What is Intralogistics? Definition and Benefits

In modern warehousing, intralogistics, often referred to as internal or warehouse logistics, stands at the forefront of supply chain management solutions. It integrates advanced technology, like AI and automation, into the internal processes that take place within a warehouse, distribution center, or manufacturing plant, focusing on the movement, storage, and handling of goods and materials.

Becoming a cornerstone of Logistics 4.0, intralogistics has emerged as a key trend in 2024 fueled by the digitization boom within warehousing. With 75% of industry leaders predicted to adopt intralogistics by 2026, particularly in the form of smart robots, intralogistics is essential for organizations to optimize their operations and stay competitive in today’s industrial landscape.

Intralogistics can be defined by three key elements:

• Material flow: This includes the movement of goods and materials,  including receiving, storage, picking, packing, and shipping. For internal logistics optimization, enhancing material flow by leveraging advanced technologies minimizes bottlenecks and maximizes throughput in material handling processes. 

• Data Management: By harnessing data intelligence and leveraging big data analytics, organizations can gain valuable insights into their internal logistics processes. This includes information about inventory levels, order statuses, equipment performance, and more. 

• Warehouse Management: Warehouse management encompasses the overall coordination and control of warehouse operations, including tasks like inventory management, space utilization, order fulfillment, and labor allocation. A robust WMS can improve inventory accuracy and enhance order fulfillment speed to meet changing market demands.

As we dive deeper into the importance of intralogistics, we’ll uncover everything you need to know about the fundamentals and benefits of optimizing internal processes that are driving warehousing trends in 2024.

Industries Leveraging Intralogistics

Several industries are already reaping the benefits of advanced intralogistic solutions, two industries have stood out as leaders in leveraging intralogistics.

1. Manufacturing

In manufacturing, intralogistics seamlessly blends technology and material movement within a facility, boosting productivity. By integrating automation and advanced logistics solutions, manufacturers can optimize their intralogistics operations to stay competitive.

Consider a manufacturing facility producing electronic devices. In this case, intralogistics involves the seamless movement of material flow from raw components to finished goods using advanced automation and analytics. This may include the coordination of chips, circuit boards, and casings from inventory to production lines and then to shipping as a finished product. 

2. Third-Party Logistics (3PLs)

Third-party logistics companies (3PLs) are another industry that’s leveraging intralogistics to optimize their warehousing and distribution operations, ensuring efficient movement and storage of goods for their clients. In fact, warehouse management systems (WMS), a key component of intralogistics, became the most widely adopted technology for 3PLs, with a staggering 87% adoption rate in 2022.

Why Does Intralogistics Matter?

Intralogistics is the backbone of efficient operations, with process optimization and automated intralogistics playing key roles in its enhancement.

Process Optimization and Automation

Process optimization focuses on refining workflows to speed up delivery times and minimize delays. By leveraging automation, such as robotic systems and automated material handling systems, businesses can reduce costs, boost safety, and meet customer demands more effectively.

Automation further enhances intralogistics by reducing reliance on manual labor and enabling the use of advanced technologies to improve performance. In fact, according to ABI Research, over 4 million commercial robots will be deployed in 50,000 warehouses in just a year, up from less than 4,000 in 2018. Giants like FedEx and DHL are already leading the charge, deploying AI-powered sorting robots to supercharge their processes. 

In addition, a recent study conducted by Salesforce found that:

• 90% of workers found automation boosted their productivity
• 85% felt that automation facilitated better cross-team collaboration
• 90% trust automation to improve accuracy and help teams make better decisions

Components of Intralogistics

1. Warehouse Management Software (WMS)

Warehouse management software (WMS) facilitates the management and control of various intralogistics tasks, such as monitoring stock levels to avoid overstock, optimizing storage space, and coordinating tasks such as picking and packing. This enables companies to streamline their intralogistics processes, especially when coupled with automation.

