The future of warehouses in India: Smarter, speedier and sustainable

[ecis2016.org] We examine the transformation that the warehousing industry in India is undergoing and the present trends that are likely to become the norm in future

The rise of e-commerce has led to the demand for more responsive supply chains and the need to manage a larger number of stock-keeping units, with fewer errors. To fulfill such requirements, warehouses need to and transform into intelligent, efficient and automated facilities. Digitisation is becoming a necessity, to maintain a stronger, competitive edge and to improve business efficiency. The future of warehouses, hence, will be determined by the ‘3S’ principle: Smarter, speedier and sustainable.

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Smarter

The digital transformation of warehouses depends on automation. The association between technology and people, empowered by wearables, is an important aspect of a modern warehouse. There are immense benefits associated with imaging, cloud integration, voice/face recognition and personal assistants. The advantage of such technology is that it offers real-time information, regardless of the environment and location.

Artificial Intelligence is becoming more prevalent each day. For example, while some robots are used only to perform basic tasks like loading or unloading, others can interact with personnel in the warehouse. They can be programmed to do time-saving work such as learning how to maneuver and sort products.

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Warehouse mobility solutions: Logistics operations can be managed by the touch of a button through warehouse mobility solutions. Through mobile devices, the team managing the warehouse operations can be at different locations and still have access to the office.

Handheld mobile computers: Immediate visibility of inventory, as well as receipt or shipping information, can be provided by handheld computers. The visibility of forklifts and other vehicles can be extended with mobile computers. The devices are easy to use and run on operating systems with which operators are already familiar. Furthermore, these, coupled with mobility solutions, allow faster access to data.

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Smart analytics and machine learning: Predictive analysis is the need of the hour. Real-time historical data sets are now being analysed at warehouses, to determine earlier and current day orders and also to analyse and make predictions about the future.

State-of-the-art infrastructure is also essential to support the pharmaceutical industry’s growing demand for temperature-controlled pharma warehouses and distribution centers, especially for supplying COVID-19 vaccines. India is a leading manufacturer and global distributor of vaccines and other pharma products and its role is expected to expand further. This will require associated infrastructure, to support the temperature-controlled supply chain.

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Warehouses in the US/ Europe (and in China) tend to be larger in size (up to 10-12 lakh sq ft) as compared to India, where typically the size of Grade A units ranges between 50,000 sq ft and three lakh sq ft. Statutory laws and regulations and low demand in the past, have prohibited the construction of big warehouses in India. However, we see an increasing need for big-box warehouses that can allow consolidation, application of greater mechanisation and automation and bring in cost and operational efficiencies.

Speedier

Robotics and other automated solutions, can decrease the amount of time that personnel spend on travel. These reductions naturally lead to a boost in efficiency, simplification of manual tasks and lower costs.

IoT implementation: The Indian warehousing sector is gradually shifting to the Internet of Things (IoT). IoT allows inventory management in a warehouse, through the implementation of drones that not only boost productivity and reduce risks but also leverages automated guided vehicles that do not require any human interference. Moreover, with advanced blockchain technology facilitated by IoT, inventory managers can make pre-emptive decisions and predict demand on the basis of data.

Other benefits of IoT-facilitated technologies include accurate measurement of conditions like temperature and moisture (using sensors), enhanced protection and reduction in the event of theft or forgery, synchronisation of data for easy accessibility, improved labour planning and much more.

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In-city warehouses: High land and construction costs, small site areas and limited industrial land availability in city limits, have prohibited the development of in-city warehouses. However, as organisations compete to make faster and more frequent B2C deliveries throughout the day for select time-sensitive stock-keeping units (SKUs), the demand for Grade A-complaint, multi-storey warehouses will see a spike in the near future.

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Sustainable

The time has also come for the warehousing sector, to integrate sustainability in their standard operating procedures. Designs that reduce carbon footprint need to be adopted and sustainable technology needs to be incorporated, for businesses to operate more efficiently. Future logistics parks need to be environmentally sustainable and solar energy is the appropriate solution for it. Solar energy solutions are environment friendly and require low maintenance. Generating one’s own electricity, will reduce dependence on the utility supplier (for the tenant) and will translate to immediate savings on energy bills.

Approximately 3%-5% of energy is lost during transportation and distribution. The longer the distances between the production and the supply points, the more is the energy loss. These losses might not seem significant but they can influence the performance of the installation. Having solar panels on the roof of a building, significantly reduces this distance, thereby, increasing the efficiency of the installations.

The warehousing industry must evolve with time, to sustain market pressures and increasing competition. Smart warehouses, which appear as industry disruptors now, are likely to become the norm over the next decade.

(The author is vice-chairman – real estate, The Everstone Group)

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