TRENDS

The New Outlook For Warehouses And Distribution Centers

by ManagerPlus on August 26, 2020
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Asset Management Toolkit
 

Online sales are skyrocketing, driven in part by the COVID-19 pandemic, and many leading warehouses and distribution centers are embracing enterprise asset management (EAM) software to meet rising demand.

According to USA Today, 100,000 brick and mortar stores are now predicted to close over the next five years. With a higher volume of individual shipments going directly to consumers, warehouses need to increase efficiency.

Growing demand for e-commerce

Due to increases in online shopping, warehouses are dealing with more and more orders. In 2019, the total share of online retail surpassed general merchandise sales. In other words, more people were buying online than from department stores, warehouse clubs, and supercenters.

The growth in e-commerce orders is the result of:

  • Rising digital literacy among consumers
  • Improved mobile shopping experiences
  • The 24/7 ease of online ordering
  • Improved online security
  • Inconsistent local supply of certain items, attributed to COVID-19
  • Consumer reluctance to enter local stores because of virus risk

Online have retailers responded to these changes by ramping up their order fulfillment capabilities. Online giant Amazon, for instance, has increased its warehouse space more than tenfold from its 2009 capacity. And online home furnishings seller Wayfair now has nearly 20 times the warehouse area it claimed in 2015.

The trend in space expansion is proof of a growth outlook for warehouses and distribution centers across the globe. Clearly, e-commerce is here to stay.

To meet mounting consumer demand, warehouses must find ways to reduce downtime. EAM software platforms allow industry leaders to create efficient preventive maintenance (PM) schedules, monitor equipment and parts inventories, and tie every asset back to business performance.

But before looking at EAM solutions, it's worth spending more time on warehouses themselves, starting with the different types.

Types of warehouses

Acquiring more warehouse space is a big decision. Always take into account the type of warehouse you need and back your decision with business intelligence.

Private warehouse – A company typically uses this type of warehouse to store inventory in bulk to prepare for an influx of orders. Owners of a private warehouse often invest in the facility upfront, gaining complete control over the space.

Public warehouse – Many different companies share space in a public warehouse. Often, a company will use this space to accommodate short-term distribution. For example, storing temporary, overflow items they aren’t able to handle in their own, private facility.

Distribution center – This facility is in the middle of a supply chain, between suppliers and consumers, and offers short-term, temporary storage for products. Goods received at a distribution center are repackaged for delivery before being sent out.

Automated warehouse – An automated warehouse employs robots and other technologies to manage warehouse activities. Operators mostly monitor and maintain, rather than control, the equipment.

Climate-controlled warehouse – The interior of this type of facility is specialized to accommodate product-storage needs. Examples of climate control include below-freezing temperatures for frozen goods, humidity-control for plants, and dirt-free environments for sensitive electronics and machinery.

Warehouses and distribution centers along the supply chain

Different types of facilities play different roles as the supply chain moves from suppliers to consumers.

Mega sheds — These are the largest of the warehouses. Follow the chain, and there’ll be a mega shed where most e-commerce orders originate. These national centers house a large volume of goods and may have up to an enormous 1 million square feet of storage space.

Regional distribution centers — These are also called regional hubs and are smaller than mega sheds. You can find them strategically placed to store items closer to the consumer as a means to reduce delivery times.

Urban distribution centers — These warehouses are smaller than regional distribution centers and are perhaps minutes away from a high concentration of customers. Urban centers are popular due to the fast delivery times. However, it can be a challenge to secure property in densely populated areas.

What do all these warehouses have in common? They all operate with equipment and machines that keep the business running. Assets might include everything from tow motors to handheld scanners. And don’t forget the facility assets, such as heating and cooling systems, office printers and light fixtures inside and out.

Each requires proper asset management to support efficient operations. EAM software platforms provide the central source of information and action plans that keep warehouses and distribution centers on their delivery schedules. The end result is happy customers and more business.

