WMS Archives - Page 3 of 21 - Logistics Viewpoints

New Business Model to Master Shopfloor Complexity and Competitive Threats

Warehouse Management Systems | By Bengt Tuner • 04/12/2022

It is no secret that operational complexity on the shopfloor is considered one of the top challenges we all face, and not far behind, we have cost reduction, efficiency increase, and user engagement. It is all equally important to master to stay ahead of the competition.

The most common way to manage shopfloor complexity is to use a warehouse management system (WMS). The challenge is that traditional warehouse management systems on the market use 50-year-old scanning technology combined with sub-systems, like a labor management system, as a backbone to solve operational complexity.

Another way to solve operational complexity is by adopting new business models. One of the most compelling new models is software built upon location awareness and in-motion resource management that intelligently automates manual decisions to decrease complexity. This significant paradigm shift eliminates manual intervention and the need to scan items at every interaction and creates a system-run environment with no manual intervention.

Intelligent push-task technology and dynamic 3D view distribute tasks automatically to humans and machines and make changes on the fly to overcome disruptions and calculate optimization opportunities. As a result, the operation has gone from a complex manual operation to an efficient system-controlled environment.

The combination of intelligent software with AI execution capabilities and visibility using location technology gives warehouse and factory operations a tool to decrease complexity and at the same time decrease costs, increase efficiency and user engagement.

Bengt Tuner is the Group Chief Executive Officer at Locanis. Extensive experience as Entrepreneur and expert in Supply Chain Management, Sales & Marketing, Supply Chain Execution Software, Innovation & Digitization, Start-Ups & Corporations, People Management & Leadership, Strategy & Organization and Lean Management. More than fifteen years experience as CEO and Senior Manager for small, medium and large transport & logistics companies and more than ten years experience as CEO for IT companies building front-end Supply Chain Execution Software.

Five Advanced Technologies That Are Revolutionizing Logistics

Logistics Technologies | By Terence Leung • 03/31/2022

Already upended for two years by the COVID-19 pandemic, the worldwide logistics industry is facing new challenges.

With gasoline prices reaching record highs, transportation managers must make smarter decisions that minimize road miles and associated costs. While demand is high, ongoing product shortages continue to cause supply chain disruptions, create unpredictable shopping behaviors and drive rapid delivery expectations. The industry’s well-documented labor shortages are not ending anytime soon. The energy crisis in China and the European conflict are bringing additional chaos in the form of production shutdowns, raw material shortages and blocked shipping lanes.

If there’s a bright spot anywhere it’s the fact that, as logistics challenges have grown, so has the availability of advanced technologies to manage these challenges. Artificial intelligence (AI), machine learning (ML), predictive analytics and robotics once seemed incredibly sophisticated and out of reach — but today they’re easily accessible to every company. Both anecdotal evidence and research studies demonstrate that enterprises leveraging these advanced capabilities have fared much better than other companies during the extreme volatility of the past two years. And it’s safe to assume that logistics digitization will continue to deliver a significant competitive edge as supply chain complexity and uncertainty grow.

For logistics teams seeking to manage volatility and deliver more predictable, profitable results, five advanced technologies should be in their toolkits: digital control towers, warehouse task automation, warehouse robotics, dynamic price discovery and digital freight bidding. Organizations that aren’t actively investing in these capabilities, which are described in greater detail in this article, are already falling behind — and they risk losing even more ground as business conditions become more and more difficult.

Digital Control Towers

Digital control towers sit at the heart of the supply chain ecosystem, gathering real-time data on current conditions. They enable logistics teams to identify disruptive events such as transportation roadblocks, missed incoming deliveries, asset downtime and labor shortages. They make it easy to share this information both internally and externally, so the end-to-end supply chain can immediately respond in a synchronized manner.

For logistics teams, digital control towers add maximum value when they’re integrated with the transportation management system (TMS). This allows all transportation resources to be leveraged in creating a response, including the extended carrier network. It also enables the control tower, enabled by AI and ML, to apply predictive analytics, run scenarios and make recommendations that are automatically and seamlessly executed by the TMS. This combination is helping the world’s leading logistics providers move closer to operating an autonomous, self-correcting supply chain that pivots at the speed of change.

