Supply chain disruptions, increasing customer demands, rising omni-channel fulfillment requirements and scarce labor resources are eating into warehouse efficiencies more and more every day. As a result, these intralogistics trends are emerging to keep organizations one step ahead.
As organizations continue to transition to more semi and fully automated processes in an effort to maintain warehouse efficiencies warehouse automation sales are expected to reach $41 billion by 2027, at a compounded annual gross rate of 15% over 5 years according to business wire.
What exactly can you expect the modern warehouse to look like? Let's dig into the 3 key intralogistics trends that will shape warehouses in the future.
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Flexible Systems |
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Warehouse Robotics |
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Predictive Analytics |
In a fast-moving world with continuously changing demands and increasing real estate costs, companies crave innovative intralogistics solutions. Flexible and dynamic systems are key to managing inventory fluctuations with speed and precision, enabling high product availability and optimizing order fulfillment. Modular and scalable systems seamlessly adapt to operations, allowing internal expansion without forcing relocation.
The rise in desire for flexibility comes from a strong rooted need. A flexible inventory management system can immediately and efficiently respond to a crisis or unexpected peak in demand. In the situation of COVID-19, companies needed to react to supply chain stoppages, regulatory uncertainties, labor constraints and urgent customer needs.
Although COVID-19 is exceptional, managing staffing during spikes and seasonal peaks is standard practice for industries like retail and e-commerce. However, as the labor market continues to prove problematic, companies can't depend on or predict staffing needs. And even when they can, they often can't find labor or count on the labor actually showing up. The unpredictable labor market has pushed automation to the forefront as it helps relieve the labor stress many warehouses are facing today.
Additionally, without flexible and scalable inventory management system, facilities often have large empty spaces for a significant portion of the year - using these spaces peak times. As warehouse and distribution rents in the United States continue to rise (22% year over year to $18.70/square foot), the unused space becomes more valuable. As costs increase, the benefits of automation become even more apparent.
Flexibility is the foundation for Automated Storage and Retrieval Systems (ASRS). They can reduce the required footprint by 85%, cut down on labor costs and ensure an ergonomic working environment. Their ability to add or reduce capacity without impacting a facilities overall footprint is extremely cost effective in terms of real estate space and productivity rates.
Driven by rapid technological advancements and greater affordability, robotics solutions are rapidly entering the supply chain. According to the Hyundai Motor Group, the global robotics market is expected to rise 32% by 2025, when the market will be worth an estimated $177.2 billion.
Robots are adding speed and precision to struggling processes across the supply chain. They support zero-defect processes, boost productivity and cut costs while meeting increasing customer demand. Globally robots are being integrated into the supply chain to maximize efficiencies.
Additionally, a variety of warehouse robotics are now available including Autonomous Mobile Robots (AMR), Automated Guided Vehicles (AGV), pick and place robots and robotic cube storage technologies. Although different in specific capabilities, as a whole, robotics are transitioning warehouses to faster, more precise facilities across a variety of industries. It’s expected by 2025, 45% of all manufacturing will be performed by robotic technologies according to the Piece Picking Robots Market Growth Report from Mordor Intelligence.
Modern Materials Handling looked at factors motivating organizations to pursue robotics in warehousing and distribution centers with the top three being: increase throughput; help address labor constraints and improve labor productivity. When considering the flexibility and scalability of robotics, the advantages are evident. The interest in robotics is tied to the growing interest in minimizing infrastructure and allowing warehouses to move, restructure and reconfigure at a moments notice (for example, creating the rise in AMRs over conveyors).
The scalability of robotic technologies is also driving this trend towards robotics in warehouses. The ability to add robots and increase throughput as needed provides the flexibility warehouses are so desperately searching for. When consumer demand increase, simply add a few more robots to tweak the system throughput up. In some cases, facilities are renting robots on a short term or monthly basis to handle high demand peaks.
Robotics are also being deployed to work alongside humans and ease the pressure of the current labor shortage. Facilities can add robotic technologies to support manual labor with repetitive and tedious tasks – improving the worker’s overall productivity. For example, it’s possible to batch pick to a group of AMRs rather than a typical static batch station or pick from an ASRS using pick and place robotic solutions.
According to SAP, predictive analytics is a branch of advanced analytics that makes predictions about future events, behaviors and outcomes. It uses statistical techniques – including machine learning algorithms and sophisticated predictive modeling – to analyze current and historical data to prepare for unplanned occurrences.
Instead of rigid processes, future decisions will be made more independently by systems using algorithms. This algorithm based approach will enable flexible, faster and more cost effective production. Warehouses will enable tools and systems that capture data at a machine level with the help of sensors and push it into the cloud for pre-processing and cleaning to then use for predictive analysis.
Realistic examples of how warehouses are already using predictive analytics include:
Further, the MHI Annual Industry Report shows the adoption rate of predictive and prescriptive analytics for supply chain innovations and technologies will jump from 28% to 79% in the next five years. In anticipation of this need, many material handling technologies are already starting to offer predictive analytics based digital services, such as Kardex Connect. Kardex Connect enables customers with Kardex ASRS technologies to receive customize reports, machine insights and KPIs to increase efficiencies.
Technologies that were once unimaginable are now affordable and solving real time challenges throughout the supply chain. Automated technologies are the key as warehouses modernize and prepare for the future.