What is Digital Warehouse? The best guide

With the growth of digital warehousing and the Industrial Internet of Things (IIoT), Scalability in eCommerce and logistics businesses may now be realized successfully. A digital warehouse is new in the logistics industry and it refers to the digitization of order-fulfillment procedures.

There may be days when the inventories would be lost or untraceable. But by having effective warehouse management software with professional management and expertise, the exact location, status, and quantity of items in a supply chain should be easily identifiable.

Thus, WMS (Warehouse Management System) provides a solution for shorter lead times, and lower inventory levels, resulting in fewer errors, diminishing emergency deliveries and offering translucent interaction between warehousing services and their customers.

Let’s go over the basics of digital warehousing, how it is managed, and its benefits, WMS in this blog.

What is Digital Warehousing?

Digital Warehousing is storing items before selling them or transferring them to another fulfillment location. The digital warehouse is the use of cutting-edge technologies and automation to enhance and optimize order-fulfillment operations.

It aids in boosting the eCommerce supply chain’s speed, accuracy, and visibility. Digitalization in warehouses increases firms’ bottom lines and allows them to scale more effectively.

Many businesses have switched to fully automated and adaptable digital solutions as a result of new technical possibilities. One such industry is digital warehousing. Smart warehousing, also known as digital warehousing, allows you to use cutting-edge technology to perform all storage and order fulfillment processes productively.

Examples of digital warehouses

• Amazon Redshift: This is a data warehousing service provided by Amazon Web Services (AWS). It allows customers to store and analyze large amounts of data using a managed, cloud-based infrastructure. It is designed to handle petabyte-scale data warehouses, and it uses a columnar storage model to optimize query performance.
• Google BigQuery: This is a fully managed, cloud-native data warehouse that allows customers to analyze large amounts of data using SQL-like syntax. It is part of the Google Cloud Platform and it is designed to handle big data use cases, such as real-time analytics and machine learning.
• Microsoft Azure Synapse Analytics: This is a cloud-based data integration, analytics, and AI platform that enables organizations to analyze data from various sources. It allows customers to store and manage large amounts of data, and it provides tools for data integration, data warehousing, big data analytics, and AI.

What is Digital Warehouse Management System?

A Digital Warehouse Management System is the basic software that enables more efficient operations throughout the supply chain. WMS tracks each unit’s exact location from the time it arrives until it is loaded and shipped to the next location.

When supply chain partners are properly aligned, it can even track inventory all the way from the producer/supplier to the distribution center or end-user via warehousing services.

Digital Warehouse Management

A warehouse management system (WMS) is a software application that helps companies manage and organize their warehouse operations. It is designed to control and monitor the movement and storage of materials within a warehouse. The system can manage tasks such as receiving, putaway, picking, packing, and shipping. It can also track inventory levels, generate reports, and provide real-time data on warehouse operations.

WMS can be integrated with other systems such as enterprise resource planning (ERP) and transportation management systems (TMS) to provide an end-to-end view of the entire supply chain. This allows companies to manage their warehouse operations more efficiently, improve inventory accuracy, and reduce costs.

Warehousing digitalization benefits for e-commerce

Digital Warehousing allows you to streamline your workflows, effectively manage your supply chain, and increase transparency, speed, and order accuracy. Let’s take a look at the main advantages of warehouse digitization.

1. Enhances Warehouse Efficiency

Automation in warehouse operations improves order fulfillment. It reduces time-consuming tasks, resulting in the saving of thousands of man-hours. Using an inventory scanner, for example, makes it easier to register new goods in the database and speeds up the sorting process. If it is linked to a Warehouse Management System, it is simple to retrieve them afterwards for selling or forwarding to new locations. In addition to this,

• Inventory tracking becomes simple.
• The location of items in real-time is easily accessible.
• Inventory is simple to organize.
• Returns are handled correctly.
• There is less danger of damage or misplacement.
• Improved restocking decisions.
• Reordering is done automatically.
• And even more!

As a result of warehouse digitalization, warehousing activities get faster and the order-fulfillment process becomes smoother.

2. Better Decision Making

Digital warehouses can provide ecommerce companies with detailed data on inventory levels, stock movements, and customer demand. This can help managers make better-informed decisions about inventory levels, pricing, and marketing strategies.

3. Increased Visibility

Digital warehouse systems can provide real-time visibility into warehouse operations, which allows ecommerce companies to identify and address issues quickly, and improve customer service.

