The warehouse is being transformed through the adoption of technology. A recent study by Zebra looked at the company’s warehouse vision for APAC. Industrial Automation Asia (IAA) spoke with Stuart Scott, solutions marketing lead, Zebra Technologies Asia Pacific on this study and the future of the warehouse.
What are the most significant changes that have occurred in the warehouse in the recent years, and some of the trends (eg: e-commerce) that have prompted these changes?
Stuart Scott (SS): Several evolutions have happened in the warehouse industry. A traditional warehouse is staffed with workers manually stocking shelves, running from aisle to aisle, and filling out paperwork with pen and paper.
In the warehouse of today, we are seeing barcode printers and scanners, handheld computers, vehicle mounted computers, Radio Frequency Identification Technology (RFID) scanners and printers, robots, and automated shelves. In addition, some warehouses are even talking about using drones for asset location and cycle counting.
These changes in warehouses are prompted by recent market trends, particularly, e-commerce. The boom of e-commerce has provided customers with an array of options to choose, purchase, and receive goods. This has, in turn, fueled greater expectations and demand, leading to the need for changes in warehouses.
With heightened demands from the marketplace, delivery needs to be faster yet accurate — as customers increasingly expect same-day or even time-definite deliveries. Reliable infrastructure coupled with ample adoption of technology allows the logistics industry to withstand and accommodate the diverse e-commerce requirements.
This is becoming more and more apparent, especially in the region. Forrester recently forecasted that total online revenues in China, Japan, South Korea, India and Australia will almost double from US$733 billion in 2015 to US$1.4 trillion in 2020. Currently, revenues in these markets already surpass the combined figure for the US and Western Europe. Southeast Asia’s e-commerce market is poised to grow even faster, with Frost & Sullivan predicting that the market would grow from US$11 billion in 2015 to over US$25 billion by 2020.
Aside from e-commerce and the move towards the increasing use of the Internet of Things (IoT) and automation in warehouses, cloud adoption is also starting to make large inroads into the warehousing industry. Warehouses are increasingly migrating to on-demand and cloud-based, Software-as-a-Service (SaaS) warehouse management systems to reduce costs in terms of on-premise equipment and personnel. This coincides with the Warehouse 2020 findings which showed that warehouses of the future are expected to be smarter to serve today’s connect customers. The study also prompted operations professionals to take a hard look at upgrading their warehouses with an eye towards boosting productivity.
What were the key findings from Zebra’s recent Warehouse APAC Vision study?
SS: Key findings from the APAC Vision Study include:
- In Asia Pacific, 74 percent of respondents have plans to outfit their warehouse staff with technology, specifically to raise investment in Internet of Things (IoT) (72 percent), barcode scanning technologies (70 percent), tablet computers (69 percent), big data/data analytics (67 percent), and warehouse/truck loading automation (64 percent) in the next five years.
- Half of the respondents say warehouse investments are mainly driven by the need to reduce transportation costs, while 41 percent demand shorter delivery times, and 38 percent see the need to accommodate new supplier and trading partner locations. Other factors include a change to inventory policies (33 percent), talent/skill shortages (28 percent), and omnichannel pressures (21 percent).
- Currently, 81 percent of respondents are using legacy Warehouse Management Software (WMS), and this number is projected to drop by half from 81 percent to 40 percent in 2020. By contrast, full-featured WMS and Real-Time Location System (RTLS) will grow its usage by an average of 29 percent in five years.
- Executives surveyed expect to see growth in the percentage of inbound items that will be barcoded in the next five years, from 59 percent to 78 percent.
- In inventory management, 86 percent of respondents said they will use mobile handheld computers and tablets with real-time access to WMS, while 79 percent of them plan to use RFID-equipped solutions. Only 24 percent of those polled expect to continue using pen and paper in 2020.
How can smart warehouses help manufacturing companies to integrate better into end-to-end business chains, such as with logistics partners and material providers?
SS: Smart warehouses allow manufacturing companies to have enhanced visibility into warehouse operations.
Manufacturers and distributors often find themselves to be at the mercy of what it is called the ‘bullwhip effect’, whereby a small change at one end of the supply chain causes a much bigger change at the other end. In turn, this makes predicting supply and demand an elusive practice, affecting end-to-end business chains, such as logistics partners and material providers.
Experts say that the bullwhip effect results from bad or incomplete information. To resolve this, businesses need to enhance the quality of their information, through knowing what is happening as it is happening. This is where the concept of visibility comes in.
Enhanced visibility is achieved via the use of technology in the warehouse. For instance, pen-and-paper-based spreadsheets are to be replaced with mobile handheld computers and tablets to provide real-time access and data. This wave of next generation, technology-enhanced warehouses is bringing unprecedented levels of real-time visibility into organisations’ assets, people and transactions across a myriad of industries, from discrete manufacturers in automotive, electronics and machinery to food and beverage processing companies, to the healthcare and pharmaceutical sectors, just to name a few.
