DC Velocity - June 2019

Str at e gy

A R C WA R EHO US E TR EN DS ST UDY

notes that even as the volume of e-commerce orders continues to rise, warehouse shipments for store fulfillment are staying flat or declining, as traditional retailers reduce store footprints and trim inventory.

In a parallel finding, participants also indicated that they expected the type of picking performed at their facilities to shift over the next three years. When asked what changes they foresaw to their picking patterns, nearly half ( 48 percent) said they anticipated an extensive increase in piece picking. By way of comparison, just 26 percent said they expected a big jump in pallet picking and 19 percent in carton/case picking.

In order to navigate this shifting landscape, many companies have realigned their fulfillment priorities over past five years. Not surprisingly in an era when shoppers have come to expect instant gratification, speed has become a top priority for most operations. Our study participants are no exception. Asked which capability has grown most in importance over the past five years, 72 percent of respondents said “fulfillment responsiveness” (the time from order receipt to delivery). Lagging well behind were “fulfillment adaptability” (the ability to handle a wide range of order profiles), “fulfillment accuracy” (correct items and documentation), and “ fulfillment throughput.” (See Exhibit 3.) The rising importance of responsiveness shows that DCs are placing increased emphasis on prompt fulfillment in reaction to shifting consumer expectations for same-day or next-day delivery, Reiser says.

THE RUSH TO AUTOMATE

In order to reach those goals, DCs are investing in warehouse technologies such as software and automated equipment. In this regard, they have plenty of options. Visit any logistics trade show, and you’ll find a wide array of products and services promising to supercharge fulfillment operations, from autonomous mobile robots (AMRs) to radio-frequency identification (RFID) tags.

But no single technology can solve every challenge, so our study asked exactly what material flow processes companies were targeting for improvement through technology investments. The top three responses were shipping, goods retrieval and order picking, and packing and labeling. (For the full rundown, see Exhibit 4.)

Next, we drilled down to ask exactly which warehouse
tools were their top priorities for investment over the
next three years. Here, the number-one vote getter was
warehouse management system (WMS) software, followed
by conveyors/automatic sortation, automated palletizing/
depalletizing equipment, warehouse labor management
software, and pick-to-light/put-to-light systems. (See
Exhibit 5.)

All of these choices align with shippers’ need to accelerate delivery speed and wring the maximum efficiency out of their resources, Reiser observes. “WMS still reigns supreme as a must-have in a fulfillment operation, and labor management remains critical for obtaining efficiencies out of your operations,” he notes. “Conveyor and sortation remains surprisingly important,” Reiser adds. “Even though other automation technologies are higher profile or ‘sexier,’ conveyance and sortation is still ubiquitous in warehousing.”

Fulfillment responsiveness (time from order receipt to delivery) 72.4

Fulfillment adaptability (ability to handle a wide range of order profiles) 58.6

Fulfillment accuracy (correct items and documentation) 55. 2

Fulfillment throughput 41. 4

Shipping 47. 6

Goods retrieval/Order picking 42. 9

Packing and labeling 42. 9

Order assembly/Put walls 38. 2

Receiving 33. 4

Put-away/Storage 33. 4

Returns/Reverse logistics 14. 3

EXHIBIT 3

Which of these considerations have increased in
importance over the last five years?

(Percentage of respondents)

EXHIBIT 4

What processes have you targeted for technology
investment over the next three years? (Ranked by
those who said it was “very likely” they would focus
on these tasks)