As logistics organizations dynamically plan and re-plan carrier selection, distribution networks, delivery routes and frequencies, loads and capacities in real time as conditions change, the benefits can be enormous. In a study commissioned by Blue Yonder, it is estimated that a typical $10 billion company can save $14.1 million in transportation savings over a three-year period by leveraging a TMS.

According to executives who have benefited from this combination of advanced technologies, one of the greatest benefits is gaining real-time visibility across the extended logistics network. “We wanted to see inventory positions around the world compared to our forecast, compared to our actual demand. We wanted to see what things are in transit as well as identifying where there are delays and whether they would cause stock outages,” said the director of supply chain for a health technology business who was quoted in the report.

Warehouse Task Automation

Another advanced technology that’s becoming imperative is warehouse task automation. The study predicts that a $10 billon company can realize over $31.2 million in cost savings over three years by improving warehouse scheduling and processes, as well as reducing labor requirements via enhanced productivity.

Since a single warehouse worker represents $50,000 in annual costs — and talent is extremely scarce — it makes sense to optimize the accuracy and efficiency of every task. Digital warehouse tasking solutions rely on ML to continuously identify opportunities for efficiency and cost savings, then unlock them to optimize daily operations in real time.

In today’s volatile marketplace, it can be nearly impossible to meet customers’ expectations for service and delivery while still protecting profit margins. Keeping up with demand changes means constantly adjusting staffing levels, inventory positions, equipment placement, employee-specific task lists and priorities, and other warehouse parameters. Delivered in a software-as-a-service (SaaS) model, warehouse tasking solutions gather real-time, 24/7 operations data, flag issues and generate an autonomous response. As conditions evolve, so do labor schedules and priorities, driving a fluid, responsive and profitable warehouse environment. Warehouse operations are tied to a probabilistic demand forecast, but able to react to changes quickly and automatically.

Warehouse Robotics

According to another recent study, the worldwide market for warehouse robotics will increase from $4.4 billion in 2020 to $15.79 billion by 2030 — an annual growth rate of 13.2%. A similar report predicts that, by 2026, 75% of large companies will use some form of smart robotics technology in their warehouses.

Given ongoing labor shortages, as well as the health risks and physical vulnerabilities of human workers that were emphasized during the COVID-19 pandemic, warehouse robotics make good business sense. By leveraging robots to pick items, move pallets, deliver goods and complete other tasks, companies can increase speed, accuracy, efficiency and reliability — while significantly reducing labor expenses. Today’s robots incorporate new levels of intelligence, agility, guidance and environmental awareness, which means they can execute a range of warehouse tasks with little to no human intervention. As demand ebbs and flows, they can easily be scaled to match execution requirements.

In identifying a warehouse robotics solution, a key consideration is the amount of time and effort required to onboard the new technology, integrate it with the warehouse management system (WMS) and begin earning a return on investment. DHL Supply Chain is implementing robotics at 2,000 operational sites around the world. By using a new robotics platform it developed with Blue Yonder and Microsoft, DHL can quickly connect robotics with an existing WMS. The new platform quickly reduced robotics integration time by 60%, and DHL is targeting a 90% reduction as the platform is rolled out globally.

Dynamic Price Discovery

As extreme demand shifts continue, transportation planners are spending enormous amounts of time and effort to ensure that carriers have the right capacity, at the right price, on extremely short notice. A dynamic price discovery solution addresses this challenge by providing on-demand access to real-time market rates.

Dynamic price discovery solutions act as a single point of integration for shippers and their partners, replacing tedious manual processes with single-click speed and accuracy. Transportation planners can dynamically access the best freight rates across both contracted and non-contracted carriers, enabling them to procure additional capacity during peak demand periods. By seeing real-time prices — which reflect current demand-and-supply effects — they can make better informed, more profitable tendering decisions.

