like Amazon, Flipkart, Myntra, Grofers, a lot of items are now seamlessly traveling and reaching their customers in time which was unthinkable before. With more advancements, the services are persistently improving and thus there is a lot of scope in the warehouse sector particularly when its automation arm is maturing. Here are some of the amazing stats that may intrigue you further if you are a technically oriented person:
- 80% of the warehousing companies have no automation (Source).
- Majority of warehouse and operations expect their overall spending on material handling equipment and automation to increase over the next few years (Source).
- On average, retail inventory is accurate only 63% of the time (Source).
- Pick-to-Light systems can improve pick rate productivity by 30–50% (Source).
- Pick-to-Light, RFID, and Pick-to-Voice technologies reduce picking error rates by 67% compared to manual paper-and-pen methods (Source).
- Automated Storage and Retrieval Systems (AS/RS) have the potential to increase order accuracy levels to above 99.99% (Source).
- The diversity that exists in the WMS (Warehouse Management System) and WCS (Warehouse Control Software) is quite narrow and it is expected that the investment in this space to multiply manifold.
These points were enough to interest me. With more than 259 exhibitors in the last event held in year 2019, it was assumed to be a grander affair, having even better participation because of the manufacturing sector leading the recovery of the Indian economy post pandemic.
How is the sector organized? And more…
The warehousing and automation sector can be broken down into the following types of companies:
- Racks and Shelves solution providers
- Material Handling and Cold Storage
- Automation and Auto Tech industries
- IT solution Providers
- Consulting and Brokerage companies
- Logistics
There are few other types of categories of businesses as well but generally they can be identified into one of these categories.
There are a lot of factor that differentiates these companies like type of machines used, quantity of production, types of materials they produce and use, industries they cater to, amount of workforce, the level of technology they use, etc. But even with all these differentiators most of the Indian firms have one thing in common — owing to huge competition particularly amongst the SMEs (Small & Medium scale enterprises) and early stage companies, cost cutting is quite ubiquitous and rampant particularly with respect to technology and its adoption. Most of the Indian companies are quite skeptical and hesitant to adopt any new technology. Its is not due to the mistrust on technology but due to the heavy pricing of this technology.
Besides, most of the Indian companies can also be said to be still stuck in Industry 2.0 era. However during the brief conversation that I had with most of the exhibitors, it was clear that they are eager to adopting technology and at least getting to the Industry 3.0 part quickly if not immediately. Few companies which are already there in this space already have the upper hand and their solution also seems a little more mature (remember that I am an amateur in this space and I am just judging them with my nascent knowledge and interest). All of these companies know the potential that Industry 4.0 hold and thus are quite eager to make some progress there. This is where I was trying to persuade the executives also focus their attention on and honestly I got an overwhelming response. It must also be mentioned that companies in most of the developed economies are already migrating to the Industry 5.0 space however, since Indian companies are far from this concept right now, it will require a great determination and grit to place themselves in that league.
Latest advancements!
As I’ve already mentioned, most of the MNC’s and companies in developed economies are already migrating toward the adoption of Industry 5.0 paradigm, if they haven’t already adopted as yet. Think of Industry 5.0 like having robots working alongside humans. By putting humans back to the industrial production with collaborative robots, workers will be upskilled to provide value added task in production, leading to mass customization for customers. Evidently that seems elusive for the Indian firms.
Mobile robotics market are also seeing a rapid growth. Despite the global economic uncertainty at the moment, e-commerce statistics project that this industry will keep growing. This opens door for the Universal Fleet Management System (FMS) for mobile robots.
Most the technological advancements are lately more inclined towards e-commerce space with all the big store players also planning to go online. In fact, during my stay on the show this fact was conspicuous in the demonstrations. The robots on display clearly showed the eagerness and willingness of the Indian market to adopt this kind of technology. However, one thing that was clearly neglected was “Identifying the power of data” in order to help the company stand out in the process.
