AR is Changing the Warehouse Game— Here’s How

Imagine running a busy business where hundreds of orders pour in daily, and the warehouse team works tirelessly to ship them out on time. Yet, finding the right stock from the pile takes too long, dealing with frequent returns is a pain, and achieving near-perfect order accuracy feels out of reach. These challenges are more than just frustrating–they’re costly.

Order processing errors usually occur in warehouses, where orders are picked, packed, and retrieved for shipment to the customers. To minimize errors and speed up order management, business owners are turning to smart solutions for their warehouse operations.

One promising option is the use of augmented reality (AR) technology in warehouse management. Sounds like a big leap? It’s actually far from being a futuristic concept. In reality, many companies have been using AR for years with impressive results. In this article, we will explore:

• The challenges with the current warehouse logistics

• The cost of warehouse errors

• Augmentation and automation in warehouses

• How AR technology improves warehouse operations

• Key considerations in implementing AR

• The best pick for smart glasses
  

  
  

Challenges in Warehouse Management

Managing warehouse operations comes with its own set of challenges, as it involves equipment, people, and management of orders and inventory. Each component presents unique obstacles that, if left unaddressed, can lead to significant revenue losses.

Equipment-related challenges

• Poor warehouse layouts that waste space and resources
• Delays caused by malfunctioning or outdated equipment

People-related challenges

• Labor-related issues due to high turnover, lack of skilled workers, and insufficient training
• Safety concerns such as workplace accidents due to improper handling of equipment or unsafe practices

Challenges in order management process

• A worker picking the wrong item/SKU or collecting the wrong quantity

• Mislabeled products or failing to use updated barcode system

• Stock misplacement, leading to delays in retrieval

• Errors in inventory counts or failure to update inventory records accurately

• Miscommunication among staff regarding priority orders, resulting in delays or mistakes

  
  

When it comes down to it, all of these are essentially human errors. Among these challenges, picking the wrong item or order quantity is one of the most frequent issues faced by warehouse facilities. While it may be a common occurrence, such errors can result in significant financial losses and even harm a company’s reputation.

The Cost of Human Error in Warehouses

The average picking error rate in a distribution facility or warehouse ranges from 1 to 3%.  This may seem like a small figure, but imagine: if one to three out of a hundred orders were returned and had to be sorted out, it may cause a dent in the warehouse’s productivity rate. The additional time and resources to fix mistakes in processing orders and labeling can lead to increased operational and labor costs.

Even more concerning is the potential loss of customers due to a single mispick. Incorrect orders or delayed shipments not only result in high return rates but can also tarnish a business's reputation among consumers. Additionally, canceled orders from dissatisfied customers can directly cut into sales, further highlighting the cost of human error in warehouse operations.

Augmentation and Automation in Warehouses

To err is human, yes, but implementing a streamlined process is a smart business strategy. That’s why more business owners are planning to integrate automation and workforce augmentation into their warehouse management system. For reference, Zebra outlined levels of operational processes in warehouses in terms of automation and human labor:

• No augmentation: all paper-based or fixed workstation systems
• Partial augmentation: some workers are equipped with mobile devices
• Full augmentation: most workers are equipped with mobile devices
• Full augmentation plus: augmented workforce collaborates with some automation
• Partial facility automation: no worker involvement in specific workflows
• Full facility automation: no worker involvement in entire facility

While it may take time to achieve partial or full facility automation, most warehouse decision-makers and associates agree that adopting technology and automation will help increase the productivity rate of warehouse workers.

According to a study by Zebra in 2023, 73% of the key decision-makers in the warehouse sector identified providing workers with user-friendly technology devices or solutions as a top priority. When asked about their five-year device implementation plans, wearables emerged as one of the top devices that they want to invest in, along with handheld mobile computers with built-in barcode scanners, mobile printers, rugged scanners, rugged tablets, and vehicle-mount computers.

And speaking of wearables, smart glasses equipped with AR technology have been one of the most sought-after technologies.

The Basics of AR

Before we explore how AR technology improves warehouse operations, let’s take a look at what AR is and how it differs from Virtual Reality (VR) technology.

If you’re imagining a worker wearing a headset to experience a fully virtual warehouse while being completely detached from the real world, you’re confusing AR with VR technology. VR moves the user away from reality. It replaces the vision of the user and fully immerses them in the virtual world. On the other hand, AR, from the word itself, augments reality by overlaying information over what your eyes perceive. AR allows overlaying of virtual objects in real-world environments through videos, photos, sound, infographics, and other elements.

To better understand the distinction between AR and VR, here’s a side-by-side comparison highlighting their key differences:

AR has three key components:

• Input devices: Sensors capture information from the real-world environment
• Processing: Software tools like image registration and 3D modeling process the data to merge virtual elements into the real environment seamlessly
• Output: The augmented elements are shown on devices like AR glasses and smartphones, merging the digital elements and physical world

Now that you know the basics of AR, let’s explore the key applications of the technology in warehouses.

Enhancing Warehouse Management with AR

Most of the challenges in warehouse management stem from human errors in processing orders, as well as limitations within the workforce, such as lack of skilled personnel and insufficient training. AR technology offers a powerful solution, with its key applications focusing on improving order picking, streamlining inventory management, and providing immersive training programs for the workers.

