Checklist to future-proofing your warehouse operations

The traditional approach of trying to “predict the future” based on past data and adding technology to match that “future state” is no longer tenable.

Rapid growth of e-commerce, steep decline in labor availability, and growing costs continue to impact the warehouse industry. 

The scale and speed at which these changes take place makes it incredibly hard to choose the right technology to future proof your operations. To be successful organizations need to focus on adding scalability, agility, and speed to their operations. 

Speed: Keeping Up with Customer Expectations

Customer expectations continue to evolve putting very demanding requirements on warehouse operations. When you combine that with the high turnover rates, seasonal nature of the business, and competitive pressure from big retailers, building your warehouse operations for speed becomes essential to their long-term viability. 

The best way to do it is to design your operations in a way that minimizes human touches throughout the operations and cuts the time between item being retrieved and shipped. While all of the automated warehouse systems do it to a certain degree, here are few key functionalities you want to keep in mind when automation order retrieval:

1. High Batch Factor:
   This functionality revolves around grouping together similar retrieval requests to minimize the number of trips the retrieval system has to make. For example, if multiple orders require items from the same area of a warehouse, these can be retrieved in a single trip. The batch factor here would be the metric or algorithm used to determine how items are grouped into batches.
   
2. Order Sequencing:
   This functionality allows to organize and prioritize the order in which items are picked and retrieved in a warehouse. This is crucial in managing the workflow to ensure that orders are processed in the most efficient manner possible.
   
3. Reactivity:
   Another functionality that is critical to long-term operations is reactivity, which refers to the time that it takes for the system to retrieve an item. While some systems excel at retrieving items from a specific location, it is important to test fringe cases like a sudden demand for otherwise unpopular SKU.

Scalability: Changing Throughput Requirements

Businesses are dynamic. You can do your best to predict future growth and volumes, but you have to do so based on the past data. The problem is that the past is not always a good indicator of the future. Even before the past 3 years of constant supply chain disruptions, the average forecast error for demand planning was hovering around 50%, a toss up. 

When you think about it in the context of legacy automation you are left with two choices: buy a smaller system you can quickly grow out of, or a large one that may go underutilized for years. But this is changing with the rapid proliferation of high-performance warehouse robotics that allow you to get the exact throughput you need right now, and scale your system as your needs change later.

This adaptability is perfectly illustrated by one of our customers, Ariat. Faced with sudden growth, Ariat was able to swiftly adjust their operations by expanding their robotic fleet from 57 to 86 in a matter of minutes from the robots arriving to their site. Their experience is a prime example of how the right technological solution can turn challenges into opportunities for enhanced efficiency and growth.

Agility: Evolving Channel Mix

Another variable that tends to throw off future planning is the ever-changing channel mix. We’ve seen an extreme case of that with the hockey stick growth of ecommerce in the past few years, forcing businesses to invest in automated systems to meet the demand from online channels, or sometimes even spin up entire locations solely dedicated to ecommerce.

The problem? With the demand normalizing across brick-and-mortar, wholesale, and e-commerce, many businesses are now sitting on heavy CapEx investments that either need to be retrofitted to better reflect the new realities, or just accept that their systems will be underutilized until the e-commerce orders pick back up. 

That’s why the ability to support both B2B to B2C fulfillment within the same automated system and dynamically reallocate a portion of the system to a specific channel is becoming increasingly more important. At Exotec, we’ve even seen customers change their mind about which channel they want to leverage the Skypod system for mid-deployment as the needs between signing the purchase and deployment shifted.