Endava: How to digitize warehouses and distribution centers

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This series of transportation and logistics (T&L) insights is based on research by Levvel, who joined the Endava family in 2021. The team surveyed more than 500 U.S.-based companies that purchase transport and logistics internally and externally to get their perspective on their challenges, needs and use of digital solutions.

While companies often think of technological innovation as things like high-end robotics, artificial intelligence, and fully autonomous vehicles, there are many parts of the supply chain that can be modernized without requiring effort or effort. significant costs, while providing a competitive advantage. are looking for. In this series, we’ll showcase current industry challenges and how digital technology can help reduce friction, improve efficiency, and provide a better experience for businesses and their customers.

THE CURRENT STATE OF TECHNOLOGY IN WAREHOUSES AND DISTRIBUTION CENTERS

The supply chain is under unprecedented pressure and the inability to meet growing customer demands is straining operations from start to finish. This is partly because the T&L industry still relies heavily on manual labor as well as older methods of freight management, such as paper and fax.

According to our survey, over 40% of businesses are held back by a lack of automation. And while there are concerns about the cost of upgrading facilities, the return on investment (ROI) is immense. Digital automation is a good example of a critical upgrade. It relies on non-physical technologies, such as data and software to manage facilities, which helps reduce costly human errors and increase transparency.

Not all warehouses and distribution centers can use the same automation strategies, but generally starting with something is better than nothing.

Of the 560 companies surveyed, 75% had already implemented or were planning to implement some sort of automation initiative. Yet only 14% responded that more than half of their warehouse capacity was automated, which still leaves plenty of room for error.

The piecemeal approach that many facilities take deserves closer examination. For example, 60% of companies had control towers in place to oversee operations within the supply chain. And yet, 80% still relied on legacy tools like email, phone calls, and spreadsheets. If companies don’t fully embrace their automation initiatives, they won’t be able to realize the full potential to increase speed and reduce error rates.

WHY WAREHOUSES ARE NOT AUTOMATING QUICKLY ENOUGH

An important factor for companies in the early stages of automation is the cost – or perceived cost – of the new technology. Stakeholders tend to assume that updating warehouses and distribution centers involves expensive physical approaches, such as robotics. In fact, there are dozens of other options out there, and most of them are affordable and offer a decent return on investment.

Even simple digitization strategies, such as cameras that record cargo unloading, can be enough to increase efficiency, transparency, and compliance, as well as reduce the risk of human error.

Implementing digital-first approaches may make more sense for most businesses, and the cost of tools like inventory tracking and efficiency software is less disruptive to bottom line results. Physical approaches, such as robots and autonomous vehicle delivery, can come later and often require digital tools anyway.

It is true that most technologies require a company to hire and retain a skilled workforce. However, digitization strategies that help increase efficiency make it easier for employees to work in the long run.

AUTOMATION IMPLEMENTATION STRATEGIES FOR THE T&L INDUSTRY

There is no single strategy that will apply to every facility when it comes to choosing and implementing digital automation tools. Each organization will need to consider its own needs and find places where it can benefit from digitization, whether that means automating documents, such as bills of lading, or communicating more effectively with drivers when they come to unload the cargo.

The good news is that facilities have already started implementing new automation strategies. We found that cargo tracking innovations are the most common, including mobile scanning devices, digital barcodes, radio frequency identification (RFID), and GPS tracking. Experiencing the benefits and return on investment of these tools can encourage companies to take the next steps towards even more specialized software approaches to facilitate the work of everyone throughout the supply chain.

Read our other Transportation & Logistics Insights articles to learn more about how technology can help alleviate industry challenges.

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