8 ways a digital twin can add value in the warehouse – using WMS data

8 ways a digital twin can add value in the warehouse – using WMS data

02 March 2020

  • Digital Twins

 

In the warehouse, ‘always-on’ efficiency has become key to success, but it is difficult to test and trial new methods of optimising operations in a busy 24/7 warehouse. If current orders are to be fulfilled on time in full, conveyors can’t just be switched off for 12 hours while a new technology is tested. Equally, 1000 tons worth of stock can’t just be cleared away from the shop floor to rethink a packing layout. This is where digital twins can come into their own and they are becoming increasingly commonplace in the warehouse, as a way to explore cost and efficiency optimisation. As a result, industry researchers expect the digital twins market to grow by 38 percent annually over the next few years, reaching USD $26 billion by 2025.

In for a penny….

Digital twins are useful for logisticians and can bring deep insights into the way warehouses are planned, designed, operated, and optimised. By fine tuning the efficiency of a warehouse, businesses can make fractions of cost savings that when multiplied up, help ensure greater profit margins are secured. The old saying “look after the pennies and the pounds will look after themselves” was never truer than in the warehouse.  Making these cost savings means more money can be diverted towards satisfying customers – with free shipping and super-fast fulfilment services. Both these features are important value adds that help to build loyalty and take market share away from competitors. However, to be effective they need data - which is where the warehouse management system (WMS) needs to be in place.

Special features of digital twins

It can be confusing to distinguish between a digital twin and other types of computer model or simulation.  Four of the special characteristics of a digital twin are as follows:

  1. It is a virtual model of a real ‘thing’ – like a warehouse;
  2. It simulates both the physical state and behaviour of the thing – giving an insight into how a warehouse can be optimised;
  3. It is unique and associated with a single, specific instance of the thing – for instance exploring how a proposed new distribution centre (DC) should be designed;
  4. It is connected to the thing, updating itself in response to known changes to the thing’s state, condition, or context – using real data mined through a WMS to predict future patterns and provide value through visualization, analysis, prediction, or optimization.

Using data captured within the WMS, it is possible to create a digital twin of the warehouse, simulating operations and creating ‘what if’ scenarios. The technology is also proving useful for businesses opening up new warehouses and as new automation systems enter the market, organisations can apply them virtually, to see what kind of impact they can generate on workflows.

The potential tweaks that can be implemented as a result of exploring optimisations with a digital twin can improve efficiency by up to a quarter to 25 percent, according to McKinsey consultants. However, companies should still be mindful of their longer-term strategic goals and maintain a close watch on market forces, technology and consumer preferences, which continue to evolve at a very rapid rate. The focus needs to be on using digital twins to achieve continuous improvement targets. Working with a company such as Indigo, that can offer ‘real world’ insights into how to optimise the warehouse, and how to extract operational data to be used in the creation of a digital twin is very important. This can be achieved using integrated data captured from a WMS and in addition, drone-based stock counting systems, automated guided vehicles (AGVs), goods-to person picking systems and automated storage and retrieval equipment.

How digital twins add value in the warehouse

Here are 8 ways a digital twin can add value, by exploring how a warehouse can be optimised, without having to impose a shutdown:

  1. Identify ways to improve space utilisation and efficiency;
  2. Evaluate how automation technology and materials handling investments could improve productivity and workforce efficiency;
  3. Experiment with different operating scenarios – e.g. revised floor plans, improved storage accessibility, or model the impact of demand peaks like Black Friday or Singles Day on resource allocations;
  4. Inform the design and operation of cross-docking facilities;
  5. Model inventory and operational data including the size, quantity, location, and demand characteristics of items;
  6. Simulate the movement of products, personnel and materials handling equipment;
  7. Use sensor data and monitoring technologies to reduce energy consumption;
  8. Provide data on the movement of inventory, equipment and operatives to minimise waste - from congestion in busy aisles to low productivity or picking errors by operatives.

As Internet of Things (IoT) technologies continue to become more readily accessible, the warehousing and logistics sector is just starting to explore the potential of digital twins. Using a WMS is the first step towards being able to access the many benefits and gain greater insights into future performance.

Author: Carl Green, CTO at Indigo Software