Dev Pro Journal
Demands are for faster, error-free fulfillment. Show your clients how to stay ahead of the competition.
Replacing manual processes with digital systems and automation is the key to solving many pain points that warehouses and distribution centers (DCs) contend with today. However, a 2021 study from ResearchAndMarkets.com revealed that 80 percent of the world’s warehouses have “no automation whatsoever.”
The report also states that this statistic represents immense market opportunities for technology solutions providers. Mordor Intelligence forecasts confirm this. The European warehouse automation market, valued at USD 3.74 billion in 2023, is set to grow to USD 7.32 billion by 2028, a 14.40 CAGR. It reflects the fact that your warehouse and DC clients that have been waiting for the right time to upgrade from manual processes realize that they can now build a business case and see ROI from an upgrade to digital and automated processes. Here’s why:
- Labor Cost and Availability
Although an upfront cost is associated with digitizing processes, whether allocating budget for mobile devices, wireless infrastructure, and a more robust management system or deploying robots and cobots, automation saves money. It decreases the labor hours (and costs) necessary to accomplish work and can perform many tasks more quickly than employees using manual processes.
Furthermore, warehouse labor is hard to find, and the shortage will continue. There will be 95 million fewer people of working age in Europe by 2050, while warehouses employ 44.6 million. At the same time, ecommerce sales are expected to increase. Warehouse and DC operators need to act now to prepare for new ways to operate and meet demand.
- Picking Errors and Mis-shipments
Mistakes hurt the bottom line. Shipments that include the wrong items or quantities can lead to frustration and perhaps even lost customers. And depending on the contract, they can even lead to fines and penalties. Furthermore, it costs time and money to correct errors. For example, reshipping and expedited shipping can increase costs by a factor of 5. Automating processes, from data collection, picking, and shipment verification, saves time and money and preserves customer relationships.
- Customer Demands and Expectations
Whether the warehouse or DC ships to a business or directly to consumers, expectations are heightened. Customers demand fast, error-free fulfillment. Customers also expect transparency and easy access to information about their orders and shipment, which is virtually impossible if employees use manual methods. But a modern warehouse with real-time visibility and efficient, streamlined processes can help businesses meet that demand.
How to Help Your Warehouse and DC Clients Transform their Operations
While a warehouse or DC operator may immediately envision transitioning to a fully automated operation that leverages AI and robotics, a successful transition from manual processes is incremental. For example, the warehouse may replace paper-based orders with digital picking orders on mobile devices, enabling real-time inventory updates. If planned strategically, a gradual approach helps build the groundwork for more advanced tech deployment later. It also allows the workforce to adapt to change more easily and operations to continue with fewer disruptions as digital transformation occurs in phases rather than with one sweeping change.
As a trusted advisor, it’s also important to stress to your clients that digitizing inefficient processes will still lead to inefficiency. Help your clients assess their operations, look for redundancies and waste and revamp processes for efficiency. Then, digitizing or automating them will help them reach their business goals.
Encourage Change
The hard fact is that warehouses and DCs holding onto manual processes are limited. They have a ceiling for improving key performance indicators (KPIs), such as inventory accuracy, shrinkage, receiving cycle time, picking accuracy, order lead time, and more. Their operations are also dependent on labor availability, which is increasingly more difficult to secure. Manual processes may even require less-than-optimal use of warehouse space and lead to a higher rate of safety incidents.
Perhaps most importantly, operations that continue to use manual processes are falling behind competitors in implementing tech solutions to enhance speed, accuracy, productivity, and customer satisfaction.
Help your clients evolve to stay on the leading edge in their markets with digital transformation and automation.