<h3>Increasing Complexity in Warehouse Logistics</h3>
<p>We see increasingly complex flows in <strong>warehouse logistics</strong>, including several automation solutions, conveyor systems, and packing machines. It is extremely difficult to predict how these will work in practice and what the consequences will be with increased flow. How much growth can the solution handle before bottlenecks begin to appear? These are critical questions for heavy investments like this.</p>
<h3>Rise of Simulation Tools</h3>
<p>Because of the increased complexity I describe above, <strong>simulation tools</strong> are becoming more common. Companies cannot take chances and make expensive investments without some sort of guarantees regarding capacity and eventual growth.</p>
<h3>Testing Solutions in Procurement Phase</h3>
<p>In the procurement phase, you may be choosing from several different solutions. With simulation tools, you can test the different solutions and see what suits your warehouse operations best.</p>
<h3>Decision Support in Volatile Times</h3>
<p>In these volatile times with new customer behaviors like the explosion of <strong>e-commerce</strong> and <strong>e-grocery</strong>, you need all the decision support you can get in warehouse logistics. If the pace of growth in e-commerce persists, wouldn’t it be great if you already simulated an increased capacity plan you know works? Being able to simulate to predict future bottlenecks allows you to focus and prioritize investments and projects.</p>
<h3>Simulating Future Staffing Needs</h3>
<p>You can also simulate future staffing needs and different scenarios. For example, what happens if the order flow peaks two hours later in the day? In this way, you can plan the warehouse operations better and calculate eventual changes in costs.</p>
<h3>Benefits of Simulation in Manual Warehouses</h3>
<p>Manual warehouses can also benefit from simulation. If you are too rigid with ABC optimization, you risk bottlenecks and crowding in aisles with high-frequency goods. Your optimization becomes counterproductive. With simulation, you can “tweak” the flow until you find the right balance. This applies not only to the outbound flow but also to the inbound flow.</p>
<h3>Evaluating AGV and STV Technologies</h3>
<p><strong>AGV</strong> and <strong>STV</strong> are relatively new technologies that many are interested in but few have experience with. With simulation, you can see how many units you would need to achieve the desired efficiency and at what cost. In this way, the reluctance to invest in innovations is reduced.</p>
<h3>Simulation as a Standard Practice</h3>
<p>I am sure simulation will become more or less standard when developing warehouse logistics in the near future. Warehouse logistics will become more complex and, at the same time, an important margin enhancer, not only in e-commerce and e-grocery. I am sure more suppliers of warehouse automation and software will offer this technology to customers as a service. It would benefit both suppliers and customers to feel safe in their decision-making regarding solutions.</p>
<h3>Importance of Data and Tools in Decision-Making</h3>
<p>Warehouse logistics are too important for companies to control with gut feelings and estimates. However, I still meet people who think you can make professional decisions with only experience and some data in an Excel file. I always refer to <strong>Daniel Kahneman</strong>, psychologist and economist who has been awarded the Nobel Memorial Prize in Economic Sciences. In his book &#8220;Thinking, Fast and Slow,&#8221; he writes that humans cannot think statistically. Even if you have worked with statistical data your whole life, our brains are not developed for that. This is why we need all the tools we can get, like simulation software, when making important investments regarding complex warehouse logistics.</p>
<p><strong>Roberth Karlsson</strong></p>

The growing importance of warehouse simulation
