Warehouses are becoming increasingly more complex according to a report by Zebra Technologies, a company which sells bar code scanners and other technologies. These products allow companies to track and manage their business operations in an efficient manner. In its most simple terms, warehousing is the process of storing materials and filling orders from one end of the supply chain to the other. In response to the growing needs of e-commerce, major changes in labor and technology will be occurring within these warehouses. According to the report, in 2015, it took 60.4 hours to train new staff to “full productivity”, up 26% from 2013. This figure just further demonstrates that companies are already adjusting their supply chains to meet demand for faster delivery by consumers.
A number of issues are detailed in the report as the root causes for changes in supply chain management that differ from the typical increases in volume and throughput. These are as follows:
- More facilities and larger spaces call for high-speed mobile communications both on and off the floor
- Increased customer demand for personalization has driven an increase in the number of stock keeping units, increasing inventory visibility, accuracy, and efficiency needs
- Newly created government regulations require more detailed and accurate product tracking and tracing
- Re-shoring operations brings manufacturing and overall business closer to the customer, which creates a need for more efficient and effective cost and labor management
- Fuel volatility impacts logistics costs
- The growth of omnichannel transactions has created a need for more inventory control and flexibility, as well as more accurate fulfillment
One of the latest trends in warehousing is to invest in voice-directed picking, which are devices that are used in combination with hands-free scanners to give workers verbal instructions. In fact, some 72% of the almost 1,400 logistics professionals surveyed around the world expect to be using these technologies by 2020, which is over double the current figure of 30% usage. Although an attractive prospect, voice picking solutions are usually more costly than traditional barcode standards. However, companies are willing to accept this increased cost because it can improve both productivity and accuracy of their internal supply chains. Companies are also increasingly expecting to open new warehouses rather than expand their old ones. Three quarters of respondents expect to increase the number of their warehouses, which is up from 48% in 2015. This can partially be attributed to the competitive pressure to deliver goods to consumers faster. Companies are now investing in smaller facilities closer to population centers, rather than focusing their investment on larger facilities in traditional logistics hubs.
The report also identified five opportunities for alignment:
- Optimizing storage and the distribution growth network
- Decreasing labor turnover and training time
- Reducing the rate of returns
- Increasing the automation in inbound and outbound handling
- Linking and integrating warehouse systems
Warehouses are no longer just cost centers where the focus is on efficiency and accuracy, but serve as assets that can drive growth for a business by also focusing on inbound, storage, and outbound material handling. In order to plan accordingly for the change, there are a number of changes that warehousing managers should consider. It is important to make sure that IT and Operations managers are on the same page, understand changing wireless needs, and plan for shifts in processes throughout the supply chain. By also evaluating technology alternatives, managing and mitigating risks, and building a ROI model that encompasses both top-line and bottom-line results, warehouses can more easily adapt to change and continue to run smoothly as their growth increases in the upcoming years.