Re-imagining Warehousing Innovation & Resilience
Adapting to the Digital Age
In the fast-paced world of warehousing, the call for digital transformation reverberates louder than ever. There's a compelling narrative that digitalization holds the key to revolutionizing warehouse operations. But what if this relentless push for digitalization is not the solution it's made out to be? Sure, the headlines are rife with tales of companies left in the dust for failing to adapt. But we must ask, are we strategically assessing exactly what the technology can accomplish and its value before blindly rushing into the digital abyss?
Yes, technology is advancing at a breakneck speed, but let's not mistake speed for direction. As warehouses navigate digital transformation, it becomes increasingly evident that operational excellence must remain paramount throughout technological progress. Embracing digital transformation isn't just about adopting the latest tech; it's about fundamentally reshaping how we do business. This is a strategic process that requires careful planning and execution, and it's not something that can be achieved by simply flipping a switch.
Consider recent disruptions to global supply chains, from labor shortages to cyberattacks impacting warehousing operations. Rather than blindly reacting with digital technology, a moment of introspection may reveal the wisdom in reassessing and fortifying strategies for innovation and resilience.
Navigating Warehouse Challenges
Let’s explore the multifaceted challenges that supply chain professionals face and the strategic considerations essential for fostering efficiency, adaptability and success in warehousing.
- Warehouse Inventory Accuracy: The Foundation of Operations
US Business Logistics Cost increased 19.6%, of which 52% increased in inventory carrying cost - CSCMP's 2023 State of Logistics Report
Warehouse inventory accuracy stands as the cornerstone of effective warehouse management. However, the challenge is maintaining accuracy. Despite advancements, many warehouses rely on manual data entry and traditional inventory management methods. Human errors, including miscounts, misplacements, or data entry mistakes, pose significant risks to accuracy. Moreover, the absence of real-time data visibility exacerbates the issue, hindering organizations from making informed operations and order fulfillment decisions.
- Warehouse Space Efficiency: Doing More with Less
By 2027, over 75% of companies will have adopted some form of cyber-physical automation within their warehouse operations to improve productivity. - Gartner
Effective utilization of warehouse space is paramount for cost management and streamlined operations. Warehouses that lack optimized layouts or processes encounter difficulties in maximizing available space. Suboptimal storage systems and picking routes further exacerbate the issue, leading to wasted space. While technology and automation offer avenues for space optimization, there is sometimes reluctance to embrace them. This hesitance often stems from concerns regarding initial costs and a lack of understanding regarding their utility and advantages.
- Labor Complexity: Navigating the Workforce Maze
In 2023, 57% of supply chain executives say labor shortages have hindered their ability to meet demand. - Forbes
Managing and optimizing the warehouse workforce is essential, but talent shortages pose significant challenges. Organizations struggle to find and retain skilled professionals, leading to fierce competition for qualified candidates, which impacts recruitment efforts and undermines the overall quality of the workforce. High turnover, especially in manual labor roles, further exacerbates expenses and disrupts team cohesion, causing operational inefficiencies.
- Risk Mitigation: Ensuring Resilience
35% of companies have risk mitigation operations in place to achieve strategic goals and sustain competitiveness - Gartner
Warehousing operations face mounting pressure on existing systems and processes, necessitating robust risk mitigation strategies for resilience. Inadequate visibility across the supply chain complicates compliance with evolving regulatory standards and hampers the ability to proactively address potential disruptions. Furthermore, neglecting data security leaves warehousing systems vulnerable to cybersecurity threats, risking operational disruptions and jeopardizing critical infrastructure.
How to Get Started: Define, Build and Scale
As we navigate the warehouse digital transformation journey, it's imperative to acknowledge the foundational challenges that persist and embrace modern technologies. However, it’s not just about investing in new systems; it's about strategically reevaluating warehousing operations and systems. Whether you're just beginning the journey or already pushing the boundaries of innovation, it is important to define, build and scale the modern processes and capabilities that transform your supply chain and warehouse operations. This often starts with defining your transformation strategy and roadmap, then implementing digital solutions and building modern capabilities that showcase value at every step of the process. Our suite of modern warehousing services and solutions are specifically designed to accelerate companies' transformation journeys and tackle the multifaceted challenges encountered in today's environment.
