Building a Smarter Future with IoT in Warehousing

  • Written by Kaleigh Moore
Building a Smarter Future with IoT in Warehousing

The world is getting “smarter.” We see evidence of that all around us, as everything from smart speakers to smart thermostats is building a network called the Internet of Things (IoT).

The global IoT market should soon eclipse $1.1 trillion with no signs of letting up.

However, the implications for the IoT extend far beyond interacting with smart speakers. In warehousing, IoT can affect every aspect of business. Inventory management can work in real time, with smart devices handling much of the counting.

Automated scanning and packing can decrease a warehouse’s reliance on physical labor. IoT devices can monitor the conditions of warehouse equipment or monitor energy consumption to identify savings opportunities.

IoT works for warehousing because it can thrive in any setting “where technology is deployed,” writes McKinsey. McKinsey estimates the economic value of IoT in factory settings, for example, could be anywhere between $1.4 trillion to $3.3 trillion. Compare that to office use, where the IoT is still useful, but only generates an estimated $500 billion in economic value.

The “smart” warehouses are those embracing a smarter future thanks to the innovations of IoT. Its transformative effects can mean “optimizing operations in manufacturing,” writes McKinsey, “making the various day-to-day management of assets and people more efficient.”

That’s why IoT in industrial, factory, and warehouse usage is especially potent.

But the question isn’t whether IoT offers opportunities to improve. It’s why—and how—warehouses can embrace this smarter future.

Table of Contents

  • Capturing IoT value no matter the business size

  • The role of IoT in warehousing

  • The role of reliable IoT in warehouse management

  • Using the IoT to build a “smarter” future in your warehouse

Capturing IoT value no matter the business size

Maybe it sounds expensive. IoT devices require investments in technology and setup—and a word like “investments” typically translates to high upfront costs.

But implementing IoT also has cost-saving benefits that offer immediate ROI. 

“The aim of IoT is to perform administrative work, i.e., to efficiently manage warehouse data,” notes a report from Sensors. “However, innovation requires additional investment in, for instance, implementation and maintenance.”

However, thanks to the proliferation of IoT devices, there’s been a trickle-down effect in the technology.  A sensor that cost $40 in 2010 might be available for $2 or less now.

While IoT was once the domain of large corporations with enormous tech budgets, IoT devices are now available to businesses of any budget.

IoT innovations in warehouse management are making the efficient management of warehouses much more affordable. With that affordability comes a noticeable improvement in the bottom line for businesses of all sizes.

For 54% of companies that embrace IoT projects, cost savings are the primary revenue driver. 

No doubt some of those cost savings come from saving time and energy otherwise invested into labor. But there are sometimes more tangible benefits for warehouses implementing IoT technology.

For LeakSafe, a UK-based company helping residential and commercial buildings watch out for water leaks, IoT devices became a way to monitor water hazards. 

Water damage is costly: UK insurance companies spend nearly a billion pounds yearly thanks to water leaks. A leak that goes undetected could potentially increase insurance premiums or excesses. And with close monitoring for water leaks, these excesses could be entirely prevented.

Leaksafe integrated NB-IoT devices called WaterComm under kitchen sinks. It’s a 24/7 monitoring system.

If the device gets wet, it pings Leaksafe. Rather than waiting for the visible signs of water damage (or until tenants first spot the damage), IoT devices stand vigilant and remove the role of the tenant almost entirely.

The result for Leaksafe: preventing more extensive water damage, reducing water waste, and helping keep insurance premiums low.

For warehouses with similar risks, the potential cost savings are just as profound. If a warehouse is in a location with high risks of water damage, tools like these can help prevent catastrophic inventory disasters.

Warehouses should also factor in other efficiencies, such as tools to help automate fulfillment. With cheaper IoT devices becoming available—as well as reduced risk of inventory damage and improved efficiency—the investments in IoT make too much sense for warehouse managers to avoid.

Cost savings aren’t merely hypothetical; results like these are reflective on the bottom line.

The more you can integrate your technology into the way you run a warehouse, the better chance you have of optimizing performance. “A company with integrated IT tends to outperform on costs and profit-based performance measures,” writes a report in MIS Quarterly

Does that mean IoT is a magic wand? Not necessarily.

An investment is not a guarantee of results. According to McKinsey, “While the potential economic value of IoT is considerable, capturing it has proved challenging, particularly in B2B settings.”

Warehouse managers who want to build a smarter future shouldn’t merely purchase IoT devices and consider their tasks completed. Smart implementation at key hinge points will drive success.

