Study shows Industry 4.0 significantly boosts warehouse margins

A report by ABI Research claims that gross margins can be increased by 5% to 13% over five years if warehouses use private mobile network technology.

Industry 4.0 is the trend towards automated systems and wireless technology. In warehouses, private network systems run on 4g and 5g technology that is similar to systems used in mobile phone networks. This technology connects and monitors warehouse equipment, creating better inventory and order management, minimizing downtime and organising workers more efficiently.

ABI Research has quantified how Industry 4.0 wireless technology increases profit margins, and the cost of not using the technology. It calculated the investment costs for installing these systems and the return on investment. An example cited is a car factory in South Korea that expects to reduce operating costs by $245.5 million between 2021 to 2025 because of Industry 4.0 technology. An electric goods manufacturer is expected to increase sales by $1.1bn over five years.

The report shows that companies failing to adapt to new technology are missing out on potential profit increases. ABI Research stressed that not acting costs money.

To upgrade a warehouse, a business may have to order new warehouse equipment like racks and trolleys, but existing equipment from a warehouse equipment manufacturer can have sensors added to make them part of a wireless communication system that tracks where all trolleys are, and what items are stored on warehouse racks. Wireless technology is easy to install as it requires no costly wires or cables.

Posted by Katrina
19th November 2019
Retail & Warehousing

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