The Warehouse of the Future

What are the technologies defining the warehouse of tomorrow?

Warehouses and distribution centers are increasingly playing a critical role in generating supply chain efficiencies across industries like pharmaceuticals, food and beverage, retail, and fashion, leading to companies such as Amazon and DHL to look for new ways to support their growing warehouse operations through solutions such as robotic picking systems and augmented reality. As such material handling, data capture, order fulfillment, and software technologies are evolving to align with organizations’ vision of the warehouse of the future.

Organizations today are facing a growing number of market pressures to optimize their warehouse. Pressures of faster order fulfillment, error costs, lack of space, and increasing labor costs are just some of the major hurdles organizations today have to cross in a fast evolving industry to remain competitive. Consumers’ access to non-traditional retail channels has transformed logistics, perhaps forever. Operations in the warehouse are transitioning from the traditional pallet level and going smaller into individual item level fulfillment and with it pressures of faster fulfillment and order accuracy. The cost of a single error and its negative impact on customer service is so much more elevated in today’s age of e-commerce and omni-channel retailing. If inaccuracy, delays, and other problems occur, it can lead to customer dissatisfaction, which can result in lost profits for the company.

Exhibit: Expanding Labor Force and Warehouse Establishments

The number of private warehouse establishments in the US alone has risen to 16,556 in 2015 and so has the labor force. As costs and competition continue to rise, decision-makers are constantly looking for new ways to reduce their expenses while addressing the changing needs of the consumer and market.

Technologies such as AR and Robotics have evolved immensely over the last decade and are seeing greater success and deployment in recent years. Below we highlight some of the major technologies which will be shaping the warehouse of the future:

• Material Handling Solutions: Warehouses are running out of space fast and require a more productive workforce than ever. Automation systems including ASRS and Order sortation systems are just some of solutions taking on more modular and flexible designs in order to address these growing concerns.
• Data Capture: Real-time visibility will be a key competitive differentiator and with greater deployments of data capture technologies such as imaging solutions for quality checks, barcode scanning, and dimensioning systems for cubing of the items for high density storage and transportation, decision makers can make better informed decisions and manage their resources.
• Wearables: Wearables are slowly gaining mainstream attention. Augmented reality and voice technology are seeing successful trials across warehouses supporting processes in order fulfillment and beyond.
• Robotics & AGV: Driven by a need for greater automation, solutions for palletizing, depalletizing, ASRS, and AGVs are being used to a greater extent today to support warehouse operations around the world. The introduction of individual item picking/packing robots could result in wider adoption in the warehouse space in the future especially as advanced capabilities are brought to market at relatively more affordable price points.

The warehouse of the future will be one that can support the fulfillment needs for multiple channels including brick and mortar, wholesale, home deliveries, and parcel shipments, often simultaneously. Organizations risk falling behind and losing the competitive edge if they do not look to solutions available today that can prepare them for future customer needs and market place.

VDC’s Warehouse of the Future report covers industry trends, market insights (leading applications, drivers, and barriers), and in-depth vendor analysis, and it highlights innovations in solutions across the warehouse and logistics industry.

For more information and insights on this report, please feel free to download the Executive Brief and contact us to learn how to gain access to the full report.

Written by Shahroze Husain and Richa Gupta. For more information, be sure to review our full Warehouse of the Future report or contact us at [email protected]. The author can be contacted directly at [email protected]