BY HENRIC HASTH
For anyone who runs a warehouse, safety, availability, and efficiency are three long-standing cornerstones that will become even more important in the future. The factors currently reshaping the warehouse and creating both opportunities and challenges can be summarized by the following keywords: e-commerce, automation, sustainability, flexibility, and predictive data.
E-commerce
The rapid growth of e-commerce and its impact on our purchasing patterns, combined with a high pace of innovation in both hardware and software, are driving today’s intensive development of warehouses. E-commerce has become a priority for virtually all companies, making it necessary to manage multiple parallel, fast, and efficient logistics flows. For example, we’re seeing a rapid increase in return flows, flows from large central warehouses to smaller warehouses closer to consumers, and flows between warehouses and end customers. In these new, more complex supply chains, the supply chain in general—and the warehouse in particular—is a crucial strategic piece of the puzzle. Additional complexity arises from e-commerce’s drive toward a growing product range and smaller order sizes. Add to this all the delivery solutions being launched in the wake of e-commerce—delivery lockers, pickup points, home deliveries, and more—which require increasingly diverse, fast, and efficient fulfillment.
Automation
According to our analyses, automation solutions will soon account for 25–30 % of investments in internal material handling, and that figure will increase steadily. In simple terms, automation solutions can be divided into two types:
- One type of automation consists of larger, fixed automation solutions that work best for large, stable flows. A prime example is the Swedish grocery retail sector’s ongoing investments in large, fully automated central warehouses.
- The second type of automation solutions is more flexible in nature, consisting, for example, of AGVs (Automatic Guided Vehicles) and AMRs (Automated Mobile Robots), which are suitable for workflows requiring high flexibility or for small, repetitive workflows where fixed automation solutions would be too costly. An example of these more flexible solutions can be found in smaller, consumer-facing warehouses for micro-fulfillment.
The Flexible, Data-Driven Warehouse
The dynamics of today’s business world and the rapid pace of change mean that everyone wants maximum flexibility in their warehouse solutions. In the warehouses of the future, we need to build in the capacity for change and work much more flexibly than we have to date. This applies to everything from work methods and processes to the times of day when different tasks are performed and the technology solutions that are chosen. To make the right decisions—both in real time and in the short-, medium-, and long-term—warehouses will need to become much more data-driven. In the long term, this involves using data-driven analyses to plan for future investment needs in warehouse and materials management. In the medium term, the focus is on gaining a solid understanding of future demand and, based on this, planning product availability and capacity. In the short term, data is needed as the basis for forecasts and daily capacity planning. For decisions that must be made essentially in real time, machine learning and similar technologies enable us to quickly make the right decisions regarding, for example, picking routes, optimal staffing, and what tasks—and in what order—should be prioritized. For us, this development means that we must utilize all our expertise, resources, and capabilities to help our customers develop the warehouses of the future by offering combinations of flexible, automated, and data-driven warehouse solutions that can handle increasingly complex parallel goods flows with high demands for sustainability, productivity, and customer service.
Henric Hasth is the CEO of Toyota Material Handling Sweden
