New Report Shows Automation Critical to Stability, Predictability in Warehouse Operations
July 12, 2022
Warehouses and distribution centers (DCs) have traditionally been labor-intensive operations, relying on vast numbers of employees to load and unload freight carriers, stack or tear down pallets of items, sort or route packages, or place/pull inventory from shelving. Regularly located in rural areas near common carrier transportation hubs, the throughput or capacity of these operations over the past few decades has been, for the most part, predictable and shaped by long-term, recurring holiday and event-based changes in consumer demand.
According to a new report recently released by Futurum Research, however, this is no longer the case. Several different forces have disrupted the traditional warehouse and DC model. Through independent investigation and firsthand conversations with a select group of industry leaders, the researchers found that past predictable demand cycles centered around holidays and “peak seasons” of consumer demand have given way to a model where any month, week or even day can be a “holiday” — with all the stress and fluctuations of a season compressed into a much shorter period.
Challenges created by recent disruptions may be here to stay
It’s hard to overestimate the long-term disruptive impacts of the ongoing pandemic, global trade issues and regional conflicts. Even before the pandemic, trade issues and increased tariffs had led to higher costs of many goods and resulting changes in both supply and demand as businesses looked to minimize risk by re-sourcing products and diversifying their supply chains.
Some of the major factors that continue to disrupt warehouse and DC operations today include:
- The Increasingly Digital Consumer — The pandemic fundamentally changed consumer purchasing behavior, disrupting the traditional distribution model between manufacturer and consumer. As a result, many warehouse and DC locations and capacity configurations are no longer ideal or optimal.
- Changing Consumer Preferences — Significant changes to what, how much and how often consumers purchase demand new levels of flexibility and agility from the traditional warehouse model.
- Supply Chain Shortages — The global supply chain is stressed like never before, from shortages in semiconductors to the backlog of cargo ships waiting to dock at ports due to COVID-19 restrictions. In fact, supply chain shortages have even impacted the availability of warehouse automation solutions themselves.
- Staffing Issues — The Great Resignation of 2021 has intensified long-term staffing challenges from before the pandemic. There simply aren’t enough available candidates to meet operators’ needs.
- The Flattened Holiday Curve — Online consumer models have altered the traditional holiday/event-driven sales cycle. Consumers now start the seasonal sales process sooner, resulting in an extended, slightly flattened curve — driving similar changes to warehouse throughput and staffing requirements.
- Next-day/Same-day Delivery — Changing delivery demands have forced many operators to transition from larger, remote facilities to smaller, more distributed facilities closer to customers, including very small and specialized micro-DCs in urban or suburban communities.
Automation is becoming “a matter of survival”
Like many industries today, warehouse and DC operators have accelerated the adoption of digital technologies to address these and other extended disruptions of the past few years. For some, it’s a matter of survival and recovering previous throughput capabilities. For others, this disruptive period offers a chance to reset and expand their operations for the future. But for all, it’s important to leverage the unique opportunities they face today, from accelerated budgets and spending to a somewhat chaotic global market. These factors make the present an ideal time for many DCs to implement or initiate larger, more comprehensive plans than they would have during a year of normal operations.
More forward-thinking organizations recognize the opportunity to not only accelerate existing plans but to rethink those plans to lay a stronger, more resilient and agile foundation that can meet today’s requirements while helping to future-proof their investments and opportunities — all the better to leverage the continued innovations and advancements yet to come.
Download the report to learn how your business can respond — and thrive
In addition to detailing the challenges warehouses and DCs face today, the Futurum Report, Warehouse Automation: Future-proofing the Global Economy, covers key approaches leading operations are leveraging to keep pace today while future-proofing their automation solutions for tomorrow. These include strategies for augmenting scarce workers, harnessing the power of their data, integrating management solutions and more. The report also features expert recommendations to help you maximize the value of your investments in automation solutions.
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