Understanding Technological Disruption in Warehousing, Logistics and Supply Chain Management | Sparks
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Understanding Technological Disruption in Warehousing, Logistics and Supply Chain Management

Abstract

  • Disruption from Digital Technology has pervaded every industry including Warehousing, Logistics and
    Supply Management Sector
  • Modern warehouses increasingly use technologies such as Warehouse Management Systems, RFID, Barcode, OCR and Voice Guidance Systems
  • These technologies help warehouses to reap substantial benefits such as reduced labor costs, increased efficiency and improved process optimisation
  • With technology, most warehouses today are either fully or partially automated

What is Digital Disruption?

Since the dot-com boom, which was started in the mid-1990s, the world has started using and adopting the internet more rapidly, extensively and ubiquitously where information technology has now seeped and integrated into our lives so swiftly and vastly, it is almost impossible to think of a world where we could live without technology.

In a world where technology increasingly gets infused with human life in general, businesses throughout the globe have transformed from using analogue methods and traditional business models into adopting digital technologies and novel business models to suit these technologies. This is known as Digital Disruption.

“Businesses who fail to stay ahead of the digital curve run the risk of losing business as markets get increasingly digital”

These novel technologies and business models impact the way customers behave, how existing products and services are offered and how businesses are structured; hence the usage of the term “disruption”.

Businesses who fail to stay ahead of the digital curve run the risk of losing business as markets get increasingly digital; this is evidenced by the fate of Kodak Cameras as the once-dominant producer of cameras during the 20th century failed to capture future markets as they weren’t able to understand and keep up with the changing identities and needs of their customers.

Another concern for businesses in this disruptive atmosphere is the question of taking the correct business decisions within the new digital market. Nokia, once the most dominant manufacturer of mobile phones ran out of business as it failed to keep up with the then-new trend of smartphones. The decision to use Windows Mobile on their phones instead of Android proved deadly as Windows Mobile failed to gain the same popularity and market share Android did.

How Digital Disruption affects Warehousing and Supply Chain Management

Unsurprisingly, digital disruption affects the Warehousing, Logistics and Supply Chain Management sector as well. It is going to be absolutely important for businesses which operate in this sector to stay updated on the effects of digital disruption and the latest technological trends in order to stay ahead of the curve in the market and continue to grow.

To understand how digital disruption affects the warehousing sector, first, we must look at how Warehousing operated traditionally.

If you take a warehouse in the 1990s, the most conspicuous factor would be having a lot more personnel handling operations than a typical warehouse today. It wasn’t uncommon for a warehouse to have multiple supervisors and a plethora of workers. However, warehouses today require significantly less number of personnel to operate mainly thanks to technology. New technologies that help to reduce labour either make the available labour more efficient or eliminate the need to have labour altogether.

“WMSes have reduced the need for paperwork and have made warehouses more organised, leading to more efficient work practices.”

Warehouse Management Systems (WMS) are one of the technologies which have been digitized and improved substantially over time, thereby making warehouse operations faster and more efficient.

WMSes have reduced the need for paperwork and have made warehouses more organised, leading to more efficient work practices. This alleviates some of the most common problems associated with traditional warehousing such as readability issues and lost paperwork. In addition, the use of less paper reduces operating costs and helps the environment.

Meanwhile, scanning technologies such as barcode scanning and RFID eliminates the need for data entry where voice technologies increase efficiency as employees would no longer need to look down at their displays; it also enables warehouse personnel to get more done in less time while reducing human error significantly.

Warehouse Automation, on the other hand, has seen the most significant effect on the warehousing sector; which while still being a nascent technology, proves to have the highest potential as they keep increasingly affordable and powerful.

In summary, Warehouse Management Systems, automation, technologies such as Barcode, RFID and voice guidance systems all in unison make warehousing more efficient, sustainable and cost-effective.

