High street retailers might be feeling the pinch as footfall is lower than in previous years, but online sales are more than making up for this trend. Globally, e-commerce is booming. This radical change to the way we all now shop – as consumers and businesses – means that warehousing and logistics have become critical competencies for all manufacturers and retailers to get right. Technology is being used to address core challenges, to equip suppliers with the capabilities they need to satisfy consumer demand for ‘instant gratification’ and also, to help the brands themselves become more efficient. A recent global research study found 80% of companies intend to invest in new warehouse technology as part of their strategy to become more competitive, with 60% reporting challenges due to inadequate labour efficiency and productivity as a key driver.
Indigo Software’s latest blog outlines some of the key findings from a major new research report into the way manufacturers and retailers intend to be using technology in the warehouse and their plans for the future. It provides a useful benchmark for any company considering investing in warehouse management system (WMS) software.
Strategic goals for manufacturing and retail businesses
For manufacturers, their primary goal is improving response times as pressure from customers is creating a need for faster turnarounds and smarter fulfilment strategies. E-commerce is changing the way manufacturers are operating; it has created new direct revenue streams thanks to the arrival of dropshipping.
86% of manufacturers are planning to implement single item picking and shipping processes in the next 5 years – if they haven’t done so already. They are also looking to reduce inventory levels, pushing stock further down the supply chain in a bid to reduce costs and commercial risk. 84% of organisations plan to adopt ‘Just in Time’ manufacturing by 2025.
Retailers have other issues when it comes to warehouse optimisation and are prioritising fulfilment speeds. Customers want their items ASAP and they don’t want to pay a premium – or they will simply look elsewhere. In response, 82% of retailers are looking to implement regional or last mile fulfilment centres, which are closer to their customers. This means a larger number, of potentially much busier warehouses to manage.
WMS at the heart of business improvements
At the heart of many of these business transformation programmes is the warehouse and the WMS. This is because a WMS is recognised as being a critical foundation technology to enable any warehouse to operate cost efficiently, with 70% of organisations prioritising resource planning, management and inventory tracking as key functionalities. Using a WMS, a business can manage every aspect of its warehouse operations – goods, assets, people, workflows and sales order transactions.
New research has highlighted that over the next five years, decision makers will upgrade or add additional modules to their existing WMS, or migrate altogether to a full-featured, best-of-breed system. Given that leading WMS systems are being developed to be mobile first, this will enhance the mobile-user experience, providing visibility of operations from anywhere and enabling data-driven performance optimisation.
Mobile first WMS benefits
Mobile working will become ubiquitous, as 73% of organisations intend to equip workers with mobile devices – either smartphones or traditional rugged devices. Of these, over 80% will be Android O/S based. Priorities for implementing a company’s mobile WMS functionality range from improving worker efficiency (43%), enhancing workflow flexibility (39%) and reducing the impact of resource availability fluctuations (39%).
Real-time information benefits
By far the most important feature of a WMS is its ability to deliver real-time information when and where it is most needed by the business. WMS systems need the ability to include real-time data from ‘location-aware’ solutions, sensors and systems, which are located throughout the business. As decision makers focus on greater asset visibility and utilisation, real-time guidance and data-driven performance, these advanced WMS features are essential to ensure warehouse optimisation. According to new data, 43% of organisations plan to implement real-time location systems (RTLS), 55% of decision makers plan to continue evolving their RTLS solutions, or they will implement new solutions of this type by 2024. Between now and 2025, 80% of warehouse operators plan to integrate their WMS with logistics and transportation management systems (TMS), to ensure better visibility across the supply chain.
Best of breed WMS or ERP?
Today around half of companies are using legacy or manual systems in the warehouse, or they have implemented an ERP system which they use as a compromise to having a full WMS. Over the next 5 years, this weighting will change as the majority of companies start to acknowledge the many advantages a WMS brings and introduce a full-featured warehouse management software solution.
In the near future, after they’ve laid the groundwork by implementing a full-featured WMS, improving teamwork and utilising advanced technologies, warehouses will integrate more holistic solutions. This process will enable them to build data-powered environments that balance labour and automation in the warehouse, ultimately empowering front-line workers with a performance edge.