Top ten warehousing predictions for 2015 and beyond

As warehousing operations are coming under mounting pressure to perform to support growing demands of the omni-channel customer, Tom Kozenski, VP Solution Strategy at JDA Software, discusses what trends are emerging and what their impact will be.

Tom Kozenski, VP Solution Strategy at JDA Software
Tom Kozenski, VP Solution Strategy at JDA Software

Legacy supply chain execution applications will be put to bed

Many warehouses are still running on older, legacy Warehouse Management Solutions (WMS) that have been developed and deployed nearly a decade ago. This is because the functional requirements for WMS have not changed much until now and that WMS upgrades have historically been very expensive. However, the current approach to warehousing will require dramatic changes to support the fulfillment of smaller orders, compliance with government and industry regulations, and the need for more intimate integration between critical business applications. Cloud technology is making this transition from old to new much easier by allowing warehouses to better utilise technology and computing capacity to meet these range of challenges.

Omni-channel will not be just for retailers

The buying behavior of the consumer is moving towards omni-channel at a rapid pace. Vertically-integrated manufacturers will want to expose their products in such a way that they can maintain and perhaps increase the overall market-share of their brands. In order to do so, they will have to retool their warehouse operations to better execute the fulfillment of these smaller, less predictable order flows. To succeed at this, manufacturers need extended visibility of their inventory and orders across their supply chains. Doing this in the past was costly. However, due to the heightened requirements for order fulfillment and traceability, visibility has now become essential. Companies can’t effectively execute without it.

In-store fulfillment will complement fulfillment from the distribution center

There is a relatively new supply chain term known as order from anywhere/ship from anywhere. The latter applies to the new concept of in-store order fulfillment, where consumer orders are processed within stores instead of a warehouse, either because the warehouse is out of stock, or the store is closer to the consumer’s home. This will require that each store has a simple variation of warehouse fulfillment logic, such as click-and-collect or ship-from-store. Essentially, brick and Mortar retailers will need to be able to use their store inventory and store personnel to do this more efficiently to better compete with the pure-play online retailers that just offer on-line ordering and shipping.

Product safety will be deeply embedded into supply chain execution

The level of product recalls and product quality complaints has never been higher. This applies to not only to the food and fashion sectors but to virtually every type of product that is processed or assembled today. As a result, companies will be required to be more accountable for the quality of their products and responsible for tracking when and where they have been distributed. In order to achieve this level of control, every customer transaction needs to maintained in a database that is readily accessible. This database must have the capabilities to enable users to create queries to find out what customers may have purchased tainted goods. From here, an automated recall notification process should be put in place to swiftly notify customers of any issues and what they should do about it.

Automation is playing a larger role in warehousing

Automation has always been an important aspect to many supply chain operations. It has a long history of providing value in warehouse operations that require a large amount of human labor and/or large amounts of travel time in a warehouse facility. With the emergence of a tremendous volumes of small, single, on-line ordering, each company must evaluate how the proper use of automation can complement their workforce whilst improving throughput & lowering overall operational costs.

Mobility will be prevalent

Tablets and smartphones will be the computing tools of choice for users of WMS applications. Mobile solutions will benefit: the supply chain executives that will want real-time access to overall SCE performance data across an extended network of facilities; the warehouse supervisor that needs to monitor the status of outstanding tasks within the facility while out on the floor; the inventory control clerks that maintains location-level inventory accuracy; and quality control clerks that ensure product quality and/or order accuracy through auditing.

WMS will continue to penetrate the manufacturing plant

At many manufacturing sites, the warehouse is just on the other side of the wall of the assembly plant. These plants typically have their own applications for managing inventory and staffing, known as Manufacturing Execution Systems (MES). The capabilities of the some of the current WMS applications have the functionality to manage; Work Orders as well as Consumer Orders; Production Lines; Picking Lines; and Raw Materials as well as Finished Goods. Utilising a single application to manage both manufacturing and warehousing will provide a higher level of efficiency to manufacturers, workers, machinery, and storage locations can all be shared across both areas.

Engineered Labour Management will become mainstream

Engineered Labor Management standards enable warehousing businesses to get their workforces to perform the right tasks in the right way. Currently, they are not widely used in warehouses or distribution centres, though grocery business have benefitted from them for decades. Research shows that the average warehouse without formal labour management capabilities operates at about 65-70% of its total efficiency, meaning that it is possible to improve workforce productivity by 30-35%, without stretching capacity. By studying operational processes, use of warehouse equipment and the environment of the warehouse, businesses can develop totally efficient processes around each task. Furthermore, deploying labour management processes alongside adequate training and change management procedures ensure warehouses will reach maximum workforce productivity.

Big Data has its place in warehousing

Without question, there’s lots of talk going on regarding the business value of Big Data, warehousing business included. Each point mentioned above will require some form of storing and access to large amounts of supply chain data. This data includes the order information prior to the orders being fulfilled, so that alternate fulfilment decisions can be made throughout the day. Order history information is too required, so that the right consumers can be notified if there are any quality or recall issues; it can also be used to track consumer buying patterns. Additionally, Bill of Material information is needed to identify tainted components that may have been used to build other larger products. Lastly, serialised inventory is needed to track unique high-tech or automotive products; it is also increasingly being used to meet emerging compliance and regulatory requirements for tracking items within the Pharma spac.