With consumer demand going through a period of rapid change, it’s unlikely we’ll ever see a return to what once was considered “normal.” While it’s difficult to predict what will happen in the future of the supply chain, we do know that businesses need to streamline legacy processes and introduce new technology solutions to remain competitive. The shift to eCommerce is here to stay, and products ranging from personal goods to necessities like groceries are now widely purchased digitally.
So, what does this mean for warehouses? Demand for commercial real estate continues to surge and increased consumer expectations have driven businesses to explore new warehousing options in dense urban areas. This increased need for warehouse space has been paired with rising labor costs and unstable inventory demands. Organizations need to find a way to do more with less. Here are 4 reasons why modern commerce leaders need to upgrade legacy systems to keep up with today’s demands.
High Labor Turnover
The rise of eCommerce means more movement of goods through warehouses, which in turn increases the need for labor in warehouses, labor which is not easy to come by. Working in traditional warehouses can be physically and mentally demanding, causing high turnover rates in the industry. Employees working in traditional warehouses can also walk up to 12 miles per shift while manually picking items. As a result, employees are leaving the industry altogether or opting to work for high wage companies, like Amazon, who offer increased benefits to make up for harsh working conditions.
By upgrading to modern warehouse solutions, organizations can improve working conditions, increase efficiency, and retain more employees, resulting in lower labor turnover during a time when warehouse labor is scarce.
Lost Space
Labor isn't the only thing that's difficult to come by in today's warehouses. The demand in eCommerce has increased the need for warehouse space. Brick-and-mortar stores are also having to pivot towards omnichannel operations, to which they are not accustomed to handle. According to Insider Intelligence's US Click and Collect in 2020 and 2021 research report, buy online, pick up in store (BOPIS) and click-and-collect sales are expected to see continued double-digit growth rates through 2024. Additionally, challenges at the ports have increased the pressure for retailers to store more inventory locally to avoid delays.
Manual picking comes with restrictions in a traditional warehouse setting. Forklifts have the capability to pick between 16 to 20 feet high, limiting the vertical warehouse space utilization leaving unused space above 20feet high.
The traditional 2D structure of warehouses doesn’t allow for higher stacking or more condensed aisles. In contrast, 3D storage solutions utilize both horizontal and vertical space, reducing warehouse needs by up to 85%.
Time Consuming Manual Processes
When it comes to using humans to pick items in warehouses, these items can only move so fast. A person must walk back and forth, sometimes across long distances, to fulfill orders. Autonomous robots, on the other hand, can move faster and more efficiently with little-to-no downtime. If items are brought to a human worker in a stationary position, the workers can focus more time and energy on other necessary tasks to get an order out more quickly. This not only improves the speed at which orders are completed but also reduces employee fatigue allowing them to work more efficiently and improves job satisfaction.
Excessive Inventory Movement
In traditional warehouses that run on legacy systems, inventory is constantly in motion. Items in an order may be stored on opposite ends of a million-square-foot warehouse, meaning order items must move back and forth until all order items are picked. The completed order then must move to another part of the warehouse for packing and an additional touchpoint for shipping.
The excessive movement of inventory in legacy warehouses ties back to most of the previous problems mentioned: wasted labor, a need for more space, and too much time spent on order picking. By updating to advanced warehouse technology, warehouses can condense space, resulting in better working conditions, time saved, and less movement of inventory.
Why Now is the Time to Let Your Legacy System Go
While traditional warehouses have seen success in past consumer behaviors, the rapid change we have seen in consumer demands and the rise in eCommerce over the past few years has uncovered inefficiencies in old ways of order fulfillment. eCommerce, eGrocery, ultrafast delivery, and other new ways of doing business are not going away.
As we continue to navigate these changes and adapt to new consumer demands, now is the time to let your legacy systems go and upgrade to new warehouse solutions so you don’t get lost in the eCommerce boom. Today’s consumers are open to new ideas and experiences, so there’s no better time to stay ahead of the game and be a trailblazer for change.