Executives interviewed in the study mentioned above confirmed that dynamic price discovery capabilities have contributed to a more strategic use of carriers and a significant transportation cost savings. “[Dynamic price discovery] has allowed us to significantly increase our use of primary carriers while reducing our spot market use,” said the director of a manufacturing and supply chain systems for a food service products company. “Our primary carriers are now at 90%, up from 75%, while our spot market use has gone from around 2.5% to less and 0.5%. With spot market rates frequently 2 to 3 times our primary carrier rates, this change has been huge for us.”

Digital Freight Bidding

In today’s fast-moving logistics landscape, freight bidding is a powerful tool for balancing service with cost control. However, the process of managing bidding engagements, receiving carrier proposals, optimizing bids, facilitating awards and managing contracts via manual methods is time- and cost-intensive. It slows responsiveness and drains scarce labor resources.

Leveraging a digital freight bidding solution, delivered via a SaaS model, automates and accelerates this process. By connecting a logistics team with its entire carrier network in near real time, digital freight bidding solutions provides one unified platform for this process, configured to optimize collaboration and communication. Incumbent carriers can easily be renewed, while back-up carriers can also be specified.

Digital freight bidding solutions enable logistics teams to quickly define rules and constraints, invite carriers to participate and achieve maximum cost savings in mere minutes via a robust bid optimization engine. By also considering carrier performance metrics, the decision engine can intelligently balance cost with service. By leveraging digital freight bidding capabilities, companies have reduced their truckload costs by up to 12%, with value realization within 12 weeks enabled by a SaaS hosting model.

The Stakes Are High — But So Is the Return

Chaotic supply chain conditions have impacted every business function, but logistics

teams have been hit especially hard. Because warehousing and transportation represent significant cost centers, logistics organizations are under special scrutiny — pressured daily to make intelligent, profitable decisions on the fly.

The five advanced technologies outlined here can help, by making frameworks as seamless as possible, increasing collaboration across organizations, and enabling both inbound and outbound visibility and control. Forward-looking logistics organizations are already earning a high return on their investment in these solutions as they identify upstream and downstream changes, analyze possible actions and execute a synchronized response that automatically balances costs with service outcomes. As global disruption continues, digitization is the way to win in this high-stakes environment.

Terence Leung is Senior Director, Solutions Marketing at Blue Yonder. He has a keen interest in digitalization and the value it generates throughout the supply chain. In this role, he leads his organization to drive thought leadership and go-to-market strategy for supply chain execution and logistics solutions. In addition, he works with customers to understand requirements and drive best practices in the digital journey.

Prior to joining Blue Yonder, Terence was the leader in product marketing and value engineering at One Network. Previously, he was in leadership positions in industry management at Savi Technology and solutions and management consulting at i2 and Deloitte Consulting, respectively. Terence holds an MBA from the University of Texas, Austin and an Electrical Engineering degree from MIT.

Körber Elevate: Next Phase of the Journey

Warehouse Management Systems | By LV Staff • 03/16/2022

A modern day Rip Van Winkle would be surprised to wake up today and learn that HighJump is now known as Körber Supply Chain Software. But a twenty-year nap wouldn’t be necessary to fall behind on the company’s progress. In fact, a three-year cat nap would be long enough to fall out of touch with its rapid evolution. But I get the impression that the recent investment in Körber Supply Chain by KKR is likely to accelerate the company’s expansion. Why do I say this? Well, the press release states, “We look forward to the strategic partnership with Körber and to leveraging our experience of growth acceleration with global software businesses.” The first day of Elevate, Körber Supply Chain’s user conference, provided some indication of what may occur in the very near future.

WMS and Much More

As an analyst focused on warehouse technologies, I tend to be biased about the criticality of what our colleagues in Europe call “intralogistics.” But I think it is fair to say that warhousing is a hub of Körber Supply Chain’s solution set. The Körber warehouse offering is comprehensive. It started with inconso, and quicky expanded with HighJump, Centriq (voice), Cohesio Group (warehouse robotics implementations), and warehouse facility simulation and design. At the same time, the company expanded its geographic reach by adding an established presence to Asia and Latin America. At this point, its fair to say Körber Supply Chain is truly global with customers in 70 countries.

