Part of being successful in the supply chain industry is forecasting and planning ahead. Warehouse leaders should already be in tow and know what next year will bring in terms of technology, systems and other new innovations. This helps in preparations and planning ahead in order to have operations that meet the expectations and demands.
Let’s explore some of the predictions and possibilities that might take place in warehousing in the year 2018.
New warehousing realities
Warehouse professionals currently deal with a whole lot of changes in the scheme of warehouses, distribution centres and generally supply chain operations as a whole. This is a factor that will less likely change and will still be the case in 2018. These changes include
- More facilities and larger spaces that demand high-speed mobile communications virtually everywhere on or off the floor
- An increase in the number of SKUs, leading to increased inventory visibility, accuracy and efficiency needs in order to meet customer personalization demands
- New regulations call for more accurate product tracking and tracing
- Increased need for inventory control, flexibility and faster, more accurate fulfilment due to the growth of omnichannel transactions
- More focus on fuel cost volatility as it impacts logistics and much more
These are all factors that will stress the need to convert warehouses and distribution centres into assets for competitive differentiation.
A lot of changes and challenges will be influencing the industry over the next five years and warehouse operations along with IT professionals need to find a way to respond to these positively. Warehousing in 2018 is set to grow more complex, becoming more than about storing materials and filling orders from one end of the supply chain to the other. This means that there will be significant pressures from multiple internal and external sources.
The global recession made immense changes to the industry. Major cuts were made in efforts to free up capital, adding capacity was no longer a priority and expansion of existing or construction of new warehouses and distribution centres came to a stop. However, now as the economy grows, warehouse operations are following suit again and are growing too. This growth is also accompanied by issues that will cause transformation that goes beyond simple increases in volume and material.
Streamlining to flawless fulfilment
Warehouse professionals have started to re-evaluate their capabilities across all their major warehouse processes as they are starting to face increasing pressure to deliver more top – and bottom-line value. The goal for the coming year will be flawless fulfilment, which will beckon the need for a pragmatic, workflow-driven analysis of how management wants to run the warehouse. The technology keys are increased flexibility, automation, integration and real-time access to the WMS with purpose-built, yet adaptable, solutions that can demonstrate lasting value in the face of changing demands. The high cost and error prone opportunities of order picking and filling will still make it top investment priority. There will also be a continued search that seeks for increased efficiency, accuracy and productivity requiring a more holistic workflow and process evaluation in the warehouse environment.
Pick and fill
The picking and replenishment processes – which can account for up to 70% of operating costs in a warehouse – remain the top priority for warehouse professionals to address with advanced technology solutions. With the industry trying to reduce pick and fill costs and increase worker efficiency and productivity, it is turning to innovative processes, such as task interleaving, and innovative mobile technology, increasingly using wearable, vehicle-mounted and handheld devices capable of multimodal operation.
An evolution from cost centre to growth area
What steps should an organisation be considering in response to the major changes that will impact warehousing operations today and in the next five years? The time to start is now, and the best way to begin is by carefully analysing the issues and evaluating the steps to be taken to help warehouses increase productivity while decreasing costs.
As customer satisfaction and supply chain efficiency become more important drivers of warehousing operations, the industry is re-examining its perceptions of the business. Fewer organisations continue to view warehouses and DCs simply as commoditised links between endpoints of the supply chain. Senior business executives across all market segments can no longer afford to simplistically look at warehouses as necessary evils that are fundamentally cost centres.
Increasingly, industry professionals are viewing warehouses and distribution facilities as historically underleveraged centres that can drive competitive differentiation and, by doing so, increase profitable growth. This reshaped vision of warehouse operations as a fundamental driver of top-line and bottom-line business value, points the way to achieving the ultimate objective of flawless fulfilment.
Are you currently up to date with what to expect this very year? If not, see What To Expect In 2017 For Supply Chains!