Digital Warehouse Assessment: Illuminating the Path Forward
Our digital warehouse assessment is the most common starting point. It helps our clients navigate the complexities of warehouse transformation— becoming a guiding beacon for companies at crossroads or program stalls. This meticulous evaluation of warehousing capabilities not only analyzes the current state, but sets the strategy and defines a clear path forward. By identifying, prioritizing and justifying the investments needed to transform your warehousing operations, a digital warehouse assessment equips companies with a tailored roadmap and plan with clear direction for addressing today’s warehousing challenges.
Results
- Transformation strategy aligned with business strategy
- Prioritized capabilities and digital use cases
- A clear digital transformation roadmap and business case justification
Warehousing Digital Twins: Transforming to a Superior Representation
Our warehousing digital twin capability revolutionizes the way companies perceive their operations, incorporating comprehensive data, analytics, simulations and emulations through cutting-edge technology like Emulate 3D and Arena simulation software platforms.
This capability enables rapid virtual iteration of warehouse facility, process and equipment design. It allows companies to simulate the physical environment and emulate changes within the control systems so you can improve your time to value for new warehouse operations and optimize existing operations. As companies aspire for operational excellence, this capability becomes a virtual revolution—streamlining processes, reducing dependence on manual labor and enhancing overall operational efficiency. Envision a future where your warehouse operations are not just visualized but strategically optimized for sustained success in the ever-evolving business landscape.
Results
- 40% improved commissioning time
- 13% increased throughput
- 85% AMR downtime reduction
Warehousing Enterprise Solutions: Scaling Towards Excellence
Our warehousing enterprise solutions capability, developed through collaboration with industry leaders and top-tier technology providers, serves as the linchpin for scalable, adaptive and resilient digital technology implementations. With an open technology architecture approach, we ensure a customized solution tailored to our client's needs, incorporating technologies such as warehouse management systems (WMS).
Integration of advanced WMS has proven instrumental in addressing inefficiencies in inventory management and labor allocation. By enabling real-time tracking of inventory levels and optimizing stock replenishment, companies can mitigate stockouts and overstocking while significantly enhancing inventory accuracy and order fulfillment rates. Moreover, harnessing data insights derived from these systems unveils opportunities for layout optimization within warehouse premises. Such strategic realignments not only maximize storage capacity but also streamline workflow efficiency, ultimately driving down operational costs and bolstering overall productivity.
Results
- 30%+ increased asset utilization
- 5-15% improvement to on-time in-full (OTIF)
- Real-time visibility
Intelligent Warehousing: Redefining Efficiency, Adaptability and Precision
Our intelligent warehousing capability encompasses a variety of data science offerings that revolutionize warehouse operations, enhance efficiency and fortify resilience to unforeseen challenges. Our expertise spans planning optimization, predictive maintenance, machine vision and closed-loop optimization. Seamlessly woven into the fabric of warehouse operations, these algorithms drive transformative efficiencies, leaving no stone unturned.
Picture a warehouse where inventory levels fluctuate, receiving and shipping patterns shift and storage and retrieval are paramount. Leveraging extensive historical and system data analysis, our data science capabilities deliver actionable insights. These insights empower proactive decision making, optimized workflows and prevent potential material or product movement breakdowns. Consequently, the warehouse can swiftly adapt to evolving demands.
Results
- 10-40% reduction maintenance costs
- 10-15% increased productivity
- 10-12% improved labor efficiency
Warehouse IT/OT Cybersecurity: Fortifying the Digital Fortress
Our warehouse IT/OT cybersecurity capability offers robust programs that provide heightened visibility into cyber-physical system (CPS) security, enabling rapid detection of vulnerabilities. The preservation of data integrity becomes a paramount assurance, safeguarding critical warehouse information against potential breaches.
Beyond fortifying the digital fortress, this cybersecurity capability translates into substantial cost savings, creating an efficient and secure foundation for digital transformation initiatives. As companies navigate the complexities of the digital age, this cybersecurity prowess stands as an indispensable shield against the ever-present and evolving threats of the cyber landscape.
Results
- 90% decrease in troubleshooting time
- Enhanced resilience & continuity
- Cost savings & risk reduction
In this age of digital, let's dare to question the status quo. Let's challenge the notion that digital transformation is a one-size-fits-all solution. Let's remember that sometimes, the path less traveled might just lead us to where we need to be.
Authors
