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Supply Chain 6 min read

How to digitally transform your warehouse

How to digitally transform your warehouse

ABI Research has these five key tips for managers looking to digitize warehouse operations – and gain greater visibility, efficiency and productivity as a result.

Huge growth is predicted in warehouse technology — and it is no surprise. In times of supply chain disruption and unpredictable demand, the benefits for organizations of gaining visibility and improved efficiency and productivity in this part of the supply chain are hard to ignore.

Read more: This is how you should think about green supply chains now.

According to ABI Research, the Warehouse Management System (WMS) software market is expected to grow by a Compounded Annual Growth Rate (CAGR) of 13.5% over the next 10 years and reach US$10.3 billion in 2030. Digitization projects are rife as companies seek to gain a better overview of their supply chain operations. The significant area has been in WMS, but many business leaders are investing in other tools such as robotics, analytics and even augmented reality glasses.

Geopolitical uncertainty and the ongoing effects of COVID-19 have made it more essential than ever to streamline operations and join up different parts of the supply chain.

“A lot of tasks in a warehouse are very separate, so yard operations might be completely isolated from pick-and-pack, for example," explained Adhish Luitel, Industry Analyst at ABI Research. “You can enable real-time data capture to connect all these systems and get the full picture of the warehouse operations."

His report, Warehouse Management System Software: Digitally Transforming Warehouse Operations, takes a deep dive into the industry today. As well as bringing siloed tasks together, there are many advantages to digitization for warehouse managers. Luitel stressed that gaining a granular level of visibility can improve efficiency, helping managers to deploy capabilities such as robotics and automation, and making it easier to instantly react to changes and plan ahead.

A strategy for managing inventory is essential, ABI Research found.

Strategies for warehouse operators

But while the benefits of technology are clear, the path toward digitization is not always straightforward. The ABI report aims to demystify that, giving five tips for warehouse managers on how they can get the best value out of their transformation projects.

Five key tips for managers looking to digitize operations

Look beyond productivity
  • Key Performance Indicators such as dock-to-stock time are not the only things worth measuring. Luitel said it is also crucial to look at energy consumption, worker satisfaction and safety.
Combine the value of multiple tools
  • “You get a lot of return on investment by combining different solutions," Luitel said. Example: match location data with a voice solution to minimize the distance traveled based on where the worker is.
Strong inventory management strategy
  • Ensuring workers have the right tech to manage inventory is important – as are automated solutions where appropriate.
  • Logistics operations should establish the right kind of automation or digitization strategy based on its throughput needs, its need to adapt, and short-and long-term demand expectations.
Focus on implementation
  • Organizations should work with vendors to devise short and long-term implementation plans to ensure a smooth transition to new tools and ways of working.

Change management is extra challenging in times of fast employee turnover.

“With The Great Resignation and a lot of workers switching jobs, it can be hard to implement these solutions, because of the time you need to allow the workforce to learn these tools and deploy new procedures," Luitel said. “It is a change of mindset."

A unique selling point for a lot of technology providers has been to minimize training time, sometimes to less than one hour. That way new employees can be quickly brought up to speed. There is also a high cost associated with new technologies. But Luitel said the industry is adapting, with subscription services increasingly offering an alternative to big upfront costs.

“The industry is thriving and will continue to do so for the next five years and beyond" — Adhish Luitel, Industry Analyst, ABI Research

And flexible approaches of this kind are one of the factors driving growth. “Warehouse managers do now see the value in new technologies," he said. “The industry is thriving and will continue to do so for the next five years and beyond."

In the next few years, ABI expects to see most expansion in the APAC region, while North America currently leads the way in warehouse innovation. Location technology plays a pivotal role in many of these digitization projects, including indoor positioning solutions, asset tracking and visibility tools that can give oversight to the entire supply chain. Being able to find assets in half the time and track them inside and out gives organizations a significant advantage.

“Location technologies can create an entire 'eco' ecosystem surrounding IoT sensors," Luitel explained. “Warehouse operators can use location intelligence to streamline warehousing and fulfillment operations."

While many of the factors that disrupt supply chains are things no company can control, these technologies put the power into the hands of warehouse operators to drive greater value and visibility across their operations.

Solve supply chain challenges quickly by spotting disruptions and problems in real-time.

Beth McLoughlin 2023

Beth McLoughlin

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