Warehouse Logistics 101

Warehouses have been around as long as people have been trading and moving goods. Warehouse logistics is a millennia-old task that has undergone changes in the industrial age with forklifts, industrial pallets, and high-bay warehouses. But that’s nothing compared to how digitization, artificial intelligence (AI), and robotics are revolutionizing warehouse logistics today. Find out what modern warehouse logistics is all about.

What Is Warehouse Logistics?

There are different warehouse types for specific storage needs. The type of warehouse is determined by its function in the supply chain. However, the logistics processes themselves in the different warehouses are similar. There is no fundamental difference between the stocking of production goods in a production warehouse and preparing shipments for final delivery in a transit warehouse: the basic tasks and processes are the same and can be defined consistently.

Warehouse logistics is the professional and systematic management of all the processes involved in handling goods in a warehouse. This includes all logistics processes from incoming to outgoing goods. Both inbound logistics and outbound logistics are interfaces to transportation logistics.

Warehouse Logistics Optimization: Tasks and Challenges

Warehouse Planning

Efficient warehousing demands good planning. That is why thorough requirement planning is the first step in warehouse logistics. This planning must address both qualitative and quantitative aspects: What will be stored and what are the specific requirements of the goods? And: How much will be stored and what is the expected inventory turnover rate?

The answers to these questions must be long-term in scope, accounting for potential business growth or demand forecasts. The requirement analysis determines the location and type of warehouse, the size of the warehouse, the staffing requirements, and the technical equipment needed.

Physical Tasks

Physical tasks refer to the movement of goods within the warehouse between goods receipt and goods issue: for example, putaway and (if necessary) relocation, order picking, or distribution.

Warehouse Management

Inventory management, including inventory control, is the central task of warehouse logistics. An important aspect is inventory accuracy: the actual inventory must match the one in the inventory management system to avoid additional costs and accounting problems, and to keep process quality high. Risk management, quality management, and human resource management are also part of warehouse management.

Warehouse Monitoring

To ensure the quality of warehouse processes, they must be monitored continuously. Key Performance Indicators (KPIs) specific to warehouse logistics (warehouse KPIs) are an important controlling tool.

Who Can Benefit from an Effective Warehouse Logistics Process?

Every company manufacturing or trading goods depends on warehouse logistics. Precise logistical processes require complex control and an adequate warehouse logistics infrastructure: in terms of space, technology, and personnel. In e-commerce, there are many smaller players that may be reluctant to take on the risk of running their own warehouse logistics or simply do not have the resources to set up internal logistics solutions. But regardless of size, the question posed by many companies is: Does it make sense to set up internal warehouse logistics?

Warehouse logistics service providers may handle all or part of the warehouse logistics tasks, depending on how many of the warehousing processes a company decides to outsource. The most comprehensive type of outsourcing is fulfillment. In this case, a service partner takes over all warehouse logistics tasks, from goods movement to inventory control, as well as other operations such as order taking, packaging, shipping, and returns management.

Especially smaller online retailers tend to rely on fulfillment services. In e-commerce, this is referred to as e-fulfillment, which is usually technically implemented via IT interfaces between online stores and warehouse logistics systems.

Automated Warehouse Logistics for Industry 4.0

In discussing e-commerce logistics, a key aspect of the present and future of logistics has already been addressed: the digitization of warehouse logistics. Digitization is not a trend; it is a reality.

As the world becomes more interconnected, the global flow of goods continues to grow. E-commerce logistics often means large shipment volumes in small units. This all adds up to a huge logistical effort that can no longer be managed without efficient IT warehouse management systems, networking between warehouse and transport logistics, as well as state-of-the-art warehouse technology. In addition, there is a shortage of personnel in warehouse logistics, which is likely to become even more acute in the future.

In short: automation and digitization are essential for the future viability of warehouse logistics.

Robotics in Warehouses

Robots, e.g. in the form of robotic arms, have been part of industrial manufacturing for more than 60 years. Recent developments in AI and the Internet of Things (IoT) have made robots more versatile and expanded their use in warehouse logistics. For example, automatic learning enables them to navigate better and better and to communicate with shelves and shipping boxes via IoT. All this increases their autonomy.

Initially, warehousing robots usually were just stationary robot grippers or storage and retrieval machines (SRM) that moved along fixed tracks on warehouse shelves and picked goods. Currently, the variety of warehouse robots and sophisticated automated storage and retrieval systems (ASRS) has expanded considerably:

• Assisted picking robots working alongside humans
• Autonomously operating pick and place robots
• Sorting robots
• Packaging robots
• Driverless transportation vehicles, such as autonomous forklifts and pallet trucks
• Autonomous drones

Fully autonomous, robot-supported warehouses with automated transport and storage systems are the final stage of this evolution – already today.

Warehouse Logistics Optimization Requires Automation

The challenges facing warehouse logistics are enormous. Rising labor costs combined with labor shortages cannot be overcome without automation. Moreover, competition for skilled workers is intense. A modern warehouse offers attractive jobs for ambitious employees and thus a competitive advantage.

On the other hand, customers expect fast and effective fulfillment. Here, too, advanced warehouse systems provide support. Robots work around the clock, allowing for more processes per day. Automation not only speeds up processes, it also makes it possible to use warehouse space more efficiently thanks to seamless processes. This saves space and reduces rental costs.

Last but not least, there is the overarching goal of sustainability. Efficient processes save resources. A process-optimized warehouse, like DHL Freight’s Terminal for the Future, makes a significant contribution to achieving sustainability goals.

International managers feel the same way, as a recent survey of more than 300 international managers by Norwegian warehouse technology provider AutoStore indicates:

• 20% consider labor costs for warehouse logistics to be the biggest challenge.
• 61% have significantly or completely automated their warehouse logistics.
• 91% regard the use of space as a business priority.
• Increasing energy efficiency is the top sustainability goal for 37% of respondents. 30% want to reduce their warehouse‘s carbon footprint.