Advanced software solutions that incorporate artificial intelligence, digital twins, and more are helping companies get a better handle on inventory management.
Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
The supply chain chaos of the past few years has shone a light on inventory and the need for shippers and third-party logistics service providers (3PLs) to get it just right in order to best manage their supply chains and maintain high service levels. Technology continues to be a key tool in addressing the challenge, and two recent projects illustrate ways in which organizations are using advanced software and hardware solutions to increase accuracy and optimize inventory levels. Here’s how.
AI TO THE RESCUE
Third-party logistics service company Barrett Distribution Centers was looking for a way to improve inventory monitoring across its warehouse network. The company operates more than 25 facilities nationwide, serving clients across a range of industries—including apparel and footwear, health and beauty, consumer packaged goods, and consumer electronics. Associates had been using forklifts and scanners to manually track and manage inventory, a process that was becoming increasingly difficult due to the 3PL’s growing e-commerce volumes, which require close inventory tracking to fill individual shipments. Managers wanted to augment the manual process with a technology-based solution that could reduce the company’s reliance on both equipment and labor.
The answer came from Pittsburgh-based warehouse automation company Gather AI, which combines artificial intelligence (AI), machine learning (ML), and analytics to create a drone-powered inventory monitoring system that is helping users improve inventory accuracy, boost productivity, and improve the bottom line. To launch the project, the tech firm digitally mapped Barrett’s warehouses so that the drones could fly autonomously and so that Barrett could use them to conduct regular inventory monitoring, a process that would cut back on the number of forklifts and warehouse associates required for cycle counting.
Under the new process, the drones photograph pallet locations in the warehouse, and Gather AI’s ML algorithms then decipher the bar codes and text from the images, comparing what’s read with what’s logged in Barrett’s warehouse management system (WMS). Warehouse managers can view results from a web dashboard.
Gather AI says the process is 15 times faster than manual cycle counting and provides real-time access to inventory data—which allows warehouse managers to more easily identify and address inventory exceptions.
Barrett is using the drone solution at six of its warehouses and is seeing strong results, according to Jim Rapoza, vice president of business process optimization. Since implementing the project in 2022, at one location alone Barrett has reallocated six cycle counters to more value-added tasks and has eliminated $250,000 in material handling equipment. On top of that, inventory accuracy has improved by up to 70%, according to both Barrett Distribution and Gather AI.
SLOTTING FOR OPTIMIZATION
Medical device manufacturer Boston Scientific needed a better way to manage the growing number of stock-keeping units (SKUs) at its nearly 600,000-square-foot distribution center (DC) in Quincy, Massachusetts. Upwards of 10,000 SKUs are housed in a variety of racking systems at the DC, including bulk floor pallet locations for the fastest-moving items, case flow racks, and wire deck shelves. DC associates primarily perform individual picks—also called “each picks”—to fulfill orders, which can require considerable travel throughout the facility. Company leaders wanted to create a more flexible inventory slotting solution that would address those issues and lead to more effective, efficient overall operations.
Boston Scientific turned to logistics automation and software company Fortna and its OptiSlot DC software to tackle the problem. But they had to put some initial slotting strategies into place first. A “slot” is a shelf or portion of a shelf where items sit in the warehouse. Slotting is the process of determining the best slot for all of the items a warehouse ships. For example, fast-moving items may be placed in easier-to-access locations—perhaps closer to the loading dock for faster loading.
Leaders at Boston Scientific began by splitting the DC into four areas and optimizing inventory zone by zone. Next, products were grouped and slotted for easier picking, putaway, and replenishment. They also looked for opportunities to improve overall picking productivity by:
Optimizing pick paths to reduce travel throughout the DC;
Reducing the need for workers to bend and reach by implementing “golden zone slotting,” a technique in which high-velocity items are assigned to locations at chest height, making it easier for associates to pick quickly while also supporting more ergonomic picking;
Improving space utilization and reducing the number of overall replenishments by improving the slotted capacity in active forward pick and minimizing the overstock in reserve.
The next step was applying Fortna’s slotting optimization software, which allowed project leaders to factor in goals, rules, and constraints to meet objectives; weigh the importance of each objective; and compare potential scenarios. OptiSlot does this by the use of digital-twin technology, which allows managers to replicate their warehouse layouts and view or test potential results before dedicating the labor to implement a particular solution.
Ultimately, Boston Scientific selected an optimization scenario that grouped certain specialty items together; implemented golden-zone slotting to boost productivity and improve ergonomics; and moved its fastest “cube-moving” items to larger, prime locations that would reduce travel and replenishment. Cube movement refers to high-volume items that take up more space in the warehouse, according to Fortna’s vice president of software, Will King. Moving such items from a smaller space to a larger one—from a hand-stack area to a pallet location, for example—reduces the need to replenish those areas frequently, cutting back on work and raising productivity.
