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Three Roadblocks that Could Hinder Warehouse IoT Adoption

It's vital to get warehouse personnel excited about RFID, BLE and other IoT-enabled technologies in order to create avenues that can drive innovation and deliver value.
By Stevie Hay
Oct 07, 2018

It's no surprise the Internet of Things (IoT) will dominate fulfillment through the next decade. A McKinsey & Co. report found IoT technology could have an $11.1 trillion economic impact by 2025—a number, McKinsey notes, that would total approximately 11 percent of the world's economy.

But despite the IoT practices already in place and the numerous use cases currently in development, questions linger about the IoT's costs and capabilities. As IoT-enabled technology fundamentally changes pick, pack and ship processes in warehouses, concerns will inevitably rise around employee privacy and data security. Addressing them now will save warehouse managers headaches later. Let's look at some of the challenges facing the IoT in the warehouse—and what steps businesses should take to solve them:

Cost vs. Value: The Sensor Dilemma
The IoT has found different levels of success in various industries. In manufacturing, sensors designed to measure machine performance are now cheap investments that pay off quickly. But in warehousing, IoT-enabled tech faces an uphill climb. Important fulfillment innovations, such as RFID tags and Bluetooth Low Energy (BLE) beacons, could simplify inventory management and help retailers avoid loss, but some warehouse managers still have concerns.

One considerable challenge: cost vs. value. Retailers have tried to implement RFID for more than a decade, but supply chain professionals are still concerned about the lopsided responsibility of implementation. Warehouses are often expected to cover the expenses related to tags, tagging equipment and software, without sales profit to offset the investment. Because RFID tagging is not yet an industry-wide compliance issue, warehouses can still weigh their options, and some aren't sure they see strong enough benefits to justify the upgrade.

One alternative to RFID tags are Bluetooth beacons, which can offer greater range and more speed than RFID tags, allow for real-time location tracking and can monitor environmental conditions, such as light and temperature for sensitive goods. Beacons can also be used to automate access controls, leading to improved processes, increased safety and theft prevention. Warehouses can deploy this technology in one zone and scale as needed. While the cost of a beacon is comparable to RFID tags, RFID calls for a greater investment on the reader infrastructure, whereas almost all smartphones can act as a reader for beacons.

Ultimately, be it RFID or beacons, warehouse managers must choose between spending more money to stay in the game or forfeiting growth opportunities with larger brick-and-mortar retailers.

Simplifying Tasks—or Enabling Micromanagement?
In today's warehouse, efficiency is king: managers look for new ways to cut costs, streamline processes and move product to customers more quickly. There's a significant market for technology that lets us fine-tune processes down to the smallest detail, and that's why Amazon's patent for warehouse wearables garnered so much buzz—and considerable controversy.

USER COMMENTS

Darryn Prince 2018-10-11 02:01:25 PM
"While the cost of a beacon is comparable to RFID tags". Not my experience, not even close.

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