But changes in the near future could overshadow those of the recent past. The company’s vision for the future is much broader than the warehouse and is poised to greatly expand the solution footprint.

What’s in-store for 2022?

Sean Elliott, Korber Supply Chain Software’s Chief Technology Officer, reviewed the major product development achievements of 2021 and then discussed the three major focus areas for 2022. Delivered in 2021 were the first microservices as well as the API Designer platform for developing microservices. Korber also invested in its CLASS simulation and modeling tool and focused on modeling autonomous mobile robotic solutions and enabling customers to review their simulations in virtual reality.

The three major focus areas for 2022 are 1) investments in assisting Korber customers’ journey to SaaS, 2) bringing a new product, named Universal Control System (UCS) to market, and 3) offering warehouse modeling for operations.

Korber plans to finalize its next generation suite of low-code and no-code authoring tools; complete the platform’s journey to microservices and cloud native platforms; and begin taking WMS on the same journey. Of greatest interest to me is Korber’s plan to bring to market its Unified Control System (UCS). This solution will be developed to assist businesses in elevating their operations by enabling manual workforces to work more effectively in automated and robotic environments. The system will “unify the management, orchestration, and optimization of warehouse tasks and activities for RF or voice enabled workers, traditional automation equipment, and robotic solutions,” as stated by Sean Elliott. A first release is scheduled for mid-2022. The third focus area is extending warehouse modeling to operations. The CLASS modeling solution will be enhanced to allow users to connect daily operations to the plans and designs they evaluate in the system. By integrating real-time data from WMS, it will allow users to leverage CLASS for real-time visibility into operational status, evaluate plan versus actual, and take corrective action.

2022 and Beyond

We don’t know exactly what influence the new ownership structure (the addition of KKR) will have on Korber’s future. However, Chad Collins, Korber Supply Chain Software’s CEO, noted a couple areas of interest. During his keynote address he stated, “We’ve heard your need for more digital solutions spanning transportation management, order management, supply chain management, and deeper enablement of technologies like AI. With the support and experience of our owners Korber and KKR, we will make this a reality, and rapidly.”

***

I personally took notice of the final word ”rapidly.”

Don’t Replace that WMS just yet – Optimize it first!

Warehouse Management Systems | By Dan Keller • 02/17/2022

Recently, my team members and I worked on a project with a well-known retailer facing challenges in the e-commerce area of its distribution center – and here was the question at hand: ‘Would replacing the WMS be the best solution?’

This retailer’s challenge was specifically its direct-to-consumer (DTC) picking inefficiency. E-commerce was a rapidly growing area for the retailer, and with a relatively large SKU count (more than 10,000), its WMS was challenged to support strategies for handling the typical small orders, including:

Zone picking and consolidation (either with unit sorter or put walls)
Batch picking (multiple orders on carts)

The problem was that the WMS could not support a combination of strategies and did not utilize AI-based intelligence in doing “system-directed” work. It would just print order tickets and permit a picker to create a batch unit of work by scanning a bunch of tickets together into a single unit of work.

The retailer is large and doing a lot of volume out of its DC, not to mention the rapid growth brought on by the recent pandemic. So, at scale, this one area of inefficiency, combined with recent labor challenges, was creeping into the entire operation, creating a situation that needed to be solved immediately.

We go back to the question of replacing the WMS. Many of the newer WMS solutions available on the market promote greater flexibility and adaptability than previous generations. But, replacing a WMS can be very disruptive and resource intensive so it’s worth carefully examining the net benefits expected. In the case of this retailer, all its major operational aspects – such as directed put away, replenishment, and inventory management – were running just fine. The net gain from a new WMS would be minimal.

After weighing the costs of time and money, the retailer decided to keep its current WMS but look for add-on solutions to fill gaps in processes. With this decision, the retailer significantly improved throughput in their e-commerce area while saving significant time and costs.

