Surveys sometimes surprise me. A recent one from Motorola Solutions Inc., for instance, got me thinking about what lies ahead in a part of the supply chain that often isn't considered sexy, but is important from a cost and inventory management standpoint.
Motorola Solutions' Future of Warehousing Survey indicates that mounting market and corporate pressures, plus a push to capture new opportunities, could lead to significant expansion in the number of warehouses and distribution centers companies operate. By 2018, more than a third of the 328 survey respondents in manufacturing, retail, wholesale, and third-party logistics markets said they plan to increase their warehouse and distribution operations. That would be a 71 percent increase from current expansion plans in action today, the report notes.
Here are a few other key stats and findings that could influence what the warehousing and distribution scene looks like for the next five years:
- Company management views warehouses and distribution centers as assets that can drive growth for the business, according to 26 percent of respondents.
- A mix of cost-savings and revenue-growth initiatives are the most commonly cited reasons for the expansion of storage and distribution networks, generally with a focus on: Lower transportation costs (36 percent), shorter delivery times (35 percent), new suppliers and trading partner locations (31 percent), and heightened omni-channel pressures (11 percent).
- Approximately two-thirds of respondents plan to increasingly automate processes and equip staff with new technology solutions during the next five years.
- To help reduce order fulfillment costs, and to increase worker efficiency and productivity, the picking and replenishment solutions of the next five years are expected to shift towards more multimodal operation. This could lead to a 142 percent increase in the integration of voice-directed and screen-directed picking on flexible mobile devices along with a 113 percent increase for voice-, scan-, and keyed-response workflows.
- Only 67 percent of items received at warehouses are bar-coded today. Survey respondents expect supplier management initiatives and trading partner compliance requirements to drive higher utilization in the coming years — reaching an estimated 84 percent by 2018.
So what does that mean for the supply chain and logistics group? The surprising part of this is that there could be significant changes ahead for the everyday routine of moving parts from Point A to Point B.
Think about it. If distribution centers and warehousing operations are increasingly seen as an important business-growth assets by C-level executives and there's a parallel investment being made to automate processes, increase bar-coding and comply with trading partner requirements, it won't be long before we're hearing these same executives talk up ROI goals, bottom-line savings, and other money-saving distribution strategies. All of that will come full circle back to the supply chain group to manage — and excel at.
Mark Wheeler, director of Warehouse Solutions at Motorola Solutions echoes this sentiment in a written statement as well:
Warehousing and distribution have not traditionally been the most celebrated functions within leading businesses across manufacturing, retail, and wholesale industries. But Motorola Solutions' Future of Warehousing Survey revealed that these functions are playing a more important role as businesses in these industries face new pressures to cut costs to enhance profitability and free up capital as well as drive competitive differentiation and business growth.
Is your company re-evaluating its warehousing and distribution strategy? How will you and your team prepare for this shift?