Warehouse success in 2024: 5 critical elements
Last year brought many new technological advancements in the warehousing industry, leading to the appearance of concepts like “Smart Warehouses” - “the next stage of evolution in warehouse management”. Both the market and the automation in the industry have seen impressive growth, which led the way to potentially a very successful 2024 for managers and teams who embrace innovation.
Of course, in warehousing and way beyond the limits of this market, we’ve heard about the advancement of AI, its role and the potential threats it might bear. Nevertheless, studies from 2022 have shown that workers viewed automation in warehouses more positively than negatively. There’s still room for a lot of adjustment and accommodation, of course, but technology has already started to prove itself and open doors for teams to focus on new or more sensitive activities while boosting their productivity.
Each warehouse operator has their tailored definition of success, but we can agree that reducing costs, optimising manual processes, instant access to data, creating a safer and more sustainable work environment, and better governance are common elements to be found in almost all of these players’ strategies.
As we’re starting to have a background and to be able to talk about “smart warehouses” and Logistics 4.0, success is now granted not only by simple deployment of new technologies but by actually understanding which options make the most sense. By rapidly testing and filtering new options and by making sure that the whole company is on board, the final users of a product can differ very much from the person who brings the product into the company.
In order to streamline their way to success, we think there are 5 element warehouse teams should focus on this year:
Leading with data
Warehouse operators now have a great array of options to gather, manage, analyse and interpret data. Their operations can become more transparent and resilient than ever, by deploying advanced technologies such as AI, IoT, or autonomous robots.
Data can be used to predict, monitor, fix, automate processes, reduce costs and even create a better work environment. Some data can be gathered from all warehouse processes, and an in-depth understanding of its role and impact leads to something we’ve all been proven we now need more than ever: resilience.
After experiencing a pandemic and going through economic and social contexts that challenge most commercial and business operators, resilience seems to have become a keyword. For warehousing, supply chain disruptions can take the form of inventory errors, management of high volumes, delays, demand fluctuations, understaffed, and other anomalies that impact the functioning of the business.
Artificial Intelligence comes with the great benefit of being able to analyse all the gathered data quickly and if not avoid, at least predict these disruptions. A predictive program that uses AI can decrease maintenance costs by up to 10%, a Deloitte study says.
Using the best technology
There’s a lot of technology available when it comes to scanning warehouses, with some presenting more advantages than others. Going through a list of pros and cons, we can see that autonomous robots make sense due to some very important features:
Speed - eCommerce is a very dynamic industry a warehouse can serve, with busy months that aren’t just limited to December (actually, “38% of shoppers actually begin making purchases before the end of October”). In this market - but not exclusively, speed is critical. Dexory’s robots can scan over 10.000 pallets/hour, compared to 150 pallets/hour in a manual process. They scan a full rack in one go, and not each item at a time.
Safety - with injuries being a serious concern when it comes to using technologies in a warehouse, autonomous robots are the safest option, as they operate on the ground level. They can “know” and “walk” around the space together with humans, without having to close a space for them to do their jobs. Furthermore, as they easily reach heights of up to 15m, workers don’t need to use forklifts to scan high pallets anymore, so one other risk is eliminated.
Set-up - the more complicated it is to operate a new technology, the smaller the chances for the team to use it in the long term. Compared to other similar scanning devices, autonomous robots only need a plug for a dock and an internet connection and can be up and running in just one week.
Real-time data is one of the main differentiators in the warehousing industry. With only 6% of warehouse operators reporting full visibility over their operations, there’s a huge potential to tap into for forward-thinking players.
We’ve talked about the importance of gathering data, but without systems in place to analyse, organise and provide them in an easy-to-understand manner and fast, time and effort are wasted.
At Dexory, we use autonomous robots to scan stock in warehouses, but we are doubling the hardware with a software piece that ensures end-to-end service for our clients. By using digital twin technology, DexoryView - a digital replica of the warehouse, which is available online, providing real-time data - visibility increases drastically.
Once the locations are scanned, DexoryView offers almost instant insights on item conditions, volume, shelf placement, and shipping, while also issuing alerts when the data doesn’t match.
Through access to real-time data, warehouse operators have a constant overview of their inventory and space management, which then leads to faster, better-informed decisions, as well as to revenue increases (a 2022 report showed that “80% of businesses that implemented real-time data analytics have experienced a revenue increase of up to 21%”).
AI as a tool that enhances human skills
A worker can walk 9 miles or more in a day to fulfil their tasks in a warehouse. They can operate heavy machinery that moves slowly or waste time and resources trying to fix errors, spend too much time standing on their feet, and work night shifts.
All of these translate into stress, a lack of feeling of fulfilment and not only revenue losses but also a huge labour shortage. For teams and management, deploying technology that takes over workers’ most manual, unsafe and time-consuming activities can lead to:
A longer time spent on the job (now, an average forklift operator “stays at their job for 1-2 years”)
Involvement in more strategic activities, that can boost productivity and engage people in a more meaningful manner
A more efficient use of people’s time, allowing them to work shifts and providing a greater work/life balance
Finally, a better employer brand for the company, that will attract the necessary talent to scale.
Focusing on sustainability
Last but not least, sustainability should be on any warehouse’s strategy for 2024 and beyond. With a market that’s predicted to grow, and that has a big impact on the environment (60% of global greenhouse emissions are the result of supply chain activity), there are several actions operators can take for a greener approach.
From the construction and management of the warehouse to the space they occupy, their recycling policies, the renewable energies they opt for and their deployment of green technology, the market must always keep data analysis in mind. A good green approach comes first of all from understanding the issues, addressing them and then constantly monitoring the impact of their decisions.
Digitalisation also plays a huge role in adopting a more fair strategy towards the environment. Technology can ensure more visibility, predict challenges, facilitate inventory, automate manual processes, and optimise the spending of resources.
The benefits of such a shift to a more responsible attitude towards our environment go beyond saying: protecting the area and the community the warehouse operates in, saving money by employing renewable energies, and being perceived as a trustworthy company - to name just a few.
The recipe to success for 2024 is not a recipe. Ultimately, it focuses on each company's values, mission, and goals, but some things speed up the process when they're mixed together.
We see how much data we can now gather from and about a warehouse and how important it is to have enhanced visibility over this data. Transparency contributes to resilience, which is one of the keywords for 2024. The technology is here and it is developing, with some options being better than others for each warehouse.
Autonomous robots will start taking over more and more manual work, but the introduction of tools like this or of other AI-powered technologies can become a strategic benefit, allowing teams to focus on more human-specific work.
A successful warehouse lasts over time and that takes smart decisions. The smartest, right now, is tightly related to our relationship with the environment and everything we’ve talked about before - data, AI, technology, talent - can contribute to making greener, better choices for the future.