Key Factors to Consider for a Smart Warehouse

Written by Mohamed Aktar Bin Mohd Sapuan, DLSM

Technology has affected every aspect of the business world. In the modern fast-paced technological world, various smart items have been developed and are being relied on for daily operations. A smart warehouse refers to a large building used for storage of raw materials and other goods where computers and machines are used in the completion of warehouse operations that were traditionally performed by people.

A smart warehouse is strategically designed to maximize effectiveness and efficiency. This is enhanced by incorporating automation, best practices and other possible technologies to ensure that the smart warehouse functions at the highest level. The ultimate goal in designing a smart warehouse is promoting efficiency while at the same time lowering the cost and time consumed to perform.

There are five key essential factors of a smart warehouse that should be considered in developing a smart warehouse, which include automation, agility, scalability, collaborative robots and data visibility.


The single most essential factor for a smart warehouse is process automation. A smart warehouse is all about the culmination of warehouse automation where key components of the traditional or common warehouse are automated. It works to eliminate the input of manual labor where possible. Besides helping to reduce the manpower needs and costs, the process automation is capable of enhancing the speed of data input and shipping accuracy irrespective of the volume of merchandise that is being processed. Additionally, it decreases errors in the process of operations. For beginners, simple automation procedures such as software providing alerts for all steps along the processes improves efficiency in accounting, production, packaging and shipping among other elements.

In the traditional manual warehouses, workers would keep moving around with lists, pick products, load them into carts and then deliver them to shipping docks. Smart warehouses transform the culture of operations and orders are received automatically, confirmed of their availability through the computer systems and pick up lists are sent to robot-carts that pack and deliver them to workers for the successive steps. The image below is of a smart warehouse with packaged products.

Automation Technology

The diagram above shows a smart warehouse conveyor in operation. Picture taken from:


With increasing business needs and demands, the warehousing operations are also increasing in their complexity. For a smart warehouse to be in a position to meet the complex needs, it has to be able to shift gears when necessary and field the dynamic nature of the modern world business. For instance, it should be able to seek for storage opportunities as well as the third-party logistics (3PL) providers to handle any events of temporary stock overflow. This factor also observes the staffing needs of the smart warehouse. While one of the goals of a smart warehouse is to minimize the need for human labor or on-site staff, the management should also be aware that the minimum number of staff members is sufficient and that it can manage to staff up during the busy times of the year. A strategic smart warehouse will maintain a cross-trained group of workers in place for the slower months.

Agility also concerns the kind of software to be used in the smart warehouse. Every system applied should be in a position to work with various platforms and warehousing functionalities such as the sale systems. Most importantly, software as a service (SaaS) solution should be implemented considering that the systems have become standards in almost all industries. Normally, SaaS smart warehousing solution yields lower prices of entry that is payable in monthly installments for the period that services are needed. The services save time by eliminating the need for the necessary massive premise software updates.


As business, warehousing and supply chains complexity keeps growing, a smart warehouse should also focus on the future. The smart warehouse should be ready to receive large influxes of products at any moment considering that the future needs are sometimes unpredictable yet inevitable and one should therefore be flexible. This is especially critical in foods and beverages, some of which could be perishable This also confirms the essence of SaaS solutions.

The addition of new features to smart warehousing may be difficult with an on the premise solution. In some unpredictable cases, the entire system may demand for transformation which may take time and cause a slowdown in the warehouse. However, this would not be a challenge with an effective SaaS solution since updates can be completed as the new inclusions get rolled out without negatively affecting the warehouse efficiency This would save the operators the tussle of having to bring in IT experts to fix unexpected issues.

Data Visibility

Big data has become a mandatory issue of concern in the advancing smart world. As technology keeps advancing, the visibility of data is now a must-have especially for the software that is connected to supply chain management. Software solutions should be ready for instant and immediate data updates and storage as the operations increasingly get more complex. The interested parties should be able to access what they need on time. This is considering that the modern customer is also more informed and will settle for the organization that is able to update their data overnight as opposed to one that takes days.

Besides enhancing customer retention, effective data management offers the operators a bird eye view of the warehouse and the performance at each stage. Any inaccuracy in timing or inventory is detected and rectified on time thus preventing inconveniences. The diagram below illustrates how computer systems and SaaS enabled software would help in quick retrieval, access and update of data in a smart warehouse.

Supply Chain Ads

Collaborative Robots (Cobots)

A cobot, or “collaborative robot” is specially designed to ease human-machine interface and enhance security. These machines also can work with human workers in the same areas and manage risks thanks to their sensitivity and also the programming.Through machine learning applications, programming robots will become really easy for anyone, giving much more flexibility than before. A picker would just have to “show” the moves once to the robot and then he could repeat it.

Multitask machines will appear, being placed in the warehouse only where needed.

For repetitive activities such as loading pallets and packing, this kind of machine could be helpful for human workers. They will be specially designed to work together with humans and not to replace them. It is not always feasible for every warehouse to immediately embrace such technology, especially considering that this implementation requires sizable funds and infrastructure changes. That is why more and more warehouses are embracing collaborative robots, or cobots, autonomous elements that are built to work with your existing associates, not without them.

Cobots allow warehouses to keep many of their own processes and infrastructure design choices intact while still benefiting from the optimized workflow. The fully autonomous elements provide the following

o Enhanced security in a robotic environment
o Highly flexible on “self-learning” machines
o Automate picking for loose items and complex shape
o Reduced picking error rate/Improve on picking rate

Autonomous Inventory Robots

Autonomous mobile robots supply new opportunities for inventory watching.When combining with RFID-tagged products and equipment, these robots can now conduct their own inventory check autonomously at schedules as assigned by the warehouse system.

People might typically do inventory counts every three months, but they can now do it every two hours with real-time data to make better storage and layout decisions about their facility. Not only does it reduces the need for manual counts but also offers real-time mapping to managers which can easily visualize product storage.
RFID tracking solution can continuously verify inventory counts, spot and address problems or discrepancies before they become bigger issues, as well as search for a specific tag if product gets lost or misplaced to prevent unnecessary searches or expedited re-orders.


With the age of internet that is only getting bigger and more advanced, there is no doubt that all aspects of business are getting smart. Smart warehousing has transformed the warehouse operations by making things easier and facilitating easier achievement of production goals. As more business people get smart, it is important to consider these key factors to maximize their efficiency and effectiveness.


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About the Author: Mohd. Aktar has substantive experiences in the professional field of Logistics operations, specifically in the semiconductor industry. Aktar holds the SIPMM Executive Certificate in Supply Chain Management and is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). He completed the Diploma in Logistics and Supply Management (DLSM) on September 2019 at SIPMM Institute.