According to a report from McKinsey, companies spend over $350 billion on warehousing globally each year. Warehouses not only guarantee cost-effective distribution while serving as a vital buffer, but they also play a growing role in competitive advantage thanks to technological advancements because they are the final, crucial stage in the customer service process. Warehousing has always been complicated and under pressure because of the rapidly increasing demand and the expectations of customers for quick deliveries with short lead periods.

Challenges faced in warehousing

• Disruption in day-to-day warehouse operations: Integrating modern technology, changing warehouse layouts, or altering work methods can interrupt day-to-day warehouse operations the majority of the time.
• Unprecedented increase in fulfillment: There has been an unforeseen rise in fulfillment, which suggests the need for a fresh design of the warehouse. If the warehousing industry wants to cater to this challenge, it must consider factors like elevating the ceiling, mezzanine floors et cetera.
• Pallet management issues: Due to wrong labeling of the pallets and awful pallet management, warehouses can incur a significant loss as it can lead to damage to the pallets, mislabelling of pallets, or non-availability of the right pallets at the right place and time.
• Accelerated consumer demand: There is a substantial rise in consumer demand. Consumers are ordering more products and expect faster deliveries and better on-demand tracking. High order fulfillment volumes and expedited deliveries to more destinations are under strain.
• Inaccurate inventory information: Inaccurate inventory results in issues such as incorrect stock levels and accumulations of outdated inventory. It is crucial to be aware of the actual inventory on hand.
• Poor warehouse space management: Warehouses with poor facility layouts face challenges with respect to insufficient storage capacity and ineffective use of the storage available. It is extremely important to be concerned about poorly designed warehouses because they could negatively hit productivity as well as profitability.
• Poor Optimization of Picking Paths: Poor optimization of the order picking path in the warehouse is another error that firms often commit. This activity in the warehouse makes up about 50% or more of warehouse operations, thus if the poorly optimized picking path can lead to an increase in the operation cost.

A tech-driven revolution in warehousing is currently underway as companies scramble to uncover and deploy cutting-edge technologies that reduce costs, streamline operations, and boost warehousing efficiency. Technology creates new opportunities, therefore companies who are adept at it in the warehousing industry have discovered creative ways to set out on a path to unparalleled efficiency and maximum customer satisfaction. There are several emerging technologies that cater to various challenges of Warehousing. Some of them are Robotics, 3D Printing, Cloud technologies, Digital Twin Technology, the Internet of Things, etc. However, Digital Twins is the most compelling technology to solve complex warehousing challenges as well as to enhance the efficiency of warehousing.

Why Digital Twin?

Digital Twin technology is gaining immense popularity in the warehouse industry due to the increased complexity of warehouse operations. By leveraging digital twin technology, a real-world object or system can be transformed into a sensor-connected, virtual replica. Digital twins have advanced to the next level by using sensors linked to the Internet of Things (IoT), the cloud, and artificial intelligence. The Digital Twin is a replication of its physical twin created by blending real-time data from the physical object or process with its digital representation.

The warehouse’s digital twin technology works by feeding data into a virtual system. Digital twins can function effectively with valuable data obtained from the real world by means of various technologies such as IoT, Artificial Intelligence, Machine Learning, Augmented Reality, or Virtual Reality that are widely used in the warehouse. Due to this data, it would be possible to mimic various warehouse operations and fulfillment-related equipment in the warehouse or even mimic the entire warehouse itself.

The widespread use of digital twins has the potential to transform the warehouse industry by improving the decision-making process in warehouses and enabling a clear understanding of how various warehouse operations will develop in the future. Digital twins help add value by means of description or visualization, analysis, diagnosis, and prediction. These values combine to enhance warehouse optimization. The adoption of a digital twin enables complete goods, pallet, and package tracking, ensuring operational effectiveness in warehouse operations. Cognitive power devoted to the utilization of digital twins is increasing, as a result, the potential of digital twins is almost endless. To continuously produce the insights required to improve and streamline warehouse operations, digital twins are thus continuously learning new abilities and skills.

Benefits of Digital Twins that can help mitigate Warehousing challenges

• Little to no disruption to day-to-day operations: Through digital twin technology, companies are currently able to virtually create and visualize their warehouse operations without any disruptions to day-to-day operations. Companies can now build virtual replicas of their current warehouse operations and test various scenarios.
• Drive automated decisioning: Digital twin helps drive automated decision-making through telemetry data from robots, AGV, and IoT devices which can increase warehouse productivity while lowering risk and blunders that could occur during the decision-making process.
• Optimize space consumption: Companies now have the chance to rethink and re-examine their operational and layout strategies thanks to digital twins in the warehouse. This enables companies to maximize space utilization and mimic the movement of various resources within the warehouse.
• Streamline warehouse operations: With the assistance of real-time monitoring across the entire facility and insights of the warehouse data through digital twins, most of the warehouse operations can be streamlined effectively with proactive decisions to reduce the costs, and improve the warehouse performance.
• Optimal routes and traffic movement visibility: Digital twins help find the optimal routes for movement, reduce congestion, and figure out how to efficiently move items through every square foot of space by modeling loading and unloading sequences. It will also aid in providing real-time visibility of traffic movement and optimizing picking paths.
• Enhanced effectiveness and efficiency: Digital twins permit an efficient flow of goods and ideal slotting to meet service requirements while spending the least and getting rid of all the roadblocks and eventually increasing the effectiveness and efficiency.
• Reduced risk: Before opening new locations or making modifications to existing ones, companies can design, model, and test new warehouse operations and product flows using a digital twin. The risk that can occur due to unforeseen situations is reduced by leveraging digital twin technology.

Conclusion:

Digital twins will help improve the warehouse industry so much that, according to experts, there will not be any warehouse without digital twins in the upcoming days. Warehouses may undergo a drastic transformation and become SMART with the aid of digital twin technology, as it helps with decision-making and gives a clearer sense of how various warehousing operations will develop in the future. Companies can research more on the creation of their own digital twins if they have a strong technological foundation in place.

This may open various possibilities for the digital twin, including testing modifications before companies adopt them and building new warehouse spaces based on tested models. They can also reach out to their third-party warehousing partners to check if they have any plans to implement a digital twin strategy. Digital Twins can be empowered to load real data sets from the Warehouse Management System/Warehouse Execution System/SAP and run predictive analytics on the warehouse operations that lead to data-driven decision-making. Data-driven decision-making for warehouses would result in the streamlining of warehouse operations and ultimately enhance warehouse efficiency. Therefore, to keep up with the immense competition or acquire a competitive advantage in warehousing, it is prudent to research and explore appropriate adoptions of the digital twin technology.