DATA, ANALYTICS & AI USE CASE

Warehouse Optimization with AI and Data

Optimize the warehouse through an independent perspective and AI, uncovering blind spots, enhancing warehouse efficiency, mitigating accidents, and fostering adaptability among warehouse staff.

The warehouse serves as the central hub for receiving various goods and later redistributing them in an organized manner. Fundamentally, the warehouse is fixed in its dimensions, and optimization can only be achieved through renovation or additional leasing. This makes the warehouse as an object relatively stable. By stability, it is meant that the floor space is defined, as well as the number of entry and exit gates, storage spaces, etc.

Due to the perception that the “warehouse” object is generally stable, there is often an association that the interior of a warehouse is also stable, and optimizations are not necessary. However, this is not the case, as warehouses are influenced by changing goods deliveries, seasonal patterns, new products with increased space requirements, new maximum loads of trucks, or even order picking affected by seasonality.

Challenges in optimizing the warehouse include:

  • Safety considerations, as there must always be some storage space available for emergencies.
  • Lack of willingness to change respectively perceived added value for changes.
  • Uncertainty in meeting shipping and provisioning deadlines.

In this context, various analyses using data and AI can be conducted in the warehouse to determine where meaningful and feasible optimizations are necessary and can add business value. AI can also assist in automatically identifying patterns and learning from them.

Some questions may include:

  • How should I organize my warehouse for seasonal items to minimize the distance to the loading dock? What if I stack pallets on top of each other?
  • How does my warehouse behave when I receive 200 pallets from a one-time lawnmower promotion? Should I reorganize the entire warehouse, lease a new one, or distribute it wherever space is available?
  • Which products do I need to rearrange in the warehouse since they are often shipped together? Including consideration of seasonality.
  • How should I arrange picking items to reduce picking efforts and increase the efficiency of the staff?

Optimizing the warehouse through an independent perspective using data to validate intuition can help uncover blind spots, enhance warehouse efficiency, mitigate accidents and damages, and furthermore, foster adaptability among warehouse staff.

Certain warehouse optimizations can be relatively straightforward since every product entering and leaving the warehouse is scanned and documented. Based on this data, initial analyses can take place. When it comes to determining the right storage locations for products from a new supplier, the warehouse can be virtually mapped with various parameters for all possible storage spaces, and through simulations, the optimal end state with the new goods can be illustrated without manually rearranging the warehouse beforehand. This is highly beneficial for efficiently and minimally responding to external changes.

    Based on the warehouse mapping, not only can the current state be depicted, but additional future scenarios involving new products or other warehouse reconfigurations can be represented relatively quickly and easily on the same comparative basis (costs, process duration, capacity). This makes potential costs and process optimization outcomes directly visible and comparable.

    Transparency in the warehouse

    To gain more transparency in the warehouse and identify relevant products, a T-ABC analysis down to the Bill of Materials (BOM) structure level can be valuable and insightful. Creating transparency in the warehouse helps showcase to the sales organization how materials relate to revenue and identifies areas where materials can be reduced or justifiably moved to an external warehouse. More information on this can be found at https://log-hub.com/blog-maximizing-warehouse-efficiency-abcd-analysis/.

    Contact us

    Sandro Breandle, Chief data and analytics officer in Log-hub AG

    Chief Data and Analytics Officer

    Sandro Brändle

    Have a question about our Data, Analytics & AI Consulting Services? You can contact our CDAO directly.

    Schwandweg 5, Schindellegi

    Switzerland 8834

    Tel: +381 60 358 52 83

    support@log-hub.com

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