In recent years, the demand for efficiency in logistics processes has become more and more compelling. The main factors that led to this situation are, on one hand, the growth of cargo volumes handled and, on the other one, the increasingly higher standards of cost-effectiveness and service quality.
The demand is driven by the e-commerce boom, which studies of the US market indicate generates a gain of between $12 and $20 for every $100 in online spending, as logistics operators explore new solutions to manage warehouse uptime. These may result from the application of lean models and, in concrete terms, from a stronger digitalization.
This way, process automation and the application of Industry 4.0 to intralogistics guarantee a higher productivity of up to 70%. On the other hand, these elements allow to reduce significant fixed costs and optimize the use of resource management. Some key factors make it possible to improve the efficiency of logistics processes and, at the same time, reduce costs.
TThe correct management of assets is the first area where action should be taken to improve performance. It suffices to think that handling activities – such as picking – can impact up to 55% on the total costs of warehouse performance.
Low efficiency in these activities produces:
An Industry 4.0 approach, based on IoT (Internet of Things) and artificial intelligence (AI) algorithms, allows to achieve more organized and efficient processes.
Sensors and telemetry technologies improve visibility on processes and resources and allow them to be managed in real time. AAs a result, the retrieval time of goods and route scheduling times decrease, and workflows become more streamlined. Simply put, the general warehouse efficiency improves.
This increase in performance corresponds to a parallel reduction in inefficiencies (for example, trips without load) and, therefore, a reduction of operational expenses.
Digital logistics process management solutions also enable a more productive use of handling operations employees' work.
In fact, a more reasonable use of resource management can also lighten workloads. After all, improving the visibility of goods and equipment makes handling operations easier.
By combining AI and IoT, it’s possible to automate several processes especially those involving repetitive and low value-added operations. This produces undeniable benefits in terms of performance, but also in the quality of work of the employees.
An important consequence of a 4.0 management of intralogistics, lastly, is the increase in safety standards: more reasonable and rules-based processes eliminate, in fact, several risk scenarios, such as collisions between vehicles.
The application of artificial intelligence algorithms to logistics processes makes the planning, assignment and execution of missions efficient. AI-powered solutions act as a “conductor”, coordinating the waves of missions according to demands and availability of the moment.
Independently, or integrated with other warehouse applications, these systems can dynamically manage the assignment of missions. The algorithms of AI analyze in real time the context, tasks and priorities and coordinate operations accordingly.
This way, from the waves of missions, it is possible to obtain continuously organized and monitored lists meant to identify – or rather anticipate – any critical issue, as well as to promptly respond to changes in status or availability of resources.
The performance measurement goes into double figures. Of equal amount is the saving in management costs whenever problems due to misalignments, bottlenecks or other inefficiency factors are avoided.
Advanced digitalization of logistics processes improves not only execution but also planning. From the processing of the generated data, a precise analysis of performance and scenario simulations can be derived.
The efficiency of the operations is measured starting from the actual logs, and potential optimizations are studied with a data-driven approach. Scenario simulations also allow to accurately verify potential corrective actions and apply them quickly.
The advantage that occurs on warehouse performance is impressive: from the point of view of costs, potential inefficiencies get promptly corrected and it is possible to proceed with a preliminary check of costs and benefits offered by possible alternatives.