Managing warehouse equipment

Equipment uptime is vital to asset-intensive warehouse operations. But in today’s business environment, it’s all too easy to overlook preventive maintenance. A strategic approach with automatic PM reminders and work order notifications can help. That’s where EAM software shines.

Here are just a few examples of warehouse equipment that EAM software can manage:

  • Forklifts (electric, lithium-ion batteries, hydrogen-fuelled)
  • Personnel lifts (telescoping boom, scissor, mast boom)
  • Automated guided vehicles
  • Pallet jacks
  • Hand trucks
  • Stretch-wrap machines
  • Conveyor systems (flexible, power, gravity)
  • Industrial scales
  • Label-makers

Using centralized asset data collection, EAM software creates and tracks PM work orders automatically for every piece of equipment. Free from error-prone manual processes, maintenance managers can be more efficient, focusing on priorities rather than repetitive tasks. And by adding compliance requirements into the software, such as inspection metrics, managers ensure they’re always ready for audits.

Because EAM software integrates information from across company departments, it combines operational data with asset information to power advanced business intelligence. Supervisors can use these tools and analytics to inform high-level strategies and glean insights into their operations that drive profitability.

Considering the challenges facing warehouses today, it’s worth investing in inventory management software that streamlines operations and provides data that informs big-picture decisions.

Challenges facing warehouses and distribution centers

The heightened workloads at distribution centers and warehouses have pushed them to increase operations while maintaining flexibility. Consider some of the pressures facing modern warehouses.

Budget constraints – Getting more value from storage space and equipment assets isn’t simple, but software solutions can help. EAM software aids uptime by increasing asset availability. It also captures total asset value to provide context on an operation’s overall profitability.

Ensuring stock availability – With the number of small orders growing steadily, warehouses must speed up their picking and packing processes. Using solutions, such as RFID tracking, increases ease and efficiency.

Reducing order errors – Packing the perfect order is a key element of warehouse success. Every order needs to have the right products, in the right quantity and condition, every time. Packing audit programs often help achieve this goal.

Managing more data – Customer data, supply levels, product specifics, and delivery details are all part of warehouse logistics. Asset data must be part of the data portfolio, too. Use your EAM’s custom business intelligence reporting tools to gather exactly the data you need.

Protecting the environment – To improve environmental stewardship, warehouses are undertaking initiatives such as recycling cardboard, reclaiming wooden pallets, and shipping products in reusable containers. Consider all the ways you might be able to reduce, reuse, or recycle, and make them part of your workflows.

Emerging warehouse technology

Warehouses and distribution centers are using technology to meet order fulfillment objectives. From asset management software to robots to automated vehicles, all types of tech tools are being put to work. Consider the following industry trends.

  • EAM software integrates company-wide systems and equipment data. Having a trusted, single source of data makes sharing information across a company quick and easy. Managers gain instant access to key performance indicators like total cost of ownership, which can be compiled automatically into custom reports.
  • The use of artificial intelligence is growing. According to Gartner, “by 2025, the top 10 retailers globally will leverage AI.” From using the cloud for mapping delivery routes to identifying purchasing trends, warehouses are leveraging the benefits of AI.
  • Robots are working alongside humans. Automated guided vehicles (AGVs) reduce the time it takes to transport goods from one end of a warehouse to the other. AGVs typically follow a magnetic strip on the floor, while autonomous mobile robots (AMRs) deliver products to different parts of a warehouse without needing a preset route. Instead, they use internal software to map their path.
  • Warehouses are using radio frequency identification (RFID). On pallets, cartons, and items, RFID tech is giving warehouse managers an edge when it comes to monitoring the supply chain. By scanning an RFID’s unique serial number (often a barcode), workers can update shipment arrival, departure, and placement information in real time.

There’s a new outlook for e-commerce driven by changing consumer trends. From the jaw-dropping size of mega sheds to tiny urban distribution centers, technology is helping pave the way for exceptional warehouse management.

To find out how ManagerPlus Lightning can support your warehouse or distribution business with automatic PM scheduling and business intelligence tools, book your free demo today.