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Artificial Intelligence and the Future of Warehouse Automation
28 Nov, 20246 Minutes
Artificial Intelligence (AI) is increasingly becoming a major talking point in the rapidly growing warehouse automation industry, which Statista estimates will be worth in excess of $30 billion by 2026, twice as high as in 2019. This could be seen as the next step in the evolution of the industry, following on from the cloud-based software solutions that have driven major success for organizations for over 20 years.
How AI Technologies are Transforming Warehouse Automation
A key innovation in the sector is the introduction of collaborative robots (cobots), which can perform the more straightforward and repetitive tasks, such as item picking and moving stock. According to G2, 4 million commercial warehouse robots will be installed across more than 50,000 warehouses in the United States. They are not designed to cut jobs in the industry, but to allow humans to focus on innovation and more complex tasks that can help businesses grow.
Machine vision systems are transforming packaging by making sure that packages are palletized correctly before they are shipped. They can use cameras to inspect boxes for damage and read barcodes to ensure items are sent to the correct packaging station. The technology can also automate shipping label information and update company data records accordingly. Interact Analysis expects the machine vision market to increase from $6.5 billion in 2022 to $9.3 billion in 2028, which shows how much AI technologies are shaping the future of industrial automation.
AI is making supply chain management more efficient and cost-effective with automated demand forecasting, which can detect a change in demand and identify when supply changes are needed. This helps to maintain effective relationships between suppliers, manufacturers, and distributors, as it helps them work and plan collaboratively to streamline operations and reduce disruption. AI can also be used to identify the best delivery routes, taking traffic, weather, and time windows into account to reduce transportation time and fuel costs.
The Benefits of AI in Automation
Attention to Detail
Unlike humans, AI never gets tired or distracted, which makes it perfect for minimizing mistakes and identifying any errors in industrial processes or supply chain data. By analyzing sensor data and flagging potential issues before they become a major issue, AI helps to make sure everything is done with precision, leading to fewer defects and more streamlined operations. For example, generative AI tools can improve quality control by automatically inspecting and identifying defects in products, which could improve accuracy rates by up to 30% in manufacturing processes, according to McKinsey & Company.
Cost Savings
AI massively improves efficiency by minimizing waste and optimizing resource usage. In supply chains, predictive analytics helps companies avoid overstocking or understocking, reducing storage costs and preventing loss of sales. Businesses can also save on costs by automating tasks with AI to reduce the number of employees needed to complete repetitive manual tasks. McKinsey & Company estimates that almost 50% of repetitive tasks could be automated with AI, saving companies around the world billions in expenses.
Customer Satisfaction
Demand forecasting ensures businesses always have the right products at the right time, reducing the chances of stock levels running low. In production, AI improves quality control, meaning customers get the right products every time without damage. AI route planning also improves the customer experience, as businesses can offer faster delivery times.
Productivity
AI improves productivity in warehouses by taking over repetitive, time-consuming tasks, freeing up employees to focus on more important jobs. Machine learning models can predict maintenance needs, which reduces downtime and keeps production moving, resulting in greater output and less disruption.
Scalability
Businesses can scale up much more easily with the use of AI. Algorithms can manage massive data streams and make real-time decisions, allowing companies to grow faster with fewer issues and adapt to fluctuations in demand.
Sustainability
AI helps businesses hit sustainability goals by optimizing energy usage and cutting down on waste. It reduces environmental footprints through smarter logistics routing and predictive models that prevent overproduction. This is great for company brand as sustainability becomes an increasingly pressing issue.
The Role of Cloud-Based Technologies in Automation
Although the potential capabilities of AI are clearly vast, some believe that the industry is in danger of getting one step ahead of itself. Euan Russell, Warehouse Automation and WMS recruitment specialist at CSG Talent, believes organizations can still have great success using cloud-based technologies:
“While it’s true that it would be ignorant for companies not to transition to AI at some point down the line, some organizations try too hard to keep up with the latest trends. The warehouse automation industry has been growing massively using cloud-based systems, so it’s important that the industry doesn’t get too far ahead of itself.”
Cloud-based technologies in warehouse automation refer to systems and software hosted on remote servers that are accessible via the internet rather than being installed on local hardware. By allowing access to real-time data, they increase flexibility and scalability in warehouse management systems and can integrate with other business tools to improve the efficiency of operations.
Manhattan Associates, one of the first warehouse automation management system organizations to use cloud-based technology, currently has an enterprise value of $16.96 billion, according to Stock Analysis. Additionally, Gartner estimates that cloud-based software will make up 51% of IT spending in 2025, compared to 41% in 2022. These figures show that cloud-based technology is still very much on an upward trajectory, so perhaps it shouldn’t be overlooked.
In-Demand Skills in the Warehouse Automation Industry
The rise of AI in automation could create a demand for a range of different skills to make the most of the digital advancements and keep operations running smoothly. One of the most in-demand skills is AI and machine learning expertise, which allows engineers and data scientists to design and train AI models for specific industrial applications. Robotics engineering is also in high demand for designing AI-driven robots and integrating them with industrial systems.
Another key skill is data analytics and interpretation, as businesses need individuals that are skilled in turning huge sets of data into insights that help optimize performance. Cybersecurity skills are also important, as the increased interconnectivity in automation presents additional risks that need to be controlled.
Roles that are particularly in demand include:
Business Analysts
Data Scientists
Inventory Specialists
AI Engineers
Cybersecurity Specialists
Robotics Engineers
Automation Strategists
Digital Twin Developers
Businesses in the industry should also consider investing in training and upskilling to help existing employees embrace new technologies and use advanced systems. It’s a great opportunity to provide employees with the technical skills they need to really drive the business forward.
What’s Next for Warehouse Automation?
The automation industry is set for exciting advancements in the next 12 months, with a range of technologies currently being developed and tested ready for widespread use. One of the main technologies that is expected to be used more commonly is Generative AI, which will be a workforce partner for 90% of companies globally in 2025, according to Gartner. This will allow businesses to simulate complex scenarios to improve decision-making in areas like logistics and resource allocation. AI technologies are also expected to become more accessible for smaller businesses in the near future, leading to improved productivity and competitiveness across all sectors.
Looking further ahead, the next five years promise even more digital developments in the automation landscape, with data from McKinsey and Company suggesting that automated systems and robotics will account for 25% of industrial companies’ capital expenditures over this time period. Autonomous systems, such as self-driving delivery vehicles and drones, are likely to come into common use, which will reduce costs for businesses and improve logistics. AI-integrated systems like Digital Twins will also be used to monitor, diagnose, and predict performance in real-time to help businesses make smarter decisions.
Euan is optimistic about the future of warehouse automation and feels confident the industry will continue to grow. “Every business needs to handle inventory efficiently to scale up. The only way this can realistically be done with very low error is through automation. More and more companies are realizing this and investing in automated software so the next 5 to 10 years should be massively exciting for the industry.”
Connecting Businesses with Top Talent in Warehouse Automation
At CSG Talent, we have a team of warehouse automation specialists who connect industry leaders to skilled talent capable of helping companies grow. They understand the importance of having a workforce who can adapt to advancements in AI and technology and use a skills-first approach to identifying the best candidates for various different roles. Contact CSG Talent today to secure the talent you need in the rapidly evolving warehouse automation landscape.
For further insights into the future of warehouse automation, listen to industry expert Brittain Ladd’s episode on Conversations with CSG.
Click here to explore the trends, insights, and expertise shaping the future of talent acquisition across some of America’s key industries.
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