Manufacturers of all sizes are embracing technology and automation. As solutions become more accessible and affordable small and medium manufacturers benefit by implementing the right technology into their production environments.

However, when thinking about where technology will have the most impact, manufacturers shouldn’t limit themselves to the factory floor. It’s far better to view the entire process – from supplier to customer – to ensure that everything is working together to move you toward your goals.

Warehouses are often overlooked, but advances in warehouse technology open new opportunities for manufacturers to drive revenue and deliver better value to customers.

Learning from retail and e-commerce leaders

Until recently the warehouse was viewed as a place where inventory was stored until it was needed. This could mean finished goods waiting to be shipped, components and subassemblies waiting to be used in production, or parts waiting in case of an equipment malfunction.

Warehouses were cost centres. Minimizing costs was, therefore, the primary focus of manufacturers.

Since then, companies have realized that the warehouse can not only be a revenue generator, but also something that sets them apart from competitors. Much of this innovation has occurred in retail and e-commerce, where giants such as Amazon, Walmart, and other familiar brands have turned their warehouses into technology hubs. As the industry matures, smaller companies have been able to benefit as well, with many implementing new approaches rapidly to adapt to the realities of COVID-19.

McKinsey Global Institute estimates that the transportation and warehousing industry has the third highest automation potential of any sector. So, what does this mean for small and medium manufacturers, and how can this technology be implemented into the warehouse and integrated with the factory floor?

The technology powering warehouse innovation

Your warehouse doesn’t have to look like an Amazon fulfillment centre overnight, or even at all. Instead, manufacturers should look at the technology that is available and understand how it aligns with their existing processes, systems, and equipment, both in the warehouse environment and the production environment.

For example, palletizing, depalletizing, and stretch wrap robots represent a simple and easy to understand use case for warehouse technology. They reduce the need for repetitive, strenuous labour while making the facility more efficient.

Conveyor systems can also be a good starting point. Finished products can be automatically brought to the warehouse while subassemblies, work-in-progress, or other components can be moved to the line.

Taking this a step further, some warehouses are introducing autonomous guided vehicles to move goods around. These self-driving vehicles augment or replace traditional forklifts, increasing throughput and accuracy.

Industrial Internet of Things (IIoT) sensors streamline manual processes by monitoring inventory, preventing shortages, maintaining climate, controlling lighting, and detecting issues or disruptions automatically. They also provide valuable data to workers and decision makers, or to artificial intelligence systems that use the data to automatically adjust warehouse operations.

Finally, automated storage and retrieval systems (ASRS) automate the process of inventory by placing and retrieving goods and recording their location. This improves accuracy and reduces the reliance on manual picking.

Visibility across the entire process

These are just some of the technologies that are available. But what’s most important is that manufacturers do not view the warehouse as a separate entity from the production environment.

Software, systems, and processes should be integrated, and information should be made available to workers through wearables, connected devices, or other displays.

Inventory management systems, warehouse management systems, ordering, demand forecasting, production schedules, maintenance – all these systems must work together to provide visibility from supplier to customer.

Because improving warehouse operations means improving manufacturing operations.

For example, if quality testing comes back with an issue, manufacturers can quickly determine which batches have the problem, why the issue occurred, and where the products ended up after production. This saves valuable time and money compared to a typical large-scale recall made necessary because the manufacturer can’t be sure which products were affected.

Similarly, effective inventory management can enable just-in-time approaches to manufacturing, reducing the risk of supply shortages and improving overall equipment effectiveness. With barcode scanners, RFID tags, or other IIoT sensors, manufacturers know exactly where everything is, how much is on hand, where it came from, and when they need to order more.

Shifting the warehouse from a cost-centre to a revenue driver

Automation technology is increasingly playing a role on the manufacturing floor. The next step is for manufacturers to take this technology and apply it to the warehouse. By viewing the warehouse as part of the production process and integrating systems and technology with the factory, manufacturers gain increased visibility, higher throughput, improved efficiencies, and better utilization of space.

Like everything else, technology on its own isn’t enough. Manufacturers need to think strategically about the technology and equipment they choose to implement and understand how it fits into the larger strategy. But as leaders in other industries have shown, with the right technologies in place, the warehouse has the potential to be more than just a storage room. It can help make things better.