Warehousing Today

With new technology, today we have two types of warehouses:

1. Partially Automated Warehouses
2. Fully Automated Warehouses

Partially automated warehouses are automated to a certain degree but still, people play a significant role in managing day-to-day operations. You can expect to find technologies such as Warehouse Management Systems, RFID technologies and even Robotics in the form of automated forklifts in warehouses like these.

“most companies still rely on practices where people still shoulder a higher percentage of the workload.”

Fully automated warehouses, on the other hand, have very little involvement in manual labour. These warehouses can be expected to use more advanced technologies such as automated logistics and automated storage and retrieval systems (AS/RS) which are integrated into a warehouse’s WMS. AS/RS systems dramatically reduce the need for manual labour as storage and retrieval are done completely via automated machinery offering much higher levels of productivity and efficiency.

Full automation is still rare as it requires a higher level of literacy in Information Technology, awareness of disruptive trends and newer business models associated with them. And so, most companies still rely on practices where people still shoulder a higher percentage of the workload.

“digital software solutions for warehousing take substantially shorter time periods to return on their investments”

Apart from the benefits mentioned above, digital software solutions for warehousing take substantially shorter time periods to return on their investments and these solutions are now getting increasingly affordable to install and maintain.

Furthermore, Big Data Analytics helps businesses to eliminate weaknesses in processes and software such as inventory management tools which aid in optimising stock levels.

How Zone24x7’s Technology has enabled digitization in the Warehousing Sector

As a technology and innovation partner for a myriad of clientele for over 15 years, Zone24x7 has managed to consistently deliver world-class technology solutions to successfully get businesses synergistically aligned with the new digital economy by embracing digital disruption; especially in the warehousing, logistics and supply chain management sector.

Study 01: A Cross-Border Digital Logistics Company

Zone24x7 managed to improve the monthly performance of the inbound operations of a cross-border digital logistics company by 19% in 5 months with the inbound inventory management solution we implemented. This solution contained an OCR engine to capture incoming package details, camera-based item inspection, automatic package dimensioning, weight scaling and a handheld device-based put-away solution.

“over 95% weekly inventory accuracy improvement in 5 months with RFID based cycle and inventory counting and handheld device-based bin transfers and verification”

In the meantime, the inventory controlling solution we implemented enabled them over 95% weekly inventory accuracy improvement in 5 months with RFID based cycle and inventory counting and handheld device-based bin transfers and verification.

This solution combined with an online eCommerce platform impacted order fulfilment by improving hourly performance by over 70% in 5 months and outbound delivery management by improving SLA performance by over 69% in 5 months. We used handheld device-based order picking to support rule-based order picking and inventory inspection while using automatic inventory packing dimensioning and weight scaling to support inventory packing. For outbound delivery management – delivery shipment scheduling, outbound inventory loading and gate pass verification were supported with RFID based outbound inventory verification.

In addition, BI based reporting and dashboarding was implemented.

Study 02: Mobile Retail Company

Zone24x7 developed a warehouse management system for a mobile retail company where we supported inbound goods receiving through RFID tagging. Bins were mounted with RFID antennas to automate inventory reading and we achieved 99% inventory read accuracy in 1 month.

“impacted outbound delivery management by achieving 99% inventory read accuracy in 1 month”

We impacted outbound delivery management by achieving 99% inventory read accuracy in 1 month by mounting Fixed RFID Reader and Antennas on Delivery Vans.

In Summary

In an economy where information technology and digitization is ubiquitous, warehouses are getting increasingly digital. Most warehouses are at least partially automated where more and more warehouses are en route to being fully automated.

It’s crucial for warehouses to be updated with digital technology and business practices in order to stay ahead in the market.

Zone24x7’s cutting-edge technology stack and extensive consultation experience can help businesses to adopt digital technologies swiftly and affordably so they can thrive and expand in the modern digital economy.


Ashen Monnankulama is an Associate Business Designer at Zone24x7. You can follow his updates on LinkedIn and Instagram.

Cover Photo by Ramon Cordeiro on Unsplash

Ramon Cordeiro

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