Next-Gen Warehousing in Omni Channel Age
The evolution of e-Commerce in the retail Omni Channel age, requires a viable solution to meet the immediate challenges facing Next-Gen Warehousing. In order to improve customer service expectations while managing cost structure, today’s e-Commerce retailers must possess vigorous insight and comprehensive data to emerge as leaders. By identifying the needs, understanding the implications, and generating protocol designed to increase labor productivity while reducing modern warehouse costs – our vanguard Next-Gen Warehousing approach utilizes cutting edge technology, such as AI, to provide solutions for our global partners.
As e-Commerce growth accelerates, so does our enthusiasm. We observe innovative applications at their finest with the integration of a new age business model that merges online orders with massive automation generating unparalleled back end efficiency. To appreciate these advances requires understanding the growth of e-Commerce and how this entails an increase in cost while labor productivity declines and the inevitable proliferation of SKU’s. Our findings address these matters and allows for the demands of Millennials to be met while elevating the environmental effects of contemporary warehousing.
In this paper, Next Gen Warehousing will be explored in the terms of the following key attributes of which include; warehouse design and automation, labor productivity and picking accuracy, returns management and inventory visibility, endless aisle impact and flow through, food safety, and optimization of human resources. By the way of collectively addressing and improving modern warehouse design from A to Z . . . Quality and innovation are paramount features required by e-Commerce retailers who recognize the importance of meeting future supply demands. This discussion seeks to elucidate knowledgeable industry experts on new best practice models vital to future successes.
Key Factors Driving Next-Gen Warehousing:
The collective summation of three key components, Right Automation, Labor Productivity, and Throughput Improvement, collectively contribute to the vital evolution of warehousing.
Right Automation requires decision support for right automation (ASRS, Robotics, and Low Cast Automation), imperative to improve functionalities applicable to warehouse design. Equally important, is the Warehouse command center which houses real time visibility of warehouse operations while possessing the capacity to provide quality check automation and cold chain contributions. The result of this approach is that Labor Productivity, can then be divided into four sub-segments: Labor forecasting, Data capture at source, such as RFID, Scanners, Cameras, Beacons and Biometrics. In addition, Palletization and basic warehouse operation analytics allow for the incorporation of optimal technological advances, which are all enhanced by the aforementioned. And finally, Throughput Improvement completes section one through use of Picking and putting away design optimization & Warehouse layout design – Racking system design, Inventory accuracy and Omni channel process design. The result of these categories- simultaneous improvement, is the Next-Gen Warehouse model being the efficient and futuristic answer to the modern warehouse experience.
Implications of the New Business Model:
Omni channel commerce is no longer the innovation, rather, it is the norm. As such, Millennials are driving competition between Amazon and the rest of the world leading to stringent delivery timelines for meeting online orders. Thus, massive automation is emerging as the innovative new way of optimizing warehouse efficiency – while ultimately increasing pressure on reducing back end and warehousing costs. The implications of Next-Gen Warehousing will redefine e-Commerce industry. Given the affects proper warehousing requires, vast attributes are required to achieve optimal technical functionality. By introducing and observing interactions within the following categories, optimal affects may be formally recognized.
Within the world of warehousing, network planning is vital and best practice models demonstrate that planners must bear in mind the complex Omni channel movement requirements of 24 x 7 to create minimal structure with maximum efficiency. For example, by executing the proper degree of right automation without impacting merchandise flow becomes key. Moreover, with the deployment of advanced robotics and 100% completely automating warehouse floors, retailers increase production with minimal human intervention in terms of inward goods, put away, and picking and sorting. (See figure 1)
The single largest item on expenses at 55%, is that of labor employees and is projected to increase by at least 5-10%. Meanwhile, according to the 2015 US Labor Census, actual labor productivity decreased steadily declined by over 4.4%. A variety of factors contributing towards this decline range from a lack of training leading to poor productivity, picking inaccuracy, and even high BMI index. Complicated by the lack of accuracy of picking – AI easily becomes the optimal choice.
A key factor retailer’s face is return management. The industry estimate within e-Commerce suggests 24% in the US alone; that is 262 billion items being returned for a variety of reasons. Obviously, this leads to massive challenges in warehousing space and design. Many warehouses are ill equipped to navigate this task and therefore contribute towards high risk to the manufacturers and unacceptable turnaround times for consumers. Thus, the benefits of a streamlined Next-Gen Warehouse increase exponentially as they solve all current categorical challenges facing brands.
The Impact of Endless Aisle & Inventory Visibility:
Another interesting component of today’s effective warehouse applies an “endless aisle” concept to ensure clear inventory visibility (See figures 2 & 3). The advantage of which allows multiple order channels to be executed efficiently, despite a lack of real time visibility. By streamlining IT systems, we remove the pressures upon human systems responsible for ensuring a 100% fill rate on e-Commerce items – an otherwise impossible task that leads to wrong picking, packing, and pilferage. With this information, Next-Gen Warehousing is poised to reduce multi-million dollar risks as they increase international margins.
The ability to accurately monitor necessary temperature control while providing safety to consumers has always been problematic at best. However, our future forward warehouse concepts have produced solutions that not only improve warehouse flow, but answer some of the largest concerns facing food transports companies. With the development of cutting edge temperature tracking systems inserted into trucks – we are now able to safely monitor cargo of warehouses and trucks alike, eliminating the risks associated with handling food safety correctly. Thereby eliminating compliance issues of warehouse operators and reducing liability for corporations.
The next couple of years will revolutionize retail through e-Commerce with an accelerated adoption of technology across the board. The implementation of which will bring about an end of warehousing as we know it – by reducing the roles humans previously held. Moreover, with AI being implemented, improving both consumer experiences and manufacturer’s alike – the costs of traditional labor cannot compete with modern automated warehouses designed to provide frontline e-Commerce exposure.
The ability to analyze the productivity of warehouses built to meet modern demands has arrived. The tools like Virtue Sense which monitors worker productivity at a granular level gives complete control and visibility to the warehouse manager to train and re-train the workforce more effectively and bring transparency in worker productivity linked wages.
Again, we see significant use case using VR devices for warehouse pick. Combination of all these efforts, will lead to significant changes the way warehouses are managed and operated in near future.