What the Warehouse Can Learn from Digital Twins and Virtualization on the Factory Floor

The case for using virtual representations and simulated models of the real world in the context of manufacturing has been well-made as digital twins are rapidly becoming a powerful technology on the factory floor. This has largely been due to the proliferation of connected devices in the digital factory and the sophistication of modelling capabilities, but their success is also attributable to the number of valuable use cases that they support. In conjunction with Computer-Aided Design (CAD) programs, digital twins can model goods as they are being produced in real time to provide intelligence and drive further efficiency in the production process, among other benefits. Similarly, with the help of condition-based monitoring Machine-to-Machine (M2M) devices and the Industrial Internet of Things (IoT) technology ecosystem, simulations can provide crucial insight into the status of machine tools and production equipment to enable predictive and, better yet, preventative maintenance. Hexagon’s NCSIMUL software is a leading example of such an application for Computer Numerical Control (CNC) machines.

At a higher level, digital twins can also be used to simulate production processes and create virtual models that can be digitally manipulated for all connected machines, tools, and equipment on the physical factory floor. This enables factory owners to configure and reconfigure production lines in ways that maximize efficiency, increase asset utilization, prevent downtime and drive flexibility at the configuration layer. ABI Research forecasts this use case to be worth over $4 billion in the manufacturing industry by 2030. But this kind of application has diverse appeal beyond the factory floor, including in Smart Cities—see Smart Cities and Digital Twins: Designing and Managing Urban Industrial Systems (IN-5446) and also in the supply chain, where smart warehouses can benefit immensely.

The comparisons between the factory floor and the automated warehouse are becoming increasingly obvious, leading to the growing trend of warehouse operators borrowing strategies directly from the manufacturer’s playbook. It is no surprise that companies such as FlexSim are therefore selling plant virtualization solutions to factory owners and warehouse operators alike. While the factory leads the way in adopting digital twins and virtualization tools, we can certainly expect warehouses to follow suit as the potential for returns improves in a market where supply chain efficiency is becoming front and center of any retail, production or logistics operation.

It’s worth noting that the general concept of warehouse simulation is nothing new. Many facilities have been using software for decades to digitally mock up layouts and maximize basic efficiency in largely manual or basic automated environments using visualizations. As the stakes become higher in the smart warehouse and the diversity and complexity of technology increases, the need for more advanced modelling and complex virtualization of warehouse equipment and operations is becoming apparent. In the context of a warehouse, where the velocity and precision of material handling and machine downtime are now critical concerns, digital twins and modeling capabilities can allow operators to trial and test new layouts, equipment, and processes far more accurately in a virtualized software application.

In recent years, warehouse automation has been going beyond basic conveyor systems and Automated Storage and Retrieval Systems (AS/RS) as distribution centers and fulfillment facilities adopt various mobile robots, truck loaders/unloaders, and automated packing machines, all of which add greater complexity in terms of configuration and optimization. A sign of the complexity ahead is perfectly demonstrated by the upcoming launch of Bastian Solutions’ Robotic Shuttle System, a hybrid AS/RS and Autonomous Mobile Robot (AMR) that can operate within AS/RS retrieval racks or freely across the shop floor. The growing number of robots in warehouses generally is also adding integration complexity, meaning the existing Warehouse Management System (WMS) suite will struggle to optimize as is required in the age of same-day delivery, Stock Keeping Unit (SKU) proliferation and shifting product lines, which typifies modern material handling.

One of the key value propositions of using a digital twin for warehouse operations planning is the ability to digitally trial new procedures, workflows, and processes and simulate the outcome, using Key Performance Indicators (KPIs) to assess the benefit. With seasonal peaks heavily impacting the profitability and efficiency of fulfillment and distribution centers, using modelling tools to make a cost/benefit analysis of scaling operations up or down or reconfiguring the complex network of material handling equipment is a major advantage.

This need for flexibility is one area in which scalable AGVs and AMRs possess a major advantage over fixed automation that requires heavy, bolted down infrastructure. If digital twins can be leveraged to make the reconfiguration of automated material handling systems more manageable, or at least offer foresight into the outcome, it can ultimately increase the Return on Investment (ROI) of these systems by deploying them more effectively.

More sophisticated simulation and virtualization in warehousing represents a major potential opportunity for multiple stakeholders in the supply chain technology ecosystem. In recent years, more and more distribution and fulfillment centers have been adopting Warehouse Execution Systems (WES), applications that can complement the standard functionality of the Warehouse Management System (WMS) by applying orchestration capabilities and real-time dynamic optimization to the flow of goods through a facility by applying rich data analytics, Artificial Intelligence (AI) and machine learning. For the WMS software vendors that offer these capabilities, integrating virtualization and digital twin functionality into their suite of applications is a logical extension of functionality since there is a clear overlap with these existing applications.

The material handling systems integrators can also make a major play into the virtualization software market. Already, the likes of Bastian Solutions, Dematic, and Honeywell Intelligrated offer basic digital twins within the Warehouse Control System (WCS) software that drives the automation systems they deploy. The growing variety of mobile and gripping robotics in the warehousing market is already forcing these companies to take a hardware agnostic approach. Even though many of them manufacture their own conveyors, shuttles, and bots, they are increasingly relying on their suites of software to differentiate. Honeywell Intelligrated, for example, uses its IoT platform as a key asset it leverages to stand out from competitors. These systems integrators, who are dominating the warehouse automation market, could further cement their position in the warehouse technology ecosystem by providing next-generation virtualization and simulation tools to their existing suites. Again, there is precedent to do so based on their existing complementary applications and services and their ability to integrate the IoT ecosystem.

Following cues from the manufacturing sector, warehouses can and will use digital twins and more complex modeling to drive flexibility and efficiency within facilities and take advantage of IoT. This creates enormous opportunity for warehouse operators and technology vendors alike, providing they develop clear strategies that integrate adjacent applications where possible and deliver true value beyond simple visualization.

This ABI Insight is part of ABI Research's Intelligent Supply Chain and Industrial Solution Coverage.