Warehouse management software has been shown to: 

• Increase storage capacity by up to 40%
• Decrease handling operations by up to 30%
• Eliminate errors by up to 99%

A key example is DHL, which provides warehouse management systems to clients and uses in its own facility to see real-time inventory levels and gain insight into operational efficiency for order fulfillment. 

2. Cobots

Cobots play a crucial role in automating intralogistics processes while maintaining a collaborative and adaptable work environment. They are designed to work alongside humans ​​in various repetitive tasks, such as picking, packing, and palletizing. 

Their ability to free up human workers to focus on more complex activities enhances safety, reduces labor costs, and optimizes workflow in intralogistics operations. In fact, it’s been shown that human-cobot teams are 85% more productive than teams composed of just robots or just humans. 

3. Autonomous Vehicles

Autonomous vehicles, which include automated guided vehicles (AGVs) and autonomous mobile robots (AMRs), are revolutionizing intralogistics by automating the movement of goods within facilities.  

AGVs follow predetermined tracks, such as magnetic tape or laser navigation, to autonomously transport goods. On the other hand, AMRs use complex artificial intelligence and machine learning to navigate more dynamic environments, performing tasks such as picking, transporting, and storing items with minimal human intervention. While different in terms of their flexibility and intelligence,  deploying allows companies to automate repetitive hauling tasks and boost productivity.

For instance, companies like Amazon have been leading the charge by deploying 750,000 AGVs to transport goods across its facilities. In turn, this has enabled the company to expedite material and package transport, contributing to customer service offerings, like same day delivery.

Learn more: What are the Differences Between AGVs, AS/RS, and AMRs 

4. Storage Handling Systems

Storage handling systems are another key automation solution in intralogistics, providing the infrastructure needed to organize, store, and retrieve goods.

These systems include automated storage and retrieval systems (AS/RS), pallet racks, and shelving units, which often use robotic arms and computerized controls to enable facilities to accurately manage large volumes of inventory.

AS/RS have been shown to:

• Save up to 85% of storage space
• Cut manual labor requirements by 2/3 
• Improve pick accuracy by 99%

Commonly coupled with other storage systems and material handling equipment, such as conveyors and pallet racks, AS/RS solutions allow businesses to better manage the growing demands of both e-commerce and omnichannel retail.

5. Additional IIoT Technologies

Industrial IoT has additionally driven the enhancement of intralogistic capabilities by integrating sensors, systems, and smart devices that collect and transmit data in real time into industrial environments. In turn, this technology has facilitated connectivity and communication among different components of intralogistics. 

A common example of IIoT technology in warehouses is through RFID tracking, which uses radio frequency identification tracking to scan parcels before shipping. Companies like Walmart have implemented this technology in its warehouses to track inventory levels and monitor the movement of goods, contributing to a smarter supply chain.

What are the Key Benefits of Intralogistics?

Greater Efficiency

Optimizing intralogistics allow companies to streamline internal processes and optimize resource allocation. By minimizing delays and reducing manual tasks, intralogistics ultimately enhances efficiency and throughput in facilities. 

As explored, these solutions encompass a wide range of strategies, from warehouse management systems to autonomous vehicles, all aimed at improving operational performance. For instance, warehouses that deploy AGVs can see upwards of a 50-70% gain in efficiency.

Reduced Labor Needs

According to Descartes, 76% of today’s supply chain operations are being impacted by labor shortages. In addition, labor costs constitute 65% of a warehouse's budget. With rising labor costs and the struggle to attract and retain workers, optimizing intralogistics through automation emerges as a key solution to alleviating these challenges.

By using technology like automated systems, businesses can use automation to take on repetitive tasks and transport routes, reallocating workers to higher value tasks. It's been shown that autonomous vehicles, in particular, can free up an estimated 30-50% of a worker's time.

Imagine what workers can do with that extra time. 

