This past year saw continued growth in warehouse automation, with expanded service offerings, new innovations and ongoing project announcements. But there’s still much to be done to enable operators to take full advantage of the immense amounts of data being collected at every moment of the day within distribution centers. 

Over the past 12 months, the logistics industry has witnessed a combination of mature technologies being broadly deployed, and more sophisticated robotics systems entering warehouses. Currently, however, only the largest players in the retail industry are positioned to fully utilize these new technologies, with smaller organizations only just beginning to adapt to the rapidly evolving environment. 

In 2023, warehouses will modernize by deploying technologies that provide full visibility into DCs and embracing the power of artificial intelligence, while track-and-trace capability will become more widely adopted.

Warehouse visibility applications will continue to increase. Traditionally, the supply chain has been a top-down business model: you could only look at what was being ordered and where orders came from. Professionals had limited visibility in their own warehouses, since information about products was limited to a few points of reference.

Today, this model is more inverted, thanks largely to the fact that enormous amounts of useful data are captured live. Warehouse operators can see the exact flow of inventory as it travels through their facilities, as well as the condition of packages. With this model, supply chain leaders have the ability to see where processes can be improved and where topline data may be inaccurate. As a result, root problems can be corrected immediately, before they evolve into costly issues.

This year will bring the convergence of visibility technologies with robotics systems in warehouses. We'll see more small- to mid-tier DCs embracing tools like AI, camera sensors, RFID, and Bluetooth tags as key components of their automation plans. 

DCs will widely adopt AI. By its nature — advanced, complex, and powerful — AI can elicit hesitancy from logistics companies. It's a big, broad term with considerable variation packed into it. Because of this, many organizations simply assume it's too difficult to use, and steer clear of implementation. 

In truth, AI excels at solving many of the most common problems found in DCs. This is largely thanks to its ability to interpret vast amounts of images as they pass through scan tunnels, in real time, and identify the precise areas where problems occur. What’s more, the solution is easily scalable. AI has been proven to help operations run more smoothly and to highlight inefficiencies. It also helps users adopt other technologies in the warehouse, like robotics.

AI and visibility go hand-in-hand. We've seen many companies go big on their investments in robotics, but little has been deployed in terms of additional technologies that complete the picture of warehouse health.

We'll see more logistics operations integrating AI into their solutions mix in 2023. This is especially true for the mid-tier companies who have been closely following the narrative of larger retailers that have already taken advantage of the technology. In particular, we'll see AI advance with the advent of its edge-to-cloud adoption.

Track and trace will emerge in new sectors. In a similar vein, alongside visibility and AI we'll see the emergence of track-and-trace technologies in 2023. The solution, largely achieved through Bluetooth BLE Beacon Sensors that are low-powered and enable wireless detection and transmission, has already been embraced in sectors such as fashion and apparel. Radio frequency identification (RFID) technology has also begun to emerge, now as small as a postage stamp and capable of tracking products throughout the distribution lifecycle. We'll begin to see both technologies adopted in new industries, to provide even greater insight into the package integrity of products as they travel from origin to last mile.

This will be particularly interesting to watch for the cold supply chain, which must ensure that frozen goods maintain consistent and precise temperatures throughout the entire delivery process.

This year will be the tipping point for many logistics organizations, especially those that seek to remain competitive and keep pace with evolving consumer expectations. It will be interesting to see who joins the evolution, and who will be left behind.

John Dwinell is founder and president of Siena Analytics.