Power of Data…
Once the sensors are installed, data can be harvested from any required level. It depends on entrepreneurs to have an vision and harness the power of this data. In the remaining sections I am going to focus purely on the need to store the data, the power that one can harness with the help of this data and how it can help a company to stand out against their competitors.
- But what is data and how exactly is it generated?
Actually, data could be anything when information is represented in a form which is understood by the computers. As one understands, the sensors and actuators works on electrical signals either converting the ambient readings to digital signals or the other way round. Information can be recorded and this data which is generated in the process is known as operational data.
For example, the speed of the motor at a particular instance, the temperature in the vault, the flow of liquid in a tube or pressure in the can. It depends on the sensor we are reading and the value that we wish to record. - What do we do with this data?
With so much data being generated from the sensors and devices, it is vital to realize which data will be more useful than the others and which ones we need to store. This is because storing the data has some cost associated with it. We can either choose to store this data on premises or someone on the cloud depending the sensitivity of the data, cost, size and many other transactional parameters.
Alternatively, there are solution which can be fed this real-time solution but again for that a preliminary requirement most likely will be to store some amount of data for training proposes as it represents the real world transactional data. - How can we draw intelligence from this data?
Data is the new science. The historical data can than be leveraged by the data science folks to analyze, find out some patterns, apply statistical modelling and use it for predictive and prescriptive analytics.
A lot of things can be harvested from this like predicting the time to fault for a specific component, automatically identifying the wrecked component, classifying items and tagging goods, implementing the vision technologies and so on. In fact, this is just the periphery of its potential and the matter of fact is that this is the data that guides us in our discovery of the unknown. It hold unimaginable potential even something which hasn’t been imagined as yet. It help us in tailoring the solution for a specific use case. - Role of Artificial Intelligence and Machine Learning
With the assistance of Machine learning the patterns in supply chain data are often discovered by counting on algorithms which may quickly pinpoint the foremost influential factors. Its algorithm and the companies using this technology are capable of analyzing large, diverse data sets fast, improving demand forecasting accuracy.
The digitization of logistic planning through machine learning can help to predict unforeseen circumstances, which can further reduce the chances of any mishap happening during the delivery of goods. Machine learning replaces the complicated steps of planning and scheduling, working with more accuracy and efficiency, thus streamlining the processes efficiently.
“Without data you are just another person with an opinion.”
— W. Edwards Deming
- And what are the benefits of this intelligence?
— Increase overall efficiency
— Reduce labor intensity
— Automation of a lot of mundane jobs
— Reduction of the overall cost of operation
Conclusion
These modern technologies like AI and Machine Learning aids in bringing truckloads of data, which the warehousing industry should be or has been capturing data for years.
This sudden and rapid growth of digitization and transformation is making more and more companies to add artificial intelligence (AI) and Machine Learning to their supply chain in order to maximize their resources by reducing the time and money spent on the operational and non-operational activities.
Companies face a huge pressure be it manufacturing, energy, or transportation to adopt AI and machine learning to help improve efficiencies in operations, enhance business decisions through futuristic systems. These technologies can also help the warehousing players to provide an opportunity for different levels of optimization in manufacturing, logistics, warehousing and last-mile delivery with the high set-up costs deterring early adoption in logistics.
It also helps the consumers to have their goods delivered in a more customized fashion and with better quality. It helps to create a platform and interface which makes management easier than ever, helping a business to grow in better ways.
It should also be noted that the future wars in the advancement of the technology between different companies, not just the warehousing industry but others as well, will be on the data front — how much intelligence do we draw and harness from data and how do we apply this intelligence for better decision making.
This article was purely intended to showcasing the potential of AI & ML in the warehousing domain. There are other technologies like Blockchain and Big Data worth checking out. More on that some other time.
If you’d like to share your thoughts please feel free to reach out to me Twitter. Your comments will be highly appreciated. Thanks a lot for staying tuned. Ciao!!