Getting to the WMS decision: Should it stay or should it go?

When replacing a WMS makes sense:

Your WMS is an older platform which requires specialized technical expertise to keep it running.
You need features in your current WMS that you just can’t find as add-ons, such as:
1. Directed putaway
2. Supply chain planning tools
3. Improved inventory management capabilities
4. Solutions for increased expectations in security and service levels
Your WMS is no longer supported by the original company. This could be due to companies consolidating and sunsetting the software or other factors. Chances are, if you purchased your WMS more than 10 years ago, your software may not be supported any longer.
Your WMS requires a sizable investment of time educating new employees on its use. That’s a sign it’s probably not as intuitive as it could be. It might be outdated in a way that requires replacement.

When replacing your WMS may NOT make sense:

The price tag. A new WMS will most likely cost more than you think. Customization leads to adding after-market pieces and added licensing costs and modifications. The payback may be much further out than what you had initially expected. I’ve seen an instance of a projected three-year payback becoming a five-year payback. This was the result of adding modifications to support existing specialized processes and support systems (conveyors, sorters, etc.) – all of which required new design, coding, and QA testing.
Disruption and resources needed. Replacement relies on a new integration from ERP to host. That might take six months to design. And you’ll need to include IT and Operations team members throughout the planning process. Once it’s implemented, you have all the training to consider. For example, processes will be different from picking to receiving to reporting. You’ll want to factor in that time to educate your workforce.

For these reasons and more, careful ROI assessment must be made to ensure WMS replacement is worth your time, money and the change management effort. Trust me when I say that I’ve seen the results of a client’s poor assessment on this!

A smart solution: The case for AI-based WMS optimization solutions

For the retailer I discussed earlier, AI-based optimization solutions offered the right fit because it helped them optimize e-commerce picking operations by adding software focused for just that area. This focus is a key benefit of add-on optimization solutions. A traditional WMS system might not give you this granularity because its job is to deliver broadly.

Another thing to consider is this: Some parts of your WMS – say inventory or location management – might be working well already. So the question becomes ‘how can you augment these solid areas with outside tools to match your operation today?’

Optimization solutions provide a modular approach for addressing specific areas of your operation where additional efficiencies are needed without having to completely replace the rest of your infrastructure and systems. Today’s optimization suites are driven by AI, permitting you to:

Reduce travel time through dynamic assessment of tasks and immediate building of the most efficient unit of work (where appropriate), and task interleaving
Balance potential task density (more work per linear foot travelled) with order priority to assure highest customer service levels
Provide real-time controls and dashboards to monitor workflow and individual performance, and to enable instant process adjustment to handle exceptions and changes
Provide labor orchestration to guide labor where needed in real time on the warehouse floor – whether to change tasks or to collaborate with AMRs.

While it might make sense to replace your WMS, there are plenty of reasons to continue using your WMS while adding optimization software. This practical solution can save you a substantial amount of time and money while also ensuring that your operations keep humming along without disruption.

Dan Keller, Senior Consultant at Lucas Systems, has been designing and delivering innovative software solutions for warehouses and distribution centers for 30+ years. As an early evangelist for voice technology, he has participated in dozens of industry-first implementations of voice and other technologies in industries spanning food and beverage, retail, healthcare, industrial supply, and manufacturing. He has held roles in sales, marketing, solutions design and delivery during his 20+ years at Lucas Systems and is a frequent speaker at supply chain and logistics conferences, including the Warehousing Education and Research Council, the Wine and Spirits Wholesaler’s Association, the Foodservice Distribution Conference, the Healthcare Distributors Management Association and more.

The Evolving Warehouse: Prepare Your Warehouse for Disruption

Warehouse Management Systems | By Joan Lim • 11/04/2021

It’s been 18 months since the World Health Organization (WHO) declared COVID-19 a pandemic, and the world is still trying to adjust to the changes and uncertainties associated with it, even causing a domino effect in some instances. The pandemic halted many supply chains last year, closing factories and stores, and limiting manufacturing and distribution operations. Many workers decided to retire, re-locate, or consider new professions. Construction of manufacturing plants and new warehouse sites were also postponed or canceled entirely due to market uncertainty.

