Data analytics: How warehouse managers can fully leverage their MHS data potential – and what to look out for

Data is today’s approach to improving operational efficiency and system availability. Or, more accurately, data can be the most efficient and cost-effective approach to improving operational efficiency and system availability.

Proactive, data-based decisions are an industry game-changer and an extremely valuable resource for any warehouse operation. By implementing the full spectrum of modern data services, a warehouse can improve the two most important aspects of its material handling system (MHS): operational efficiency (how efficiently the system moves items) and system availability (system uptime, which is very much dependent on maintenance activities).

But how should warehouse managers approach the choice between different data-driven solutions? Which data-driven services are the crucial must-haves? Learn about the answers in this article, plus the competitive advantages that an increasing number of warehouse managers are already reaping from having implemented a data-driven MHS operation.

Why are more MHS owners choosing data-driven support?

Before we get into the checklist of data-driven must-haves, let’s take a step back: Why is it so important for warehouses to team up with a data-savvy sortation MHS service provider in the first place?

Most warehouse operations experience a need to strengthen competitiveness, and one of the answers is trying to lower operating expenses (OPEX) while maintaining a stable performance. Two of the core indicators in this effort are increasing system availability and avoiding unexpected downtime. Data-driven operation and maintenance is a significant addition in both endeavours.

Part of the reason that some warehouse managers find operations costly is the approach to scheduled service and maintenance – defined tasks with specific time intervals that usually result in large amounts of planned downtime and a critical diminishing of system availability. Data-driven O&M is the best way to change the approach from scheduled service to condition-based and proactive service on both hardware and software, which not only results in less downtime but also almost certainly reduces the overall O&M cost by a significant margin.

Data-driven, predictive maintenance is also best practice when it comes to avoiding the highly expensive consequences of unexpected downtime. By staying alert and proactive through data analytics, O&M teams can manage potential issues before they reach their most damaging climax: a full-blown system stop. Most warehouses have room for service windows, but unexpected downtime is a real killer. This is when people are at work and shipping deadlines need to be met.

Overall, the incentive to replace traditional, scheduled-based O&M with diagnostic data-based O&M is strong. This is the reason why more warehouse operations are teaming up with system suppliers who specialise in a data-based approach to O&M.

How a data-driven operation is made possible

While data-driven, diagnostic services may seem complicated and difficult to achieve, some of the industry’s most forward-thinking systems providers have successfully cracked the code to data analytics.

Their diagnostic models are extremely accurate at identifying issues and scenarios. Also, because the system supplier helps other sites, learning from an issue occurring at one site will prevent the same issue from happening at other sites – the systems provider’s monitoring and diagnostics tools will work as the eye in the sky that helps all involved warehouse operations achieve a higher level of system availability.

Another precondition for a data-based operation is the people: data specialists who work together with system specialists to analyse the data and design the correct diagnostic models.

The specialists are vital and have a profound understanding of systems. When this is linked with the knowledge of engineers, technicians and other specialists who built the system in the first place, it becomes a powerful force in unison with data.

The combination of data and system specialists is what makes a data-driven operation possible.

What should warehouse managers expect from their system supporter?

So, how can warehouse managers make sure that they find the right partner for data-driven operations?

First of all, as a baseline, the warehouse manager, as a system owner, should prioritise a partner that:

1. Is specialised in the company’s MHS – preferably from the company that designed the system.
2. Offers data-based services for every aspect of system service and support – especially O&M – to improve the operation in real-time, prevent breakdowns (and maintain cybersecurity) and ensure effective fixes if anything goes wrong.
3. Offers a 24/7/365 hotline where specialists are directly accessible and work proactively instead of ‘just’ reactively (more on this later).

What else can warehouse managers expect before they embark on the data-driven journey?

Improve

The main purpose of the services under the ‘Improvement’ category is to enable MHS owners to proactively optimise the warehouse operation’s inventory flow and fulfilment rates whilst avoiding downtime during operations, based on live data and diagnostic models.

The ‘Improvement services’ consist of a series of diagnostic and monitoring programmes at the operational and system levels, plus a range of dashboards for easy management and tracking of operational and maintenance data.

Real-time analytics

Real-time analytics unlock detailed insights into system health and operational performance using a cloud-based solution. The data is turned into actionable plans for how to optimise the specific system and operational performance in real-time.

Customisable dashboards can be designed to present the data and actionable insights for every level of the warehouse operation: operations, maintenance and management.

Additionally, the warehouse manager can get real-time analytics with a live status on processes inside the MHS, such as: goods-to-person station handling, picking, packing, replenishment, exceptions and recirculation.

One example from the warehouse and distribution industry is the automatic data analysis of a distribution centre with a sortation system consisting of two sorters with some truly puzzling capacity levels. The two sortation systems performed extremely well, achieving a utilisation rate close to the theoretical capacity. However, the high system utilisation was not reflected as equally high productivity. Data revealed the two systems were misconfigured and crossed over items back and forth. Based on these insights, the most efficient solutions were identified, and the result was a much more effective system with less rework and only the necessary crossover between systems.

How diagnostic models lead to optimised performance

The data-based diagnostic models continuously check the operational health of the site to identify any developing issues before they arise. Customer data models crunch data 24/7/365 to spot adverse trends and take targeted countermeasures that will help to improve efficiency and reduce costs.