4. Improved Tracking Accuracy

In today’s fast-paced environment, most consumers expect tracking data to be updated on a regular basis. As a result, automated systems can assist you in meeting your customers’ expectations. It allows you to update and track the order utilizing a dependable warehousing solution.

With Digital WMS, it’s possible to monitor goods entries and exits by having a proper item coding where all the goods can be obviously identified with a code or sign.

5. Scalability

Your fulfillment solutions and sales channel will move swiftly, effectively, and efficiently with digital inventory management and order processing systems. Furthermore, when you take care of your time-consuming processes, you have more time to invest in the market and update your firm. As a result, building a digital infrastructure is critical to rapidly enhancing and developing your eCommerce firm.

6. Flexibility

Your business will benefit from the flexibility provided by digital systems. Digital systems can assist you to commence fulfilling orders from a new sales channel or a new geographic area.

7. Reduce Costs

Saving money is the most significant independent factor in the digital warehouse. It eliminates the physical assets that result in cost savings. There is no need to pay for rent and maintenance costs on storage as the CAD ( Computer-aided design ) file is digital.

8. Improvement of e-commerce

It is important to adapt your warehouse to the digital world in order to manage omnichannel logistics and online product sales. A company can use warehouse management software to connect to online stores to arrange and dispatch orders, adjusting delivery times to meet e-commerce demands.

Let’s look on the benefits of digital warehouse in brief and then let’s look on the ways to build a digital warehouse.

Benefits of Digital Warehouse Management System

1. Reduce the possibility of “lost” inventory

WMS increases inventory visibility and helps to manage the safety of the stock of the most complex supply chains.

2. Reduce warehouse costs and increases employee utilization

More productive placement and selection can help 3PLs cut labor costs, and mechanized warehousing services systems that optimize on-site storage space and labor management can help 3PLs store larger quantities of inventory more efficiently.

3. Improve Supply chain inventory management

Warehouse storage space is sometimes considered waste. Excess inventory is also money lost. WMS can reduce inventories and safety stocks to ideal levels because it reduces uncertainty through real-time visibility of every step of the supply chain, along with warehouse space optimization.

4. Avoid surprises and last-minute deliveries

Demand changes can be anticipated quicker, and customer service can be met with greater confidence, by the transparency of an effectively integrated WMS and real-time visibility of inventory levels, available warehouse staff, and storage space.

As a result, inventories may need to be adjusted sooner to accommodate the unexpected change in demand.

5. Exact Inventory management – tracking, billing, & financial data completely automated

Every part of warehousing services is integrated with the help of a structured WMS system. When an order is placed, inventory moves, invoices are generated, trucks are filled, and delivery has been booked.

6. Improved production planning and procurement

Managers can improve product flows by forecasting the lead times and inventories to reduce the time along the supply chain operation.

7. Enabling quick access to critical data by Cloud-based warehousing systems

WMS can be cloud-based, allowing key personnel to access information from anywhere using any device.

The client, warehouse, and shipping companies can all verify the same goods and delivery status information in real time with the help of multiple access capabilities.

Now that you have seen the benefits, I think you must have got an idea about the digital warehouse.

How to build a digital warehouse?

You must have set up your mind to set up your own digital inventory with all necessities But that won’t be a good approach as it seems to be. You can look at the brighter side like compatibility, security and other functions. But building a digital warehouse is really time-consuming and more costly.

You have to hire software developers and build a team which comes at a higher cost as software must be constantly updated in order to stay in line. So, what is the solution?

If you are okay with all this investment then you are good to go with and start to build your own digital warehouse. If not then, opt for third-party digital warehousing. And to make it the best use 3D printing digital warehouse and many warehouses comes with these local on-demand services.

Digital warehousing comes with 3D print parts whenever there is a need. Let’s look at 3D printing in a digital warehouse in brief below.

What is 3D printing in Digital Warehouse?

Digital warehouse 3D printing, also known as additive manufacturing, is a technology that allows companies to create physical objects from digital models. In a digital warehouse, 3D printing can be used to create parts, prototypes, and finished products on demand, directly from digital files.

One of the benefits of 3D printing in a digital warehouse is that it allows companies to quickly produce parts or products without the need for expensive tooling or molds. This can be particularly useful for companies that need to create small quantities of parts or prototypes.

