Checklist for Future-Proofing Your Warehouse Operations

The traditional method of predicting future warehouse needs based on past data and then adding technology to match no longer works.

Rising consumer demand for faster shipping, persistent labor shortages, escalating costs, and a host of other complex challenges are reshaping the warehouse industry, complicating efforts to plan for the future. The speed and scale of these changes make it tough to pick the right technology to future-proof operations. To succeed, organizations need to prioritize building speed scalability, and agility into their processes.

Customer expectations continue to climb, placing increasing pressure on warehouse operations. High employee turnover, seasonal fluctuations, and competition with major retailers underscore the importance of building agile and efficient warehouse systems for long-term success.

The most effective strategy is to design operations that minimize manual handling and speed up the process from item retrieval to shipping. While every automated system plays a role in meeting this objective, certain key features should be prioritized when automating order retrieval for speed:

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 organizes and prioritizes item picking and retrieval in the warehouse, enabling efficient workflow. By processing orders in the best sequence, it streamlines operations both in the warehouse and beyond. This includes aligning item loading with delivery routes for quicker unloading at each stop and making shelf restocking faster and easier for staff.
   
3. Reactivity:
   Another key feature for long-term operations is reactivity, or the system’s speed in retrieving items. While some systems excel at fetching items from set locations using slotting techniques, it’s crucial to test for edge cases—such as sudden demand for a typically low-demand SKU. In today’s fast-changing environment, slow movers can quickly become best sellers, making it challenging to predict inventory slotting accurately.

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.

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.