Increased Accuracy

Advanced technology enables organizations to increase accuracy in their internal processes by minimizing human errors in tasks like order picking and inventory management. As already explored with RFID tracking, systems like these along with  pick-to-light and pick-to-voice technologies can reduce picking errors by 67%. 

Lower Operational Costs

By leveraging innovative technologies and process optimization techniques, businesses can achieve substantial cost savings in areas such as labor, inventory management, and facility maintenance, while still maintaining high levels of productivity and quality.

Automation, in particular, has the potential to reduce operational costs by over 55%, reducing the reliance on manual labor and minimizing wasteful practices.

Better Customer Experience

By improving efficiency, accuracy, and responsiveness in logistical operations, businesses can enhance the overall satisfaction of their customers. For instance, accelerating the processing and fulfillment of orders results in reduced lead times and expedited delivery, aligning with customer expectations for enhanced service quality.

Additionally, heightened precision in inventory management minimizes errors and eliminates stockouts, guaranteeing timely and accurate delivery of products to customers. By meeting the demand for fast and reliable service, businesses can build greater trust and loyalty.

Trends in Intralogistics for 2024

1. Smart Factories

The global smart factory market was valued at 129.74 billion in 2022 and is expected to grow to an impressive 321.98 billion by 2032. The rise of smart factories can be attributed to technological advancements in the internet of things (IoT), artificial intelligence, and data analytics, marking the shift into the Fourth Industrial Revolution (4IR). 

Smart factories optimize intralogistics processes by enabling real-time monitoring, predictive maintenance, and adaptive manufacturing. This trend facilitates seamless communication and coordination between various components of the production process.

For instance, we can look at BMW who deployed humanoid robots in its manufacturing plant to support its workforce by taking on physically demanding tasks. In addition, the company also utilizes digital twin technology and virtual reality (VR) to visualize its facilities layout and identify potential areas for optimization. 

2. Automation-as-a-Service

In recent years, the “as-a-service” model has become increasingly popular, allowing organizations to follow a subscription-based model for a piece of technology. As a result, Automation-as-a-Service (AaaS), has become a notable trend influencing warehouse operations today. 

AaaS providers offer on-demand access to advanced automation technologies, allowing businesses to scale operations efficiently and cost-effectively. For instance, 78% of organizations using AaaS for robotic process automation (RPA) and cognitive computing are expected to scale their operations within three years. As businesses increasingly adopt AaaS models, they unlock new opportunities for agility and innovation within intralogistics. 

3. Augmented Reality (AR)

Augmented reality (AR) applications, such as smart glasses and mobile devices, are being driven by increased industrial IoT solutions, enhancing efficiency and accuracy in intralogistics. AR overlays digital information onto the physical workspace, providing real-time guidance and visualization to warehouse workers. They give workers access to critical information hands-free, improving productivity and reducing errors. In fact, it's been shown that companies using AR see a productivity improvement of 32%, as well as a 46% reduction in time to complete tasks.

4. Big Data

This year, the big data market is expected to reach $349.6 billion and is predicted to grow to $924.39 billion by 2032. Today, warehouses and distribution centers are harnessing big data to analyze vast amounts of operational data, uncovering patterns, trends, and correlations to optimize intralogistics processes. This includes enhancing inventory visibility, forecasting demand more accurately, and proactively addressing supply chain disruptions.

According to MIT Sloan Management Review, an impressive 92% of leaders say their company receives measurable value from data analytics.

Discover the Power of Modern Intralogistics with Cyngn

As explored, autonomous vehicles have the ability to transform intralogistics. At Cyngn, our self-driving AMRs help to strengthen internal processes by facilitating smooth and efficient material transport. Our DriveMod-enabled BYD Forklift, Motrec Tugger, and Columbia Stockchaser can make intelligent, real-time decisions, allowing organizations to minimize safety risks and optimize workflows. 

Cyngn has found that with DriveMod, organizations can:

• Increase workplace efficiency by 33%
• Reduce labor costs up to 64%
• Autonomously haul and transport thousands of pounds

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