Another benefit of 3D printing in a digital warehouse is that it can be used to create customized products. For example, a company might use 3D printing to create customized replacement parts for a specific customer order.

3D printing can also be used to create parts and products with complex geometries, which can be difficult or impossible to create using traditional manufacturing methods.

In a digital warehouse, 3D printing can be integrated with other technologies such as warehouse management systems (WMS) and enterprise resource planning (ERP) to streamline the manufacturing process and improve efficiency.

It is worth noting that 3D printing is not suitable for mass production and it is more expensive than traditional manufacturing processes. However, it is becoming more affordable and efficient, and it can be a valuable tool in a digital warehouse for on-demand manufacturing, prototyping, and creating complex geometries. You will be excited about how to build your digital warehouse.

Difference between Traditional warehousing and Digital warehousing

1) Warehouse processes and workflows done manually are known as traditional warehousing. The merchant or warehousing staff handles every operation, from collecting inventory to storing, stocking up, and tracking.

Digital warehousing also includes systems that automate various techniques such as storing, picking, restocking, returns management, and prediction, as well as directly connecting pallet stacker cranes to WMS ( Warehouse Management Software ). They also have telescopic forks for moving pallets.

2) There are numerous issues due to inaccuracies and inconsistencies in traditional warehouse systems. As a result, the implementation of digital systems in the industry was required. These digital warehousing systems now dominate the industry.

3) Traditional warehousing entails manually ordering, assigning serial numbers, and checking items in and out of the warehouse. Digital warehouses, on the contrary, automate these actions, making inventory management uncomplicated, faster, and more efficient.

Understanding the various types of digital warehousing solutions is essential for integrating WMS software for optimizing warehouse logistics operations. WMS software is divided into five types based on its functionalities, which are defined below.

Types of Digital Warehouse Management Systems

1. Standalone WMS

It offers features in enabling day-to-day warehouse operations. Companies use this system as it includes features such as auditing, shipping, expiration date tracking, monitoring, and controlling the supply chain.

2. ERP-Based WMS

It offers retailers and 3PL companies to manage their operations such as accounting, human resources, supply chain management, and customer relationship management.

Read: Best 3PL warehouse management software

3. Cloud-based WMS

It is a centralized and web-based computing platform that is provided as a SaaS ( Software as a Service ) hosted on a cloud server by having lower IT maintenance.

4. Supply Chain Execution Module

It manages multiple aspects of supply chain warehousing management through automated processes such as product cycles, inventory management, and material sourcing.

5. On-Premise WMS

It is used to enhance specific warehouse logistics workflows that are managed by an organization’s IT department and other internal support teams.

Best Digital Warehouse Management Software

Digital Warehouse Management software helps us in managing all the operations of the business by minimizing labor charges and improving customer services. The best Warehouse Management Software available on the market are listed below:

1. Oracle NetSuite

This is the top-rated integrated cloud business software suite for enterprise resource planning (ERP).

2. Logiwa

This Cloud Fulfillment Platform is a comprehensive WMS and high-volume direct-to-consumer fulfillment solution.

3. Fishbowl Warehouse

A warehouse management system (WMS) helps to improve warehouse efficiency and productivity.

4. Manhattan WMS

This software can be deployed both on-premise and through the cloud to optimize daily operations.

5. SkuVault

This inventory and warehouse management software is designed to effectively tackle the most challenging aspects of eCommerce and omnichannel fulfillment.

Growth of Digital Warehousing

“Distribution of Warehousing Transactions in India by Sector in 2022”

In the fiscal year 2022, the third-party logistics sector held the largest portion of warehousing transactions in India, making up 29% of the total. The Indian warehousing market is projected to reach a value of 20 billion U.S. dollars by 2025.

Future of Digital Warehousing

With the growing trend of e-commerce and the need for faster response times and more accurate inventory management, warehouses are facing pressure to become more intelligent, efficient, and automated. In the next 2-10 years, it is expected that the demand for digital transformation will significantly increase, leading to significant changes in the way warehouses operate. The use of digital technologies to disrupt and optimize warehouse operations will become more prevalent in the near future.

The future of warehousing is expected to be shaped by advances in technology and a focus on energy efficiency. The implementation of new technologies and energy-saving measures will be crucial for the success, intelligence, and sustainability of warehouses in the future.

