What does the digitalization of distribution chains entail?

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

In 2016, a DHL survey revealed that 80% of warehouses were not automated, and only 5% were fully automated. The automation of these spaces has increased since then; however, the sector still has significant potential to grow. Whether adopting full automation or semi-automation, there are key technologies that warehouse operators can leverage to begin their digitalization journey. Industrial private wireless networks are one of them.

Why automate?

In manual warehouses, there are many redundant and time-consuming tasks that are ideal candidates for automation. For example, according to Logistics IQ, order picking operations consume more than 50% of the time spent on orders, yet 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 comprehensive 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

1. Warehouse automation

Cost pressure, stricter Service Level Agreements (SLAs), booming e-commerce markets, and global events (such as COVID-19) have driven warehouses to adopt more robots and automated systems that increase productivity and reduce costs.

2. Internet of Things (IoT)

Situational awareness is vital within a warehouse. This is achieved through a large number of connected sensors that measure and control temperature, energy consumption, worker and machine health, and much more!

3. Digital twin and advanced analytics

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

4. Global asset tracking and condition monitoring.

This is vital for estimating the arrival time of assets at warehouses, diagnosing supply chains for improvement opportunities, and offering additional services to customers, such as end-to-end supply chain visibility. Precise indoor localization in warehouses unlocks a multitude of use cases for asset and personnel tracking.

Starting Point: Connectivity

Thinking strategically, a good starting point is connectivity. Almost all digital technologies require solid, reliable, and predictable connectivity to link 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 cloud configuration, must be ready to support the various use cases and applications that will emerge in the future. Activity in many warehouses and logistics centers tends to be highly dynamic, requiring a flexible network that can adapt.

For operators who outsource providers (third-party logistics), configurations often change with supplier contracts. This kind of agility and flexibility will require solid wireless coverage, complemented by wired networks for fixed infrastructure.

Until recently, wireless technology options have had limitations in terms of performance, reliability, and compatibility with a fully 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 distances with LPWAN technologies such as Sigfox for sensors. However, none of these technologies can transfer more than very small amounts of data.

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

A converged communications network

In the last 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 enable 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, already used in many asset-intensive industry use cases. Any company can install a private wireless network based on 4.9G/LTE or 5G, just as they would with a WiFi network. Small cell access points are similar in size to a WiFi access point, though fewer are needed to cover an indoor or outdoor space. They can be connected via Ethernet or, in remote outdoor areas, through point-to-point microwave links.

A private wireless network differs from WiFi in that it has a central system that provides the necessary functionality 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 facilitates integration between the private wireless network, the internet, and any other network.

The digitalization and automation of Industry 4.0 are being adopted across various industries, from manufacturing and railways to aviation and ports. Many of these technologies are used for other applications, such as autonomous vehicles and robots, remote machinery control, IoT sensor deployment, and data analysis to optimize processes—ranging from scheduling maintenance programs to identifying safety issues.

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