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AI's Role in Tomorrow's Warehouses

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AI's Role in Tomorrow's Warehouses
Thad King
Thad King
October 27, 2023

Artificial intelligence (AI) is a hot topic in the world of technology, but if you’re in the warehousing and logistics industry, AI should be on your mind too. The fact is that the future of AI in warehousing will dictate many developments in the coming years, and if you’re not prepared to take advantage of these technologies, your warehousing operation may get left behind.

Why AI Matters for Warehousing and Logistics Professionals

NLP - Natural Language Processing

While it may be simple enough to write off AI as something that only has to do with computers, it’s important to remember that modern warehouses are run largely by computers. Additionally, issues like availability of labor, supply chain management in a crisis, and even onsite security all rely on effective communication combined with quick decision-making. AI-driven technologies currently play or will play a part in all of these things and more.

How AI Understands and Processes Data

AI-powered systems provide real-time data for warehouse automation, but they also utilize natural language processing (NLP), a technology that uses machine learning algorithms. NLP can be used to read and “understand” data. This means that AI can be implemented in everything from predictive analytics systems to get ahead of bottlenecks to parcel scanning systems that take advantage of warehouse automation systems.

To put things more simply, AI can make sense of data similarly to the way humans do. It doesn’t think for itself, however, and can only process things based on its training data, but technologies like NLP and transformers are what are used to connect the dots inside an AI architecture.

The output of AI in a warehouse is a type of pattern recognition where an AI system provides its best guess based on what it already knows. As more data gets fed into it, AI can make smarter decisions.

AI as a Part of Data Efficiency

Data has become a vital asset for warehouse management in the digital age. Online ordering has changed the logistics landscape over the past decade, and trying to keep up with all of the data produced daily can be challenging for warehouse managers and executives.

AI can be used to process and manage large volumes of data, and in some cases, AI-driven systems can assist in making decisions based on data. This approach tends to be more efficient than manually reviewing data, but it can also be cost-effective.

Rather than spending hours reviewing minute data points to arrive at a research-backed conclusion, AI can collate large volumes of data, summarize it, and produce logical conclusions within seconds instead of days or weeks.

This ultimately gives warehouse managers more power and flexibility in making split-second decisions. Access to data management tools that use AI can also help analyze productivity metrics. These are the types of metrics that can sometimes be difficult to quantify, and it may take many hours of labor to come to a conclusion. AI systems can bring together qualitative data and metrics that are difficult to quantify to generate a conclusion based on the modeling of various outcomes.

Forecasting Demand and Planning Ahead


Demand forecasting is another reason why the future of AI in warehousing is such a hot topic right now. Logistics engineers have spent years crafting formulas and predictive models to forecast changes in industry demand; however, just like with COVID-19, some shifts in demand cannot be predicted by merely relying on the status quo of human-derived formulas.

Although AI can’t predict the future, it can create models for different scenarios based on real-world data and potential scenarios. In the case of COVID-19, it may have been possible to alleviate some of the supply chain disruptions that took place during the height of the pandemic if AI-driven tech had been in place beforehand.

With predictive modeling in place, warehouse managers and logistics professionals may have been able to craft more comprehensive and targeted contingency plans based on the output of AI modeling in a pandemic scenario. This isn’t to say that AI can magically make everything okay in a crisis, but by looking ahead, spikes in demand and system overloads can be mitigated more effectively.

AI Connects Autonomous Technologies

AI will also have a greater role in connecting and controlling autonomous vehicle technology going forward. Currently, warehouse operations use autonomous vehicles for all sorts of jobs on the floor, but most of these systems can’t be changed on the fly. This means that they are great when everything goes according to plan, but they aren’t so great when variables get thrown into the mix.

By introducing AI in a connected loop, autonomous vehicle parameters can be adjusted as needed based on volume and demand. Even small changes, like stopping certain vehicles for a few extra seconds to alter the flow of the warehouse floor, can have far-reaching positive effects on productivity. Instead of requiring a human to analyze workflows, anticipate changes, and put those changes into action, AI can automatically make adjustments to keep operations running smoothly.

The additional benefit is that all of these changes and data can be fed back into a main system where AI can then analyze historical data to make more informed decisions. This process can be used to create more accurate models, thereby producing greater efficiency, even in the face of disruptions like those mentioned above.

Increased Productivity Through 24/7 Operations

Robot machines

Like other automated and autonomous warehouse technologies, AI can operate 24 hours a day. Operating 24 hours a day may lead to increased productivity for warehouses that previously were unable to operate on a continual schedule.

This benefit also has the potential to open warehouse operations up to accepting more international orders. If a warehouse is limited to only being able to operate during certain hours, this reduces the ability to accept parcels that are coming from different time zones and must be cataloged or delivered within a specific timetable. 24-hour operations that rely on AI can accept and process more orders, and the obvious consequence is the ability to grow, expand and generate more revenue.

AI is Not Perfect

Despite all of the advantages and benefits that come along with using AI in warehouse operations, the technology is not perfect. Just like with human errors, mistakes made by AI can lead to serious consequences, so it would be wise to temper expectations and continue to enlist the expertise of experienced warehouse and logistics workers.

In general, AI should be looked at as a companion, not a complete solution. When used alongside experienced, trained workers, AI has the potential to enhance warehouse operations greatly. Relying solely on AI to run a warehouse or manage logistics may result in sub-optimal outcomes, and in certain situations, the results can be costly, both in terms of monetary costs and productivity.

Warehouse managers are also encouraged to check the results of any AI warehouse systems often. Verified experts should conduct these spot checks to ensure the results produced by AI are on par with expectations. Checking outputs regularly allows warehouse managers to catch problems before they grow out of control and provides opportunities to make changes to systems that use AI to correct faults.

Ready to Step Into the Future? Contact Pallet Market Inc to Learn How We Can Help

Pallet Market Inc. is your source for pallet company solutions, including custom pallets, on-site pallet repairs, and more. Contact us today to learn how we can streamline your warehouse or logistics operation and help you embrace the future of AI in warehousing! Call [PHONE] for a no-obligation consultation, or reach us online using our convenient [CONTACT_FORM].