Trends and technologies transforming warehouse operations

Change is nothing new for those in warehousing, distribution and fulfilment. But the pandemic accelerated a number of trends affecting the supply chain, increasing the need to make warehouse operations as agile, automated and resilient as possible.

While the pandemic highlighted how quickly supply chain issues can impact the availability of goods, disruption can occur at any time due to natural disasters, geopolitical tensions, cyberattacks, labour strikes and more. As manufactured products become more complex, supply chains are more prone to interruption. Warehousing decision-makers realise they need to do their part to support these efforts.

Earlier this year, Zebra Technologies commissioned a global research study among decision-makers and warehouse staff to analyse the latest trends and technologies transforming warehouse operations. The study included over 1,500 respondents across manufacturing, retail, transportation, logistics and wholesale distribution organisations.

A Global View of Warehousing

For years, warehouse operators have been adapting to changing consumer habits, growing labour recruitment and productivity challenges, as well as increasingly interconnected supply chains. Fluctuating market conditions and new disruptors are prompting decision-makers to accelerate their plans to improve workforce productivity, responsiveness and agility.

·       80% of decision-makers agree the pandemic prompted faster modernisation.

·       87% plan to accelerate timelines of modernisation projects within three years.

·       61% plan to implement real-time inventory tracking within a year.

·       87% agree new technology is needed to be competitive in the on-demand economy.

The explosion of eCommerce

The need for speed, increasing order and shipping volumes, and consumers’ changing purchase preferences uncovered some key challenges driving them to make changes. The top three challenges highlighted by decision-makers were:

1.               Faster delivery to end customers

2.               Increased transportation costs

3.               Inventory accuracy and visibility

Labour challenges are another significant concern among decision-makers. More than half report finding and training warehouse workers among the biggest challenges their organisation faces with regard to labour, and 85% report they have already prioritised labour optimisation or plan to do so within the next three years.

From 2019 to today

Despite recent challenges, warehouse operators have made progress in several areas they identified as a “priority” in the 2019 Zebra Global Warehousing Vision Study.

With the rise in e-commerce, decision-makers in the current survey ranked returns management as their top operational challenge, along with many fulfilment-related outbound operations. Concerns and priorities in the 2019 survey were more generalised around recruitment, productivity, and utilisation. Today, warehouse operators are focused on identifying their weakest operational areas. This will enable them to prioritise improvements more effectively.

In 2019, nearly a quarter (23%) of respondents managed operations with all paper-based or fixed workstation systems. Decision-makers say that will drop to only 5% within the next five years, and a greater focus will be placed on augmenting workers with mobile devices and automation solutions.

Positive workplace changes have also been noted since 2019. News of short-staffed warehouses and fulfilment centres dominated headlines for over two years. However, it has not caused current warehouse staff to take a negative view of the matter. In the current survey, 82% of warehouse staff say their employers’ difficulties in hiring and retaining labour have prompted improvements. Specifically, they say their employer has:

·                 60% improved working conditions

·                 57% used technology to make work easier

·                 45% increased wages and bonuses

·                 43% provided technology to enable flexible work shifts.

Embracing Technology in New Ways
Decision-makers understand the importance of technology, with 87% confirming the need to implement new technology to stay competitive in the current on-demand economy. While technology investment carries some risk, 82% say their organisations believe investing in automation far outweighs the risk of not implementing it.

With warehouse labour becoming increasingly difficult to attract and retain (decision-makers report it takes an average of 4.7 weeks to train new staff to full productivity), they need a backup plan in case it takes longer than expected, especially during peak periods. Eight in 10 say a greater reliance on automation is in their future. Of those who have already implemented automation or plan to within the next three years, 66% say they are doing so to offset their recruitment challenges.

Employee sentiment is also greatly influenced by the technology their employer provides them, with 83% agreeing they would be more likely to work for an employer that gives associates modern devices versus one that provides older or no devices. Decision-makers concur, with nearly nine in 10 agreeing that technological advancement will make the warehouse environment more attractive to workers. When working with technology, 83% of employees expect the business software applications and hardware devices their employer provides to be as easy to use as their personal smartphones.

Today, in addition to augmenting workers with devices and/or automation, five in 10 say they’re also using sensor or real-time location technology in a targeted or widespread manner to speed up and add more visibility to their operations. Doing so helps them provide the best next move to their workers, as well as more predictive capabilities. By 2027, almost six in 10 plan to utilise real-time visibility.

Key Takeaways

Market Pressures Become Catalysts for Positive Changes: Decision-makers agree they must implement new technologies to be competitive in today’s on-demand economy, accelerating timelines and increasing funding. Front-line workers say positive workplace changes are happening even amid labour shortages. They report improved working conditions and new technology to make their jobs easier, increased wages and bonuses, and more flexible work shifts due to new technologies.

Top Warehouse Challenges: Shipping volumes have increased more than 20% on average for both business-to-business and business-to-consumer orders since 2019. Increased e-commerce activity is challenging decision-makers with unpredictable customer demands, faster delivery times and the need for greater inventory accuracy. Operationally, returns management and several outbound fulfilment-related operations are challenging decision-makers.

Five-Year Technology Outlook for Warehouse Operations: Reducing unnecessary tasks performed by front-line workers is a priority for decision-makers and workers themselves. Both are concerned they will only meet their business objectives if more technology investments are made to improve operations.

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