In Zebra’s Warehouse APAC Vision study, IoT, barcode scanning technologies, and tablet computers came up tops as areas that warehouse executives expected to raise investments. How will these technologies help warehouses achieve efficiencies they need and reduce the physical footprint of storage spaces for manufacturing companies?
SS: Zebra’s Warehouse APAC Vision study shows that in Asia Pacific, at least 74 percent of warehouse managers have plans to outfit their staff with more and better technology that increases the visibility of operations, and automates tasks that were previously performed manually. For example, barcoding and RFID-tagging items that are traversing across the warehouse help staff accurately track their location and remaining stock. This, in turn, allows a longer lead time before items have to be replenished.
According to Zebra’s survey, the top five technologies that warehouse managers are most interested in include IoT, barcoding, tablet computers, big data/analytics, and automation. Wearables and RFID are also two sought after technologies in the warehouse. Compared with results for the 2015 vision study, only 40 percent of warehouses surveyed were planning to adopt RFID then, but the figure has grown twofold in the latest survey.
With ergonomic wearables and handheld computers built for the enterprise environment, workers are enabled to scan and track items with faster speed, less effort, and better accuracy. The use of mobile handheld computers and tablets with real-time access to warehouse management systems will double from 40 percent in 2015 to 86 percent in 2020. In the meantime, the use of pen and paper is expected to drop to 24 percent in the next four years, down from 95 percent just a few years ago.
The wearables deployed in the warehouse are often multi-modal, which means, with one device, workers can access multiple functions. For instance, the device can ‘hear’ and respond to voice prompts, display text or pictorial information on its screen, scan barcodes and capture RFID tags, take a picture to identify damage on an item, and allow workers to input the quantity of items they would like to pick on the touch screen.
IoT is also another area that has definitely made and will continue to make a significant impact on the market. It continues to enable companies the access to unprecedented amounts of data, insights and visibility on many aspects of their business, such as processes, assets, personnel, and more. Technology solutions in the category known as Enterprise Asset Intelligence can help them make real-time business decisions that directly impact their bottom line.
These technologies bring about numerous benefits: from increased productivity amongst workers to faster delivery time, to creating greater value for end-customers.
In 2025, in your opinion, what will the warehouse and the logistics sector look like?
SS: In 2025, the warehouse of the future would be one that has a robust infrastructure in place; one that embraces smart technologies and tools that allow them to operate at optimal productivity, achieve supply chain integration, and gain full asset visibility and actionable insights. This is what we call Visibility that’s Visionary.
Real-time visibility will be a key competitive differentiator. Decision makers can make better-informed decisions and manage their resources with greater deployments of data capture technologies such as imaging solutions for quality checks, barcode scanning, and dimensioning systems for cubing of the items for high-density storage and transportation.
Enterprises would have access to real-time actionable intelligence in a constantly shifting supply chain landscape, allowing them to sense what is happening through actionable analytics on staff, goods and assets. This would allow organisations to make more accurate analysis and predictions to adapt quickly to inventory conditions.
By monitoring and analysing processes, warehouses will also be able to streamline them as well as optimise workforce productivity. Workers will be equipped with the latest technologies designed to deliver maximum productivity as well as maximum comfort for the worker, reducing worker fatigue. The perfect warehouse is one that will continuously strive to be future-ready.
What is the single best initiative a company can take now, if they want to effectively leverage and get the most out of the changes to the warehouse and logistics sector over the coming decade?
SS: The single best initiative a company can take now is to embracing technological advances such as IoT. As companies make more innovative and intelligent use of IoT, they are improving their ability to more accurately track inventory throughout the supply chain and maximising real-time workforce direction and communications. Manufacturing operations are running more efficiently than ever before due to the installation of smart machinery and sensors on connected factory floors driving less machine downtime, better asset utilisation and faster time to market.
Zebra’s IoT solution offerings allow businesses to gain real-time operational visibility and knowledge; helping simplify workflows, reduce costs, increase warehouse productivity and manufacture products of exceptional quality. Zebra’s advancements in automation and tracking technologies enable manufacturing organisations to gain competitive advantage from real-time Enterprise Asset Intelligence. Zebra delivers technologies that help businesses streamline operations by shaving seconds off processes, driving down defects, cutting costs and improving productivity, while helping workers to work more safely.
As a result, supply chain networks are poised to undergo an extreme makeover over the next few years. Indeed, the retail, wholesale, transportation and logistics sectors are already transitioning to ‘best-of-breed’ warehouse management systems that take automation to new heights — from equipping workers with mobile devices that increase the speed and accuracy of order picking, to the roll-out of RFID for real-time inventory visibility.