Key Points:

  • Revenues from the global AI software market are expected to grow from $10 billion in 2018 to $126 billion by 2026
  • It's  predicted that 30% of UK warehousing jobs will become fully automated by 2030
  • Chinese eCommerce retailer Alibaba uses a smart warehousing system where robots do 70% of the work and can carry up to 500kgs

In the last few years, we’ve been hearing a lot about how artificial intelligence will change the way we do business. As a result, many companies are trying to figure out how to utilize new AI-enabled warehouse technology today to try and get ahead of the competition. According to, revenues from the global AI software market are expected to grow from $10 billion in 2018 to $126 billion by 2026.

eCommerce retailers are finding ways to put AI to use in their warehouses, and operations are being greatly improved by this. Autonomous robots, personalized portals providing customizable data analytics, chatbots with immediate customer support, and tailored search results and ads for product recommendations are just a few ways AI is making warehouse technology smarter.

Machine learning and robotics have a long way to go until they are truly thinking for themselves, but they optimize productivity and bring us a brand new experience within the warehouse.

The efficient use of AI in eCommerce helps more warehouses connect utilizing the cloud, allowing them to track and map out the fastest way to ship products. The ways in which companies are using AI in the warehouse to become more efficient, improve platforms, and streamline the packing process are growing every day.

Table of Contents

What is Artificial Intelligence?

If a machine learns from experience (i.e. gathers knowledge independently) and can then act based on those experiences, it’s considered artificial intelligence. These machines can process information like any human and adapt to any new or changing situation.

The most sophisticated piece of machinery known to man, other than the human body, is a piece of machinery using AI. In computer programming, the conventional approach is to tell a computer to do something by breaking down each problem into a smaller one that the computer can perform.

But, in a neural network, you don’t tell the computer what to do. Instead, it learns what to do and solves the problem on its own. One example includes the warehouses of British online grocery store Ocado, where robots sort and pick groceries for orders. This is done fully autonomously in the warehouses.

Artificial Intelligence vs. Machine Learning

Right now, there’s a bit of a boom going on in the different types of neural networks available and how AI is applied in different industries. That’s why it’s important to understand the difference between artificial intelligence and machine learning.

Artificial intelligence refers to a man-made object that has the ability to think or understand like humans. It is a system embedded in a machine or software that simulates natural intelligence to solve problems. Perhaps most importantly, AI is capable of making decisions and responding to situations as humans do.

In its simplest form, machine learning allows machines to gain knowledge on their own, rather than being programmed. It’s a subset of AI, and the ultimate goal is for a machine to learn to perform a certain task and do it well. To do this, a machine will analyze data and create self-learning algorithms. The crucial point here, though, is that with machine learning, these machines have very static responses - they can't think or adapt the way AI-enabled machines can.

Why Does My Warehouse Need AI?

Artificial intelligence can go a long way to improving operations at your warehouse. Smart systems come with a whole host of useful benefits that will smooth your business processes and (hopefully) increase your profit margins. Here’s why you should be using AI in your warehouse:

  • Better data: Thanks to algorithmic analysis, you’ll be able to get a better handle on all the data being generated by your warehouse. This will give you a good idea of patterns in your operations and can help you plan better.
  • Easier inventory management: One of the biggest benefits of artificial intelligence is that you can use it to gauge market demand and control your inventory so there’s never too little (or too much).
  • Improved productivity: Using warehouse operation robots is more effective than using human labor. These robots can easily pick and pack orders with more accuracy than humans can - and they can do it faster, too.
  • Better communication: Warehouses run on data, but sending this back and forth between different humans can result in a lot of miscommunication and mistakes. AI can ensure that everyone can understand what’s happening at any given time, eliminating a lot of inaccuracies and growing the potential for bigger profits.
  • Lower costs: Incorporating AI into your warehouse can significantly lower your costs. You’ll be able to have fewer employees, thereby saving on wages, but you’ll also save on other warehouse overheads.

How AI Will Revolutionize the Warehouse

Intelligent, autonomous warehouse technology is already having a huge impact on warehouses around the world. In fact, it’s been predicted that 30% of UK warehousing jobs will become fully automated by 2030. These systems can accurately forecast patterns and simplify information processing so that businesses can better manage their inventory. You’ll no longer have to manually update databases, and mistakes will be greatly reduced.

AI will change how materials move by improving the handling systems and conveyors.  The facility itself, the doors, ramps, and elevators will all collect data leveraging the massive data sets collected. Here are a few ways in which AI will revolutionize the modern warehouse.

  1. Human-driven vehicles (like forklifts) will give way to automated vehicles such as small carts that come equipped with warehouse management software or 3PL systems, or smart trucks that can assist with the surveillance of parcel management.
  2. Warehouse automation robots can be used to automatically stack and store products in a facility; placement can be decided algorithmically, depending on the popularity of each product so that frequently purchased items are easily accessible and items that are bought infrequently are further away.
  3. AI can help predict how much manpower you need at different warehouses and what transport options are required and what routes are available.
  4. Product orders can be automatically validated by intelligent systems, which can also help dispatch the products automatically, track shipments, and follow up with buyer feedback.
  5. It’s inevitable that your warehouse will face unpredictable situations. Because AI thrives on predicting patterns, it can help you prepare contingencies for these situations, giving you ideas for how to manage your inventory and warehouse operations in tricky times.

5 Real World Examples of AI at Work in Warehouses

AI is already increasing the scale of business activity by freeing people up from doing mundane, repetitive work in the warehouse. Many of the world’s biggest companies are already incorporating smart systems and warehouse automation technology to streamline their operations. Here are a few examples:

  1. Online retailer Zappos, which specializes in clothes and shoes, uses KIVA Systems in its center in Shepherdsville, Kentucky, to create a fully automated warehouse that helps them maintain free shipping, a 365-day return policy, and a full-time call center.
  2. British online supermarket Ocado uses highly automated warehouses with robots that unpack inventory, plan and stack shelves, and move goods around the warehouses.
  3. Amazon’s warehouses use AI technology and robots to improve efficiency, predict and prevent problems in the customer journey, and create customized platforms for the warehouse and online store.
  4. Chinese eCommerce retailer Alibaba uses a smart warehousing system where robots do 70% of the work (they can also carry up to 500kgs, far more than any human!). Each robot also has sensors that avoid accidents - and they automatically carry themselves off to a charging station when they’re running low on battery juice.
  5. Coca-Cola’s EMEA warehouse is fully automated by FKI logistics. Smart automation helps them manage 25,224 pallet locations (with a potential for more) and avoid expensive double-handling tasks that slow logistics.

Streamline Your Warehouse Operations with Artificial Intelligence

Artificial intelligence is transforming how the modern warehouse executes its business process. The bottom line is that smart warehouse technology is helping organizations improve their warehouse operations by creating faster, more flexible systems.

Easyship can connect you with over 20 warehouses around the world so that you don’t have to worry about warehousing, allowing you to be more creative and improve your operations.