1. Order Fulfillment and Picking

One of the most labor-intensive and error-prone tasks in warehouses is the picking process. It usually takes a lot of time for workers to search for the right item, refer to the list of orders for the correct quantity, pack the order, put a label on the parcel, update the inventory list, and place the item in the designated place for retrieval and shipping.

Through AR-enabled smart glasses that display real-time visual cues for optimal routes, workers can find the location of the items in the warehouse efficiently. Aside from reducing the time spent locating the items, smart glasses can also minimize picking errors by providing detailed product information (SKU, quantity, expiration dates, etc.) into the user’s field of view. It also allows a pick-by-vision solution of picking items through hands-free barcode scanning, improving efficiency and safety.

Not too long ago, DHL conducted a pilot project in a warehouse in the Netherlands, testing smart glasses and AR technology. The warehouse worker was equipped with Google Glass and Vuzix M100 geared with Ubimax’s xPick software. The staff member was guided through the warehouse facility by graphics overlaid on the smart glasses. Although no hand-held barcode scanners and paper pick lists were used throughout, the pilot resulted in a 25% efficiency increase in the order fulfillment and picking process. Since then, DHL has been using AR-equipped smart glasses in their warehouse management.

“Vision picking is another example of digital transformation in the warehouse. As managers and companies look to drive revenue and control costs, vision picking can play a key role. By helping warehouse workers with finding, picking, and loading the right products faster, companies can see top-line growth. Meanwhile, by ensuring that the right products are going to the right customers, companies mitigate the chances of product returns and dissatisfied customers. Given these benefits, vision picking can become a key competitive advantage."

- Ramon T. Llamas, Research Director, IDC's Augmented and Virtual Reality team

2. Inventory Management

AR-powered devices can simplify long, repetitive tasks like data entry in inventory management. Since these tools can scan barcodes and RFID tags and display information about the items, it reduces the likelihood of manual errors.

Real-time inventory counts just by scanning the items through smart glasses can make demand forecasts and stock replenishment much easier. With AR technology, warehouse managers can easily identify low-stock items and access accurate demand forecasts all through real-time data displayed at their fingertips. This allows business owners to make strategic business decisions faster.

3. Training and Onboarding

The time spent on training new hires in warehouses ranges from hours to months, depending on the size of the facility and industry. In a labor-intensive environment, training new employees is a challenging process.

With AR technology, new workers can experience immersive training through simulations of real-world warehouse scenarios. Virtual overlays on smart devices provide step-by-step procedural instructions, safety guidelines, and troubleshooting tips. This approach shortens the learning curve and helps reduce turnover rates without compromising the effectiveness of the training.

4. Warehouse Planning

Operational efficiency in the warehouse starts with effective layout planning. By overlaying virtual models onto the physical environment, AR can help warehouse managers visualize space configurations and decide on the optimal placement of items and equipment with ease.

Key Considerations in Implementing AR Solution

Purchasing AR tools is not a decision to make on a whim. It requires thorough planning and taking a careful look at your current warehouse system to make sure that the technology aligns with your operational needs. Here are the key considerations for successfully implementing AR solutions in warehouse management:

• Compatibility with existing systems: Make sure that AR solutions can seamlessly be integrated with your enterprise resource planning (ERP) and inventory management software for synchronized operations.

  
  

• Equipment requirements: Choose the right hardware that suits your warehouse needs, such as AR glasses or headsets.

  
  

• Network infrastructure: Make sure your warehouse facility has a reliable network system for real-time data transmission and uninterrupted operations.

  
  

• Training and user adoption: Choose AR tools with intuitive interfaces for easy implementation.

  
  

• Scalability and customization: Look for AR tools that allow customization to fit your specific workflows and inventory structure.

  
  

• Cost vs. ROI: Evaluate the potential cost savings from AR adoption in the long term against the upfront costs of AR tools, software licenses, etc.

  
  

• Performance metrics: Identify your KPIs (such as order accuracy, picking speed, and productivity rate) to assess the effectiveness of AR implementation.

Smart Glasses: What’s the Best Pick?

The AR smart glasses market is expected to grow alongside the broader expansion of the wearable technology market. There are numerous smart glasses that are making the rounds on tech-related articles and forums depending on their application and specifications.

For example, Vuzix M4000 smart glasses (which come with either a ruggedized, all-weather kit for any conditions or an extended wear kit for indoor or standard-condition outdoor use) have a wide 28° field of view, giving the user an immersive experience through an expansive virtual screen that still allows them to totally see their physical environment. Meanwhile, Vuzix Z100 smart glasses are known for their ultralightweight, 48-hour single-charge use battery life, and see-through waveguide display features.

Iristick.G2 smart glasses, equipped with an optimized 16MP central camera, extended field of view, and 6x optimal zoom lens, can guide the user through audio and visual cues and allow pick-by-vision and hands-free remote assistance.

Get AR-Ready with BoxHero

AR technology has been reshaping warehouse management for the better. It reduces order processing errors, enables real-time inventory counts, offers immersive training experiences for the workers, and assists in optimal warehouse layout planning.

Considering AR for your warehouse? Discover how BoxHero’s inventory management features, like barcode generation, real-time inventory tracking, and analytics can lay the foundation for smooth AR integration.

Sign up today for a free trial and see how BoxHero’s tools complement AR technology for increased productivity in your warehouse management.