Warehouse Trends that will Impact your Operations

Patrick Viney, Vice President - Retail Industry Strategy APAC, JDA Software

The Digital Supply Chain Transformation is happening faster than the physical supply chain can react, requiring hybrid solutions in semi-automated environments where humans and robots work side by side. New incentives to modernize operational capabilities should be added that capture efficiencies not achieved previously, while laying the foundation of a digitized supply chain, continuously re- evaluating plans and evolving for optimal performance. Retailers and Manufacturers need to consider the impacts of their omni channel operations in this new paradigm.

This article will review some of the trends that will impact warehouse operations over the coming years.

Higher workforce expectations, especially related to the availability of advanced technology. As technology continues to pervade our daily lives, the warehouse worker will also have renewed expectations of their general working conditions. Interactions with workers will develop along the lines of “app-like” systems.

Automation and robotics will see greater adoption within most warehouses in order to deal with the increased volumes and improvements in efficiencies. E-Commerce is driving service expectations to levels that may not be achieved without the use of high speed picking alternatives to manual operations. Continued innovation has reduced costs of entry for automated capabilities, delivering improved business case justification for automation in many forms. Collaborative robots will be seen working next to their human counterparts.

Regulatory compliance will become more of a focus for emerging markets such as India. Compliance in the form of labour laws as well as compliance to food safety regulations will be become more prevalent in the coming years. As a result, track and trace tools will be increasingly adopted in tomorrow’s warehouses to monitor product movements. These will be critical to both food and pharmaceutical industries.

Compressed order processing times will be required to meet aggressive same-day delivery demands. As e-commerce continues to mature in India we will see customers’ delivery expectations migrate for several days to next day to same day. These expectations will place greater demands on the responsiveness of the supply chain and in particular warehouse operations. To meet this need companies will need to invest in agile warehouse management systems that provide users with the ability to perform operations in real time. Automation will be used to expedite the increased throughput since these systems can perform these tasks much more rapidly than a human.

Customised products continue to accelerate at a rapid pace. Customers increasingly want products that are unique to them and this has seen the emergence of customer specific products. In order to deal with this requirement companies are turning their warehouses into manufacturing or final assembly plants, whereby semi-finished goods are stored awaiting customer orders. At that point, the final processing or customisation is made to the desires of the specific customer and despatched in a timely manner. Technologies such as 3D printing and additive manufacturing are allowing this level of product customisation.

Greater internal and external collaboration will be a key tenet to the running of an efficient and successful warehouse operation. As customers demand greater speed and responsiveness, the fulfilment channel will need to be able to anticipate their needs better and react in real time. This means it will be critical for executives to understand not only what is happening inside the warehouse, but also what is going on outside its four walls. Close collaboration with customers, stores and vendors will need to become the norm. Being aware of inventory levels and re-order points at each retail store will become business-as-usual. This means the warehouse must have advanced visibility, as well as the ability to actually plan and pick inventory in advance, so that employees won’t find themselves in an emergency situation every day. Increased collaboration between all partners of the supply chain will lead to efficiencies in operations and give companies the ability to reduce excess inventory significantly.

Start building the foundation today. Companies face major challenges in optimizing their warehouses for cost and service over the next decade. In order to conquer these and other obstacles to success, it is important to start your preparation today.

Preparation means taking a step back to look at the bigger picture. Think about where your warehouse operations are today, and where they need to be. Then define some specific goals to put some key capabilities in place now. Over a reasonable timeline, define the improvements and investments your business needs to make.

The sweeping changes in the warehousing and distribution industry in the coming years might seem overwhelming. The actions you need to take are too large to tackle at one time, so it is essential to begin acting now and making changes in an incremental fashion. By achieving smaller goals, while working towards a clear vision of the future, you can prepare for your business to emerge as a warehousing leader in the dramatically altered competitive landscape of the next decade.