Now, a year-and-a half since the pandemic started, activity has picked up, but the disruption has spawned a shortage of 80,000 drivers in the U.S. trucking industry, according to the American Trucking Association. With the lack of drivers and trucks picking up cargo, this is also causing U.S. ports to get backlogged. Construction backlogs are also taking 18-24 months to clear.

Meanwhile, e-commerce is booming more than ever. According to the CBRE Global E-commerce Outlook 2021 report, e-commerce growth will require another 330 million square feet of warehouse space in the United States by 2025. Even as more brick-and-mortar stores start opening, e-commerce is here to stay, registering growth in the 30-40% range. High e-commerce shopping rates combined with construction delays are causing a strain in the supply of new warehouse space, especially as companies shift their inventory management strategies from just- in-time (JIT) inventory management to larger safety stocks for better responsiveness. Online shopping has also led to higher product returns that would require additional space for processing and storage.

But customers don’t care about supply chain issues that may be happening in out of their view. They care about getting their products on time, which has now become a stronger factor in determining brand loyalty and preference. According to a new study from Oracle, 84% of people say delays would cause them to cancel their order and 80% say it would cause them to stop buying from a brand altogether. If companies don’t prioritize their supply chains and prepare for disruptions, they will risk losing valuable customers.

With transportation delays already cutting into fulfillment timeframes, companies need efficient, technology-driven distribution networks that surpass traditional linear supply chains. The challenge is to be able to maintain enough warehouse facilities to meet this rapidly expanding market, and have distribution networks that are agile enough to address unpredictable and disruptive events. But the question is, where and how are you going to build these facilities and create a more flexible distribution network? There will be situations where a traditional warehouse will not work. Existing warehouses can be in locations too far from the market, or will require dependency on strong transportation networks. This is where the flexibility of a cloud-based warehouse management system (WMS) and the ability to rapidly set up “pop-up warehouses” can benefit your warehouse operations.

Consider these four essentials when evaluating your warehouse facilities:

Do you have the ability to distribute anytime and anywhere? Companies must be able to operate adaptive distribution networks that easily respond to changing order conditions. Warehouses are now processing smaller and more frequent orders, and consumers expect delivery within 1-2 days.

Do you have real-time visibility into your orders, inventory, and shipments? It is important to have visibility across your whole supply chain to avoid out of stock situations and offer excellent service to customers.

Can you easily and rapidly deploy fulfillment centers when necessary? Companies should have the flexibility to convert any space into a warehouse when needed. With changing demand requirements, the need for seasonal products, as well as customer expectations of faster delivery times, sometimes you need to set up “pop-up warehouses” closer to delivery locations versus having one big warehouse further away.

Can you meet and respond to changing business demands? Having a cloud WMS gives warehouses the ability to deploy flexible order picking strategies allowing better management of market changes and demand fluctuations. Worker safety and efficiency is also crucial. This means being able to easily integrate with warehouse automated systems, have minimal downtimes, and promptly respond to any factors that will disrupt operations.

Customer experience is key. While supply chain disruptions are not new, the pandemic has caused dramatic shifts in consumer behavior and expectations, forever altering the retail landscape. With their brands and businesses at stake, companies must evaluate their current distribution process and network models, find ways to successfully respond to customer needs, and prepare their warehouses for the long haul.

Joan Lim is director of product marketing at Oracle and leads go-to-market strategy for Oracle Cloud Logistics solutions, covering transportation, global trade, and warehouse management. Prior to Oracle, Joan held product marketing and strategy positions at Unilever, Qualcomm, Amadeus IT Group and various start-ups focusing on cloud applications and supply chain. Joan has a master’s degree in digital marketing strategy from Georgetown University, and a master’s degree in business from ESSCA Business School in France.