Applying the process to a portion of the warehouse in 2022 yielded immediate results, including:
A reduction of 135 replenishments per week, or about 12% of the total;
Improved space utilization, with an overall storage capacity increase of 1.6%;
A reduction in travel distances that amounted to nearly 1 million fewer feet traveled within the DC per week.
Project manager Dan Hamilton, of Boston Scientific, touted the results in a statement describing the project earlier this year.
“Prior to [implementing] OptiSlot, our slotting tool was a very cumbersome, manual Excel-based tool—so we were limited with what we could achieve,” he said. “With OptiSlot, we’re now able to seamlessly layer in as much data (including custom data) from as many different sources as we want, and the flexibility and adjustability of the tool allows us to analyze as many different rules, goals, constraints, and ‘what if’ scenarios as we want. Slotting-move plans—spanning up to thousands of moves—and comparative reports come back in a matter of minutes, with planned out multi-chain move sets ready to go. We’ve only just begun to scratch the surface of the capabilities of this tool, and we are already reaping considerable operational benefits.”
More companies are likely to follow suit as inventory remains a key issue across the logistics landscape. This past spring, the Logistics Managers Index—which tracks industry performance across a range of measures—showed contraction in inventory levels for the first time in more than six years and predicted lower levels over the next 12 months—signs that companies are working through the glut of inventory that plagued the industry in early 2022 and are trying to get a better handle on it in the years ahead.
Seventeen innovative products and solutions from eleven providers have reached the nomination round of the IFOY Award 2025, an international competition that brings together the best new material handling products for warehouses and distribution center operations.
The nominees this year come from six different countries and will compete head-to-head during a Test Camp that will be held March 26 and 27 in Dortmund, Germany. The Test Camp allows hands-on evaluation and testing of products based on engineering and operational design. In contrast to the usual display of products at a trade show, The Test Camp also allows end-users and visitors to the event the opportunity to experience these technologies hands-on as they would operate in a facility.
Award categories include integrated solutions, counter-balanced forklifts, warehouse forklifts, mobile robotic solutions, other warehouse robotics, intralogistics software, and specialized solutions for controlling operations. A startup of the year is also recognized.
The finalists include entries from aluco, EP Equipment Germany, Exotec, Geekplus Europe, HUBTEX, Interroll, Jungheinrich, Logitrans, PLANCISE, STILL and Verity.
In the “IFOY Start-up of the Year” spin-off award, Blickfeld, ecoro, enabl and Filics are in the running. These finalists were selected from all entries following six weeks of intensive work by the IFOY organization, test teams, and a jury composed of journalists who cover the logistics market. DC Velocity’s David Maloney is one of the jurors, representing the United States. Winners will be recognized at a gala to be held July 3 in Dortmund's Phoenix des Lumières.
While Christmas is always my favorite time of the year, I have always been something of a Scrooge when it comes to celebrating the New Year. It is traditionally a time of reflection, where we take stock of our lives and make resolutions to do better. I’ve always felt that I really didn’t need a calendar to remind me to kick my bad habits in favor of healthier routines. If I was not already doing something that was good for me, then making promises I probably won’t keep after a few weeks is not really helpful.
But as we turn the calendar to 2025, there is a lot to consider this new year. The election is behind us, and it will be interesting to see how supply chains react to the new administration. We’ve been told to expect sharp increases in tariffs, like those the president-elect issued in his first term. Will these cause the desired shift away from goods made in China?
What we have actually seen so far is a temporary surge in imports that began in late fall in anticipation of higher tariffs. This bump will be short-lived, however, unless consumer confidence remains unusually high.
Of course, the new administration’s aim with tariffs is to encourage companies to bring production back to America. Will we see manufacturing surge at home? Probably not. It took us decades to send our manufacturing to parts of the world where production was cheaper. I imagine it will take decades to bring it back, if it can ever really be fully brought back. We’ve become accustomed to those lower labor costs. So take your pick—higher tariffs or higher labor costs. Regardless of which route businesses choose, it will probably drive prices higher.
Labor itself will be interesting to watch this year. As I write this, the three-month extension of the master agreement between dock workers and East and Gulf Coast ports is due to expire in a few weeks—on Jan. 15, to be precise. While the two sides have resolved their wage disputes, the issue of automation remains a major sticking point, with the workers resisting the widescale implementation of automated systems.
And of course, we still have two wars raging overseas that have disrupted supply chains. Will we see peace this year, or will other trouble spots flare up?
And here at home, we’ve now been in a trucking recession for two years. What will happen in that sector in 2025? Hopefully, better days are ahead, but only ifconsumers keep spending, demand increases, fuel prices continue to drop, and capacity levels out. That’s a lot to ask.
Whatever this year holds for our supply chains, it is definitely setting up to be very interesting, to say the least.
That is important because the increased use of robots has the potential to significantly reduce the impact of labor shortages in manufacturing, IFR said. That will happen when robots automate dirty, dull, dangerous or delicate tasks – such as visual quality inspection, hazardous painting, or heavy lifting—thus freeing up human workers to focus on more interesting and higher-value tasks.