For example, automatic data analysis of the number of no-reads (jackpot items) identified the causes and reduced the number of rejects by more than 70 percent.

By identifying trends before they become events that impact system health, data-based diagnostic models also significantly limit the risk of unexpected stops. These are the stops that bring warehouses to their knees by hindering operations for hours or even days.

At the component level, the automated continuous monitoring of operational parameters such as vibration and temperature can spot anomalies that may indicate the risk of failure in either hardware or software.

An example of this is when the diagnostics centre learned from the dashboards that there had been a sudden drop in scanner performance at an induction unit at a specific site. The issue was identified as a metal cover blocking the scanning path. After a local engineer adjusted the cover, the scanner’s performance returned to normal.

Overall, through a combination of monitoring and early, proactive intervention from the hotline, the warehouse manager can apply a condition-based maintenance strategy to maximise item flow and fulfilment rates. This is a much more cost-effective approach to maintenance than conventional scheduled maintenance.

Prevention and cybersecurity management

Nowadays, preventive services are required to ensure a stable system execution platform. Many legislative demands require preventive and protective actions, such as identifying and addressing known cyber-risks. The ultimate goal is to achieve a stronger system readiness and to be as prepared as possible with a balanced investment/risk approach.

A good systems provider has experts in place to monitor the risk level of the system platform and to take the required preventive actions. The experts should access the system through a process that is well-documented at every step and meets the highest standards of security management.

Today, the ISO 27001 certification is considered to be the gold standard for information security management and the least to expect from a systems provider managing access to the system. It is also for the warehouse manager to guarantee that access to their MHS and controls complies with globally recognised best practices. A system supplier can only achieve such a certification by passing an audit carried out by externally approved cybersecurity specialists – certification that must be renewed within a pre-determined timeframe.

Cybersecurity is an increasingly important aspect of ‘Prevention’. Security management in cybersecurity should, as a minimum, also include antivirus management, inspection management, and patch and vulnerability management. Again, the service provider must have proven processes for testing any possible impact on a site, including evaluating whether an update is required for a specific site.

There are many reasons to prioritise sourcing the security management from the MHS provider: warehouse managers will get operational continuity and reliability, as well as assurance that the entire organisation complies with regulations. A good and certified set-up also minimises loss due to potential cyberattacks and protects the warehouse operation from taking a financial hit due to, for example, system downtime during peak seasons.

With all of the above covered, there is only one risk left: unusual circumstances.

Ensure

Everyone wants to feel secure with the right bulwark against worst-case scenarios – this includes having a hotline structure in place to make sure that any breakdowns, hardware issues or software bugs will be fixed as quickly and efficiently as possible.

The best hotline services are centred around proactive 24/7/365-available staff, who are system specialists with the right combination of seniority and skills. In case of an incident, it is crucial that the warehouse manager has immediate and direct access to these specialists.

Every warehouse manager would agree that in the case of an actual system emergency, there is no time for sitting in an endless phone queue in a digital phone system, asking to be put through to the actual specialists.

Specialist support

Another important aspect of today’s modern hotline services is specialist support. System owners should always be supported directly by a specialist who understands their system and is able to fix software bugs remotely. Such a specialist will offer fast and specialised assistance to get the operations up and running again in the minimum amount of time.

Real hotline experts not only work on resolving incidents, they also provide a root cause analysis afterwards, to help the system owner make informed, data-driven decisions to make improvements to the system. If an incident occurs and it is software-related, hotline services will include software bug fixing and no discussions of payment before an issue can be fixed.

Change management

In addition, it is advised to choose a system supplier that offers efficient change management in the case of incidents.

As an example, there should be proven change management procedures for software updates, so the system owner is in control of risk management and fall-back procedures being in place.

Takeaway: Data-driven services are an all-round game-changer

Warehouse operations that successfully embrace the full potential of modern data-driven services will reap tremendous performance benefits.

A data-based, diagnostic approach to service can improve almost every aspect of the warehouse operation:

• Improve real-time performance and availability
• Prevent operational and cybersecurity issues and breakdowns
• Ensure the most efficient and fastest solution in case of any unforeseen emergency

Warehouse operations have always done everything in their power to increase inventory flow and order fulfilment rates. Given the current level of competition in the industry, this focus has been sharpened even more. Unfortunately, the objective to limit downtime has unwillingly resulted in significant amounts of planned downtime due to the industry’s singular reliance on scheduled maintenance.

Data-driven, diagnostic services change the entire narrative. Predictive and condition-based service is now an option. Planned downtime can be almost entirely avoided. Full, real-time transparency into how the system is performing and how performance can be optimised is available. The sum of all those parts is that the perfectly run warehouse operation is now within reach.

The key is data, but in a much more practical sense, the key is to partner up with the right service provider – one that understands how to unlock the massive potential of data analytics. This includes a 24/7/365 hotline, a dedicated and specialised diagnostics team and a monitoring unit that is always analysing diagnostic data results to help clients stay out of trouble and on top of performance.

Going forward, incorporating data analytics into service and maintenance will be a key competitive differentiator in the industry. In truth, the race has already begun.