Manhattan Associates Inc. has published findings from its 2024 State of Warehouse Operations research. The research was conducted by Vanson Bourne. It was based on a significant survey of 2,000 supply chain professionals in Spring 2024 from twelve countries. The respondents came from Australia, Belgium, Brazil, France, Germany, Italy, the Netherlands, Norway, Mexico, Spain, Sweden, and the UK, with the obvious omission of the US.
The report consists of twenty pages and is divided into four sections with a summary and conclusion. The first section looks at the current state of warehouse operations. Section two identified the challenges that warehouse operations face today. Whilst the third section studied the challenges around human resources in more depth. The final section looks to the future with a brief look at the priorities organisations have.
In recent years, warehouse operations have faced numerous technological advances. They have also faced macroeconomic and geopolitical events that have thrown up unique challenges and opportunities. The emergence of AI, additional consumer channels, and supply chain disruption led to raw material shortages. Also, human resource issues such as recruitment and retention.
Henri Seroux, Senior Vice President of EMEA at Manhattan Associates, commented, “Warehouses are at the heart of a unified supply chain and centre of the fulfilment universe. Tackling the challenges highlighted in the report are key to the long-term competitiveness and success of companies. The findings underline the importance of looking forward and continuing to incorporate new technologies like microservices and Generative AI, future-proofing supply chains and allowing them to become revenue and customer service drivers in their own right.
“Ultimately, a more unified supply chain strategy creates efficiency, and that in turn creates sustainability, both in terms of economics and environment. And that can only be a good thing for P&Ls as well as the planet.”
The current state of Warehouse operations
Overall, 55% of respondents believe that their current warehouse operations could improve. The UK (67%) is the most critical, while Spain (41%) is the least. The report also looked at the adoption of warehouse practices. Such as B2B and B2C order fulfilment (41%), the most common. However, only 53% of decision-makers believe that they have visibility of issues. And only 33% feel that they understand the challenges.
What was a surprise was the amount of warehouse and related technology in use. Between 39 and 43% had adopted the technologies they were asked about. The report did not dive deeper into the data, though, to identify whether there were commonalities between usage or what percentage. Presumably less than 61%, used no technology. The technologies looked at included:
- Warehouse management system (WMS)
- Warehouse control system (WCS)
- Transportation management system (TMS)
- Labour management system (LMS)
- Yard management system (YMS)
- Warehouse execution system (WES)
- Dimensioning parcel systems
- Voice picking system
- IoT-based sensors for inventory management
- Automated equipment and Robotics/Automated Guided Vehicles (AGVs)
Around 4 in 10 respondents are looking to invest in these technologies. The variances between countries and industries were called out, though. Only 28% of Australian respondents have adopted RFID technology/IoT-based sensors. With only 46% of respondents in Pharmaceutical have adopted yard management systems.
In terms of replacing systems, the logistics sector is planning to invest the most in labour management (93%), Dimensioning Parcel systems (90%) and voice picking Systems(90%).
Key challenges in warehouse operations today
The survey identified a broad range of challenges warehouse operations face. The top four were:
- IT hardware/software that is now end of life/no longer meets our needs (28%)
- Making changes to our warehouse operations because of their complexity (27%)
- Struggling to manage orders from different channels (26%)
- Not environmentally sustainable/struggle to meet regulations (26%)
While 97% agree that modernisation will answer some of these challenges the big question is on what. The authors took a closer look at Yard congestion. With 38% facing significant congestion and 22% finding it difficult to locate goods. 81% are planning to replace their yard management systems and 76% their TMS systems within a year. The issue is exacerbated by 73% seeing increase in the volume of goods over the last 12 months.
Staffing is also a key issue for many, both internally and externally; notable issues include:
- Struggle to recruit, train, and manage more seasonal/short-term workers (41%)
- Struggling to improve/ensure staff productivity (40%)
- Getting the support we need from our IT vendors (36%)
Lacking a qualitative element, the report does not delve much deeper into the issues. However, the final section does look in depth at the human element of the challenges.
The human element
The report examines what employees, both decision-makers and non-decision-makers, perceive the benefits offered within warehouse and labour management systems.
38% of Decision makers noted that systems use gamification to allow us to motivate staff. 35% of non-decision makers noted that their systems “allow me to earn badges/awards and/or see how I am performing vs my colleagues.”
It is noteworthy that both sets of people are aligned in their thinking on the top issue, which is rare. Other key highlights from this section include:
- There is a need to enhance training through mentoring and eLearning platforms
- Employees should be able to submit feedback to management
Enterprise Times: What does this mean
Times are challenging for Warehouse operations. But there seems to be some optimism about investing in modernising the systems in place. However, the challenges are likely to remain and increase as volumes of goods and channels grow even more.
Looking forward, many are transforming operations to address challenges. Including meeting demands from customers (36%), taking advantage of new revenue or sales opportunities (35%) and warehouse staff retention (31%).
Staff are also excited about the possibilities of low-code, generative AI (75%) and robotics (72%) to improve their job roles.
The report has some interesting findings. One suspects there is much more to come from the drill downs by industry and nation. However, without a qualitative element to the survey, the analysis is left to the conclusion with notes on the positive impact that transformation will bring, both for operations and staff.
The authors had a wealth of material available and kept the report down to a readable 20 pages. A deeper analysis could have ended up with a significantly larger piece of work. However, a few data visualisations of answers around nationality and industries might have given deeper insights. Rather than the sporadic data points that were pulled out.
