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Driving the Future of Warehousing

15th October 2014 | Gwynne Richards

In this article, Gwynne Richards discusses the challenges, pressures and opportunities that are driving the future of warehousing

What is the likely role of the warehouse in tomorrow’s supply chain? What might it look like? And which technology will have significant effects on the warehouse?

According to Mark Wheeler, warehouses: “are playing a more important role as businesses...face new pressures to cut costs to enhance profitability and free up capital as well as drive competitive differentiation and business growth”.

The challenges faced by companies today include growth in: omni-channel retailing, significant reductions in order lead times, smaller, more frequent orders, environmental, and recruitment pressures.

Concepts such as fully automated warehouses, carbon-neutral buildings, hybrid trucks, robotics, voice operations, and optically guided picking, are all in their various stages of development.

And what of the need for warehouses in the future? One revolutionary process is additive manufacturing, more commonly known as 3D printing, which is stimulating a number of debates on the future of warehousing and maintenance stores.

Before we look at the potential changes we need to put things into context and be aware that warehousing in the future will be affected by many factors:

1. Globally, we have a growing but ageing population. This means that land will be costly and at a premium, with emphasis on taller warehouses. There is likely to be labour shortages in key areas, which suggests a potential growth in automation, but also the need for elder friendly workplaces.

2. Growing economies. The economies of the developing world are growing significantly where consumerism and the growth of the internet will put even greater pressure on manufacturers and their warehouses. Consumer awareness and demand for new products and services will continue to increase.

3. Attracting staff. Warehousing has not been a career of choice for many people because of its image [according to a recent PWC report (2012)] and companies are having to market themselves better to become more attractive to today’s youth. According to Kewill (2013), Generation Z/the post-90s generation have entered the market as both consumers and employees. Growing up using email, social networking and communications technology such as smart phones, MP3 players, laptops/tablets and games consoles, they have never known a world without them. Adept at switching between multiple platforms, formats and devices, they expect to utilize the technology they are familiar with in the work environment, accelerating the prevalence of Bring Your Own Device (BYOD). Warehouses need to introduce this technology, and thus attract this new generation.

4. The Green Agenda. Sustainability will play a significant role in supply chain operations in the future. The green lobby will look to the supply chain for initiatives in terms of alternative energy use, reduction in CO2 emissions, waste and water usage, and the use of alternative forms of transport. This will include intermodal transport initiatives as well as fuel-efficient Materials Handling Equipment (MHE). Consumers and retailers will also be encouraged to source locally, leading to an increase in demand for neighbourhood or urban warehouses.

5. Energy costs. Fuel and energy costs will continue to rise as fossil fuels continue to decline. Companies will look to warehouse automation and the use of greener MHE, whilst developers and warehouse operators will be encouraged to consider solar panels, LED lighting, wind turbines and the use of waste product for energy production as witnessed recently by J Sainsbury’s initiative at their Cannock store which uses anaerobic digestion to produce the energy required. The potential introduction of Government taxation initiatives to encourage companies to reduce their impact on the environment will also have an effect.

6. An increasing pressure on companies to collaborate and share resources. Many warehouses and, for that matter, transport modes are under-utilized, so pressure from the green lobby and also continued pressure on companies to further reduce costs will encourage companies to collaborate.

Tune in next week for part 2 – What will the warehouse of the future look like?

This is an extract from an article that originally appeared in the October 2014 edition of Logistics and Transport Focus. View the original article here: http://edition.pagesuite-professional.co.uk//launch.aspx?pbid=caae06e6-cf57-488d-8cd0-f96e3006a4bf

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