Comment: Adapting logistics for the on-demand economy
With the ongoing steady decline in the health of retail stores over the past few years, more shoppers are heading online instead of to the shops, to buy goods. And now the upsurge in online orders is outpacing the modernization of warehouses. Ultimately, maintaining order volumes is a higher priority than setting out plans to improve processes and proactively innovate.
Expand number of warehouses and/or floorspace
This year, warehouse managers are still struggling to keep up with the consumer demand for online shopping. According to Zebra’s 2024 Warehouse Vision Survey, 64 percent of businesses plan to increase their number of warehouses and 59 percent expect to expand floorspace to meet on-demand economy requirements. This trend is especially prevalent in Europe where the average warehouse is projected to grow by more than a quarter in the next five years. This floorspace expansion is happening more in Europe than in any other region in the world, demonstrating how the success of digital businesses such as eBay, ASOS, Amazon and Ocado – and a whole host of smaller e-commerce start-ups – are a testament to this ongoing retail sector evolution.
According to the survey, 87 percent of warehouse decision makers said they are in the process of or are planning to expand the size of their warehouses by 2024, with 82 percent anticipating an increase in the number of warehouses during this timeframe. Faster delivery to end-customers is the primary factor driving warehouse growth plans. Despite being slow to implement new devices and technology, more than three-quarters (77 percent) of decision makers agree that they need to modernize operations to remain competitive in the on-demand economy.
Both existing and future e-commerce businesses will continue to need vast warehouses and distribution centers to handle all retail online sales and these will be required throughout Europe. To ensure items purchased online can be delivered anywhere quickly, businesses will be increasingly dependent on larger high-tech warehouses and distribution centers.
Adoption of worker augmented solutions is a necessity
In addition to floorspace expansion, investments in automation and worker-augmented solutions will be a key focus for decision makers’ plans during the next five years. More than three-quarters (77 percent) of respondents agree that augmenting workers’ capabilities with technology is the best way to introduce warehouse automation and meet increased order demands.
Over the next five years, IT and operations decision makers will take an incremental approach to modernizing their warehouse operations. The number one priority is improving individual and team productivity, while achieving workflow conformity. By 2024, leaders will shift focus to the integration of more holistic solutions to build data-powered environments that balance labor and automation in the warehouse, ultimately empowering front-line workers with a performance edge to lead the way.
Smart devices and smart glasses coming soon to modern warehouses
A major of survey respondents predict that modernization will be driven by Android™-based mobile computing solutions (83 percent), real-time location systems (RTLS) (55 percent) and full-featured warehouse management systems (WMS) (54 percent). Interestingly, 62 percent of decision makers identified wearable computers such as smart glasses and hip-mounted devices as an area of investment within the next three years.
RFID and locationing technology use are anticipated to increase for outbound operations with 25 percent planning to use them for packing, 20 percent for inventory management and 19 percent for picking. RFID technology helps speed up and streamline logistics by improving inventory visibility by providing real-time updates and faster scanning. For companies that use returnable containers or pallets, RFID can track and manage those items across the supply chain, optimize asset inventory and reduce loss or theft. As well as using technologies like RFID to streamline and manage process through data, decision makers also anticipate using robotics/bots for inbound inventory management (24 percent), outbound packing (22 packing) and goods in/receiving (20 percent) by 2024.
The survey indicates the online shopping boom will continue to drive sustained demand for warehouse space and technology for at least the next five years. Demand remains very strong, and warehouse decision makers will need to maintain a performance edge by using the latest logistics technologies to keep up with orders and remain competitive.
For more information, please visit Zebra’s warehouse vision study.