Widespread, Yet Cautious Optimism for 2021: ARC’s Order Fulfillment Research Findings

Warehouse Automation | By LV Staff • 07/07/2021

COVID-19 caused a global upheaval in order fulfillment processes throughout 2020. As we enter the second half of 2021, there are abundant signs of improvement and optimization. Meanwhile, caution is prevalent as well. For example, the Delta variant of COVID-19 may cause an increase in infection and disruptions to business in the fall. Scenarios such as this, generally categorized as a surge, have been a concern for the last six-plus months. At the beginning of 2021, ARC Advisory Group, in partnership with DC Velocity magazine, anticipated factors such as a subsequent surge when we crafted our survey of warehouse practitioners. We obtained insights into experiences from the prior year (2020) and expectations for 2021 and beyond. Our research contained questions about numerous topics. However, this article will focus on findings about the following: business activity (anticipated change in order throughput volumes); COVID-19 related impacts on labor productivity; and perspectives on warehouse technology investments.

Warehouse Business Activity

More than 25 percent of survey respondents stated that they experienced a decrease of order throughput volumes in 2020. In contrast, only 3 percent of respondents anticipate a decrease in 2021. Furthermore, 80 percent of respondents anticipate an increase of order throughput volumes, while only 17 percent expect volumes to remain about the same. These expectations are generally in-line with other broader economic measures of expectations such as the ISM Report on Business and other confidence measures. In general, our results indicate widespread optimism for 2021, accompanied by a health dose of caution.

COVID-19 Labor & Productivity Impacts

Labor productivity was hindered extensively by COVID-19 and these negative impacts were exerted through a number of mechanisms. Within warehouse and fulfillment operations, personnel and labor was negatively impacted in a few ways. In our survey, we inquired about the impacts of facility-wide labor capacity restrictions, warehouse zone-based labor capacity restrictions, social distancing requirements/mobility restrictions, and worker unavailability due to quarantine requirements (reduction in available staff). The first three mechanisms are driven by restrictions on personnel density or movement within a warehouse or facility. In contracst, the last mechanism (worker unavailability) is a temporary reduction in the size of the available labor pool. Aggregate responses indicate that facility-wide labor capacity restrictions was the factor that exerted the most widespread negative impact on 2020 warehouse operations. And although social distancing measures negatively impacted warehouse operations, one respondent stated that complying with social distancing measures was key to continuing operations. Most notably, negative impacts from worker unavailability due to quarantine requirements was almost as widespread as facility-wide labor capacity restrictions, but also exerted the greatest amount of “extremely negative impact” on warehouse operations in 2020. I view this result as “when quarantine requirements hit a warehouse operation, likely due to a local outbreak, they hit it hard.” When viewing the same factors for anticipated impediments to 2021 operations, a substantial improvement is visible across the board. Of course, expectations are uncertain. But the reduction in 2021 anticipated negative impacts, when compared to those that were experienced in 2020, indicates an improvement in expectations that to date have occured as expected (or better).

Warehouse Technology Investment Perspectives

ARC Advisory Group’s prior research with DC Velocity indicated that the value proposition of warehouse automation continues to improve. Our research this year indicates the same. Over 60 percent of respondents indicated that they believe the warehouse automation value proposition will expand (become more applicable) over the next three years. Meanwhile, less than 10 percent expect the value proposition to diminish (become less applicable). With that said, we asked respondents to identify the one warehouse technology investment that is the highest priority/importance to their organization. WMS was by far the most frequently chosen technology, followed by warehouse labor management. I believe these results indicate that software remains central to achieving efficient and effective warehouse operations, and that labor remains a necessity in the vast majority of facilities. With respect to automation, autonomous mobile robots (AMR) and conveyors/automatic sortation were most frequently chosen. Conveyors and sortation is almost a necessity to automated warehouses, so this was expected. However, the relatively high importance of AMRs shows that these robotic systems have matured rapidly from emerging to well-established warehouse technology options.

A complete analysis of logistics trends, technologies, and services