To reach those goals, robots will grow through five trends in the new year, the report said:
1 – Artificial Intelligence. By leveraging diverse AI technologies, such as physical, analytical, and generative, robotics can perform a wide range of tasks more efficiently. Analytical AI enables robots to process and analyze the large amounts of data collected by their sensors. This helps to manage variability and unpredictability in the external environment, in “high mix/low-volume” production, and in public environments. Physical AI, which is created through the development of dedicated hardware and software that simulate real-world environments, allows robots to train themselves in virtual environments and operate by experience, rather than programming. And Generative AI projects aim to create a “ChatGPT moment” for Physical AI, allowing this AI-driven robotics simulation technology to advance in traditional industrial environments as well as in service robotics applications.
2 – Humanoids.
Robots in the shape of human bodies have received a lot of media attention, due to their vision where robots will become general-purpose tools that can load a dishwasher on their own and work on an assembly line elsewhere. Start-ups today are working on these humanoid general-purpose robots, with an eye toward new applications in logistics and warehousing. However, it remains to be seen whether humanoid robots can represent an economically viable and scalable business case for industrial applications, especially when compared to existing solutions. So for the time being, industrial manufacturers are still focused on humanoids performing single-purpose tasks only, with a focus on the automotive industry.
3 – Sustainability – Energy Efficiency.
Compliance with the UN's environmental sustainability goals and corresponding regulations around the world is becoming an important requirement for inclusion on supplier whitelists, and robots play a key role in helping manufacturers achieve these goals. In general, their ability to perform tasks with high precision reduces material waste and improves the output-input ratio of a manufacturing process. These automated systems ensure consistent quality, which is essential for products designed to have long lifespans and minimal maintenance. In the production of green energy technologies such as solar panels, batteries for electric cars or recycling equipment, robots are critical to cost-effective production. At the same time, robot technology is being improved to make the robots themselves more energy-efficient. For example, the lightweight construction of moving robot components reduces their energy consumption. Different levels of sleep mode put the hardware in an energy saving parking position. Advances in gripper technology use bionics to achieve high grip strength with almost no energy consumption.
4 – New Fields of Business.
The general manufacturing industry still has a lot of potential for robotic automation. But most manufacturing companies are small and medium-sized enterprises (SMEs), which means the adoption of industrial robots by SMEs is still hampered by high initial investment and total cost of ownership. To address that hurdle, Robot-as-a-Service (RaaS) business models allow enterprises to benefit from robotic automation with no fixed capital involved. Another option is using low-cost robotics to provide a “good enough” product for applications that have low requirements in terms of precision, payload, and service life. Powered by the those approaches, new customer segments beyond manufacturing include construction, laboratory automation, and warehousing.
5 – Addressing Labor Shortage.
The global manufacturing sector continues to suffer from labor shortages, according to the International Labour Organisation (ILO). One of the main drivers is demographic change, which is already burdening labor markets in leading economies such as the United States, Japan, China, the Republic of Korea, or Germany. Although the impact varies from country to country, the cumulative effect on the supply chain is a concern almost everywhere.
Container traffic is finally back to typical levels at the port of Montreal, two months after dockworkers returned to work following a strike, port officials said Thursday.
Today that arbitration continues as the two sides work to forge a new contract. And port leaders with the Maritime Employers Association (MEA) are reminding workers represented by the Canadian Union of Public Employees (CUPE) that the CIRB decision “rules out any pressure tactics affecting operations until the next collective agreement expires.”
The Port of Montreal alone said it had to manage a backlog of about 13,350 twenty-foot equivalent units (TEUs) on the ground, as well as 28,000 feet of freight cars headed for export.
Port leaders this week said they had now completed that task. “Two months after operations fully resumed at the Port of Montreal, as directed by the Canada Industrial Relations Board, the Montreal Port Authority (MPA) is pleased to announce that all port activities are now completely back to normal. Both the impact of the labour dispute and the subsequent resumption of activities required concerted efforts on the part of all port partners to get things back to normal as quickly as possible, even over the holiday season,” the port said in a release.
Autonomous forklift maker Cyngn is deploying its DriveMod Tugger model at COATS Company, the largest full-line wheel service equipment manufacturer in North America, the companies said today.
By delivering the self-driving tuggers to COATS’ 150,000+ square foot manufacturing facility in La Vergne, Tennessee, Cyngn said it would enable COATS to enhance efficiency by automating the delivery of wheel service components from its production lines.
“Cyngn’s self-driving tugger was the perfect solution to support our strategy of advancing automation and incorporating scalable technology seamlessly into our operations,” Steve Bergmeyer, Continuous Improvement and Quality Manager at COATS, said in a release. “With its high load capacity, we can concentrate on increasing our ability to manage heavier components and bulk orders, driving greater efficiency, reducing costs, and accelerating delivery timelines.”
Terms of the deal were not disclosed, but it follows another deployment of DriveMod Tuggers with electric automaker Rivian earlier this year.