What Does the Digitalization of Distribution Chains Entail?

Automation and digitalization initiatives are taking place across most asset-intensive industries. Supply chains and logistics are at the top of the list of those that benefit the most. With the expansion of e-commerce, driven by the global pandemic, the sector has been in the spotlight.

In 2016, a DHL survey found that 80% of warehouses were not automated and only 5% were fully automated. Automation in these spaces has increased since then; however, the sector still has significant potential to be tapped. Whether companies adopt full automation or semi-automation, there are fundamental technologies that warehouse operators can use to begin their digitalization journey. Private industrial wireless networks are one of them.

Why Automate?

In manual warehouses, there are many redundant and time-consuming tasks that are strong candidates for automation. For example, according to Logistics IQ, order picking operations consume more than 50% of the time spent on orders, and only 25% of that time is dedicated to value-added picking operations. The remaining time is spent searching (10%), writing (5%), and walking (60%).

The ultimate goal of digitalization is for all warehouse subsystems to communicate with each other, providing a complete view of operations. Automation solutions for these facilities include picking and sorting systems, conveyor belts, storage and retrieval systems, data capture through barcode scanning, and guidance systems for automated guided vehicles (AGVs) and autonomous mobile robots (AMRs).

Concrete Applications of Automation for the Transportation and Logistics Industry

Warehouse Automation

Cost pressures, stricter SLAs (service level agreements), booming e-commerce markets, and global events (such as COVID-19) have pushed warehouses to use more robots and automated systems that increase productivity and reduce costs.

Internet of Things

Situational awareness is vital within a warehouse. This is achieved through a large number of connected sensors that measure and monitor temperature, energy consumption, the health of workers and machines, and much more.

Digital Twin and Advanced Analytics

Leveraging information collected from data sources within the warehouse and the complete supply chain helps companies create a digital twin of their operations. Advanced analytics improve operational decision-making and productivity.

Global Asset Tracking and Condition Monitoring

This is vital for knowing the estimated arrival time of assets at warehouses, diagnosing supply chains with opportunities for improvement, and offering additional services to customers, such as visibility across the entire supply chain. Precise indoor positioning within warehouses enables a multitude of asset and personnel tracking and location use cases.

Starting Point: Connectivity

Thinking strategically, a good starting point is connectivity. Nearly all digital technologies require solid, reliable, and predictable connectivity to connect tablets, sensors, robots, and employees to cloud-based software systems that analyze and optimize workflow.

Connectivity is a key part of the digital platform, which, along with the cloud configuration, must be prepared to support the various use cases and applications that will follow. Activity in many warehouses and logistics centers tends to be highly dynamic, and they need a flexible network that can adapt.

For operators that outsource providers (third-party logistics), configurations change frequently with provider contracts. This type of agility and flexibility will require robust wireless coverage, complemented by wired networks for fixed infrastructure.

Until recently, wireless technology options had limitations in terms of performance, reliability, and compatibility with an end-to-end automated warehouse. Operators have long relied on private radio systems, such as TETRA or P25, for voice communications, but these systems are incapable of handling data or video.

Sensor networks use narrowband protocols that consume little bandwidth and support low-power sensors over short distances, such as Bluetooth Low Energy (BLE) for geolocation, medium-range mesh networks like Zigbee, or longer ranges with LPWAN technologies like Sigfox for sensors. However, none of these technologies can transfer more than very small amounts of data.

For higher-bandwidth data applications, the primary wireless technology has been WiFi. The recently standardized WiFi 6 offers improved performance over WiFi 5 and supports an expanding range of devices, but it only supports mobility at walking speed and therefore is not a suitable solution for AGVs, for example. WiFi technology can overcome some of these limitations, but it is costly. Significant engineering is required to understand how WiFi signals will propagate in a typical warehouse.

A Converged Communications Network

Over the past decade, industries have used LTE cellular technology as an alternative to all these wireless technologies. Both 4.9G/LTE and 5G support high-bandwidth applications currently covered by WiFi, but they also support high-speed mobility and better coverage than WiFi. This is especially important for warehouses with high ceilings and outdoor areas, environments where designing WiFi coverage is challenging.

4.9G is the latest version of the LTE wireless standard, which is already used in many asset-intensive use cases across industries. Any company can install a private wireless network based on 4.9G/LTE or 5G, in the same way it could install a WiFi network. Small cell access points are similar in size to a WiFi access point, although fewer are needed to provide coverage for an indoor or outdoor space. They can be connected via Ethernet or, in remote outdoor locations, through point-to-point microwave links.

A private wireless network differs from WiFi in that it has a central system that provides the functionality needed to manage and operate the entire network. The mobile gateway processes user data traffic and determines the quality of service (QoS) for devices and applications. It assigns IP addresses to devices and performs the integration between the private wireless network, the internet, and any other network.

The digitalization and automation of Industry 4.0 is being adopted across many industries, from manufacturing and rail to aviation and ports. Many of these technologies are employed for other applications, such as autonomous vehicles and robots, remote machinery control, the use of IoT sensors and data analytics to optimize processes, and everything from establishing maintenance schedules to identifying safety issues.

Digital transformation means something different for every company. It is important to understand the objectives and develop a long-term digital strategy to achieve them.

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