Digitalizing your warehouse and order-fulfillment process is the best approach to saving time and money. As a result, the following warehouse digitization technologies will become increasingly significant in the next years.

1. Inventory management in real time

Warehouse managers and employees are constantly under pressure to complete order fulfillment procedures in an efficient manner. It is challenging and risky to use manual systems. However, when the inventory management process is automated, there is a better success rate of faster and more efficient order fulfillment.

RFID, sensors, GPS, and other automatic identification technologies enable end-to-end visibility of inventory as well as operational intelligence from data collected. Furthermore, as the number of small orders from omnichannel grows, real-time inventory management solutions will become a lifeline for future warehouses.

2. Data exchange in real time

Warehouses and supply chain systems are built on transparency and ease of access. To achieve them and make them a core feature of your business, digital systems must be implemented.

With the support of important technologies such as the Internet of Things, digital systems allow real-time data sharing to be simple, fast, and safe (IoT).

3. Warehouse Management System

On a daily basis, a WMS controls and monitors all logistics processes. It keeps inventory in one or more warehouses to track. Furthermore, it keeps its information up to current in real-time by syncing with many sensors and devices. Additionally, it delivers useful forecasting insights and notifications at reordering points.

4. Forecasting Demand

Forecasting demand allows you to remain agile in the face of fierce competition, fluctuating demand, and seasonality. It is one of the most important tasks in every firm, as well as one of the most difficult.

Fortunately, various supply chain forecasting methodologies are available to help with demand forecasting. It analyses inventory performance over time using real-time data.

5. Wearable Technology

Wearable computers are miniature computers that can be worn on the wrist, head or any other portion of the body. Smart glasses, augmented reality, and voice-activated technologies are becoming increasingly popular. They aid in the optimization of order-fulfillment operations.

6. Autonomous Guided Vehicles

AGVs are growing more popular, owing to labor shortages in the warehouse business. Industry behemoths like Amazon are optimizing automation and significantly decreasing prices, time, and manpower.

7. RFID ( Radio-frequency identification )

It is a modern method of labeling and identifying inventory. As each SKU enters the warehouse, these digital labels are applied.

Do you know what is SKU? Stocking Keeping Units ( SKU ) are alphanumeric codes that are used by retailers to identify and track inventory. It is a combination of numbers and letters and includes color, size, type, price, and style.

This digital WMS enables business owners to eliminate scannable bar codes, which take a significant amount of time and effort to attach and scan. RFID can be even checked from a long distance. This option also reduces inventory errors. A brief scan of the entire warehouse can reveal what products are stored here.

8. Artificial Intelligence

Digital warehousing done through artificial intelligence uses the benefits of technology’s ability to learn. Using AI, machines can collect, analyze, and pivot data to make sure optimal warehouse operational efficiency. 

Apart from that, using AI for warehousing can serve as a security measure for the facility. AI-powered systems can detect errors and breaches almost instantly.

9. Robotics

RFID is used in conjunction with robotics and robotic process automation. The majority of smart warehousing systems begin with the RFID tagging of products. 

Robots organize and place inventory for storage, release, and delivery once the tag is in place. Robots can effortlessly and swiftly retrieve a product within the warehouse using AI and automation based on its RFID tag.

10. Mobile Solutions for Warehouses

The use of mobile devices and apps in warehouses is increasing efficiency by allowing employees to access data and work on the go. Smartphones are not only freeing warehouse staff from desk-bound tasks but also adding new capabilities to standard workstations.

Mobile solutions, such as imaging, tracking, cloud integration, video-conferencing, and voice/face recognition, offer new opportunities for transformations in warehouse operations. In the future, warehouse mobility will be essential for success, making it a worthwhile investment if planned and aligned with operational needs.

11. Drone technology

The use of drones in the warehousing industry is expected to bring significant changes and disruption. Drones are a safe and cost-effective solution for tasks such as locating cargo, conducting inventory, cycle counting, and stock-taking operations. Equipped with sensors, cameras, barcode scanners, or RFID technology, drones can access even the most difficult-to-reach areas within a warehouse and complete checks and inventory management in a fraction of the time it takes to do it manually.

Final thoughts about digital warehousing

In order to prosper, the warehousing business must be prepared to implement the smart warehouse. Warehouse digitization is the future, and if you aren’t ready to incorporate it into your company model, it’s time to start.

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Digital warehousing FAQs