The role of IoT in warehousing

IoT pays dividends for warehouses that can identify cost savings opportunities. But where exactly are those opportunities, and how can IoT devices provide practical applications with a demonstrable effect on the bottom line?

There’s no one answer.

Depending on the conditions at your warehouse, you may have countless opportunities to optimize. Or there may be a select few where IoT devices can have the most dramatic impact.

Here are a few areas to consider:

1. Inventory management

Constantly sending out personnel to double-check inventory, log it into a clipboard or tablet, and report back—it’s a lot of manual work.

An IoT device or software such as Veeqo, makes it possible to track inventory in real time.

This would also prevent overstocking and improve overall stock management by feeding inventory data to a centralized dashboard for easy check-ups.

2. Identifying new efficiencies

Companies could benefit from automating their shipping process. As IoT devices gather data from multiple sources—shipping vehicles, warehouses, suppliers, etc.—you can use this information to optimize shipping routes and reduce transit times.

The result is a supply chain with more efficiency, adding up to benefits on the bottom line.

3. Automation and robotics

Driverless forklifts, inventory-transferring robots on the floor—these might have seemed like the stuff of science fiction once upon a time.

But as the IoT devices get smarter, it makes more room for the hardware like warehouse scanners, that can take the load off of human shoulders and transfer it into the metal and plastic hands of machines.

4. Predictive maintenance

As the Leaksafe example demonstrates, one of the best tasks IoT devices can undertake is standing vigilant over potential problems.

Water leakage or security issues can steal millions of dollars of value from a warehouse away in a flash. IoT devices don’t have to take time off as they monitor any potential issues.

5. Energy management

One of the most familiar uses of IoT technology in the home is the smart thermostat.

The device can monitor energy usage and help the homeowner become more efficient with their energy usage. But using similar IoT devices at the warehouse level can have a far more dramatic impact.

Lighting, heating, and cooling systems—these cost money. IoT devices that monitor and optimize their usage can reduce overall costs, especially when working across multiple warehouses

6. Analytics

When you gather information manually, it essentially creates two tasks.

First, you have to record the inventory information you need on-site.

Second, you need to gather this information and sort it for analysis.

IoT devices, however, automatically upload their data to your central hub or dashboard. You’re free to focus on big-picture planning, using this data to make big-picture decisions like renting or buying or deciding how to lay out your warehouse.

7. Supply chain visibility

IoT devices in trucks, delivery vehicles, and all along the supply chain give you a holistic view of your routes.

You can watch shipments in real-time, keep an eye peeled for delays, or even let IoT devices warn you about possible delays before they pop up.

8. Waste management

This is especially useful for agricultural warehouses, where handling waste can make or break the average bottom line.

IoT can keep an eye on conditions for water storage, for example, and help prevent issues with pollutants going into the local water supply.

9. Wearables

Wearable IoT devices can be great for warehouse staff. They help you track inefficiencies within the warehouse due to long travel times or excess manual work for tasks you could otherwise automate.

The role of reliable IoT in warehouse management

IoT devices lead to tangible results—as long as you know what problems you need to solve.

For example, the USMC (U.S. Marine Corps) logistics team was looking for a way to handle its warehouse facilities. Their specific problem: coordinating the arrival and departure of trucks on the loading docks. Coordinating these arrivals and departures was cutting into the efficiency of their warehouses.

They turned to IoT devices.

Motion sensors, for example, would detect incoming and outgoing trucks—updating USMC about the current status of its warehouse bay doors.

Variables from humidity and weather to inventory status all fed through USMC’s central dashboard. The result was better coordination, more efficient management, and a warehouse running like a well-oiled machine.

Using the IoT to build a “smarter” future in your warehouse

When IoT devices feed information into a live dashboard, it feels like you’ve installed a new brain in your warehouse. And that’s really what the effect can be.

IoT devices can create ongoing measurement for variables in your analytics, helping you to identify problems and inefficiencies—or even weak links in the supply chain.

As you correct these problems, the result is a “smarter” warehouse. Almost every aspect of your inventory management becomes measurable.

And since issues like damage or maintenance prevention can help reduce costs, it’s not just an investment in getting smarter. It’s just a plain smart investment.

For advanced automated inventory and warehouse software with powerful analytics and forecasting, sign-up to Veeqo for free, and get integrations with multiple marketplaces and carriers.

About the author


Written by Kaleigh Moore

Ecommerce Writer

Kaleigh is an expert on ecommerce, retail, and SaaS. She previously owned an ecommerce business, and now writes for the likes of Shopify, Forbes, and Vogue Business.

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