Depending on the specifics of a warehouse, some “smart” technologies can help a supply house increase productivity and reduce mistakes. Some technologies are expensive, but benefits are not guaranteed. After summarily describing some smart technologies, we will look at the steps to take to determine if a particular technology is right for a warehouse.



Radio Frequency Identification (RFID) refers to a computer chip that can be affixed to a carton, pallet-wrap or an individual item. RFID devices can store different types of data and the date of manufacture, while special readers can read the data, even if a chip is not in the line of sight or is hidden by a carton. However, the cost per chip is still prohibitive, as is the cost of special data write/read devices.

The Internet of Things (IoT) refers to assigning a unique Internet address (IP address) to a device that acquires and/or transmits data (e.g., a dedicated sensor), and/or controls something (e.g., the power to an automated conveyor belt). IoT-enabled devices can be programmed and con-trolled via the Internet, and are adapted for warehouse use, resulting in a “connected warehouse.”

Automated Guided Vehicles (AGV) are wheeled, powered product-moving machines. Until recently, they were controlled by signals that special warehouse software transmitted to wires buried in a warehouse floor. Burying wires is an expensive process, and buried wires cannot be relocated since the product-mix, volumes and storage arrangement change often. Now, thanks to IoT and other technologies, wires are no longer needed, so remote-controlled forklifts are now termed “autonomous forklifts.”

One example of an Automated Storage and Retrieval System (ASRS) is a set of bins that move like the steps of an escalator, only the handrails are vertical and the bins pivot on end-rods and so always remain horizontal. At the command of a worker, the ERP system transmits data to a power-controller, which in turn rotates the bins so that the needed bin is at eye level (for picking or putting away). Another example looks like a multi-story carousel of bins, and at the command of a worker, it rotates the needed column of bins to face the worker (who reaches out or up or down to get at the needed bin). Both types save floor space.

Product is usually loaded onto or taken from an ASRS by people, but newer versions of ASRS can be wirelessly connected to a single-arm robot so product can automatically be loaded onto or taken from the ASRS. This arrangement improves productivity because a robot arm does not have to wait for a bin or shelf to move to worker-reachable height. Even without ASRS, a single-arm robot can be attached to a vertical shaft which is attached to a post of a stationary shelving unit. Then, these robots move up, down and over to pick products and place them in totes or cartons or dollies; robots can also put away products. 

Mobile robots can slide under portable shelving units (filled with picked product), and move the shelving to sorting, staging or packing where people make the final decisions. Similarly, these robots can move received product to put-away locations. In an effort to advance the use of not-so-cheap robots, at least one manufacturer now offers to rent them.

Several companies are experimenting with using drones to move small, light-weight products from delivery trucks into customers’ job sites — the so called “last mile” challenge. Drones are already being used by some companies in warehouses, storage yards for cycle counting and other inventory monitoring activities. Some companies are experimenting with drones to pick small, light-weight products. So far, humans, not software, controls these drones.

Image-based bar code readers allow a bar code reading no matter the direction a code is scanned. These special readers can scan two-dimensional bar codes, which have been around for a while and contain much more information than traditional bar codes — but not as much as RFID chips.

Warehouse Management System (WMS) refers to a distinct software package that is interconnected to the ERP system, and is used to verify:

  • The validity of received items;
  • Determine where to put away received items that do not have permanent bin assignments;
  • Track the quantity on hand of each item in each bin location;
  • Alert users when pick areas need replenishing;
  • Generate pick tickets or data for RF displays;
  • Verify the accuracy of picking, packing and loading;
  • Generate truck manifests;
  • Suggest changing the arrangement of items with permanent bin assignments (as item velocities change); 
  • Track picker productivity; and
  • Compare picker productivity to management-defined standards.

Voice Directed Picking (VDP) are systems where each user wears a device that he or she has "taught" to recognize speech patterns. The main ERP system transmits to the VDP server data about each order ready to pick, and the VDP server stores this data. The VDP software determines which people are available at any time, and then transmits data to a specific user device. The device transforms the data into a user's voice, telling him/her the location to go to, the SKU number involved and the quantity needed. The user then does the picking, and tells the device a SKU number, quantity and task performed; the speech is transformed into data, which is transmitted by the VDP server back to the main system for verification. 

A similar sequence of steps is used for put away. The system tells the user where to go and how much to put into the directed location; the user tells the system what item was put away, the slot location and the quantity. 



Although different technologies have different characteristics, the following steps can help determine potential, practicality and cost-justification of smart warehouse technologies.

  1. Sketch out a five-year plan addressing possible changes in products sold, types of customers served and warehouse characteristics.
  2. List storage and transaction volumes of the warehouse (e.g., number of products stored and lines picked per day).
  3. List the costs of operating the warehouse and the factors behind each cost.
  4. List the current technology, including ERP software and computer(s).
  5. Determine the desired goal of the technology (e.g., for an AGV, an increase in productivity); be as detailed as possible.
  6. Search the internet, identifying different vendors of the technology. Create a list of the contact information for each.
  7. Using the information from step six, request information from each vendor.
  8. Using the literature obtained in step seven, define the information that a vendor will need to quote the costs of the technology in question. If necessary, go back and revise steps two through five.
  9. Keeping the estimates from step one in mind, create a request for quotation (RFQ), then use that quote to determine feasibility and justification. In the RFQ, include goals, warehouse volumes, increased to reflect future conditions, description of current technology and the warehouse costs. Ask for a quotation of software, hardware and services costs, both for the initial investment and recurring annual costs. Ask for an estimate of savings and other benefits (per steps 3 and 5), and for a list of possible challenges to achieving those savings and benefits. Email the RFQ to each vendor. Using the questions in the RFQ create a spreadsheet for recording responses to the RFQ.
  10. As responses to the RFQ come in, use the spreadsheet to record them.
  11. After a few responses have come in, use the information in the spreadsheet to: 1) estimate initial investment and recurring costs; 2) estimate recurring savings and benefits; 3) judge the likelihood of success and the degree of challenges to implementation, and the degree, if any, of changes to the current hardware and software, and warehouse characteristics – which would be additional costs