Top challenges in warehouse and distribution centres
This Transportation & Logistics (T&L) Insights series is based on research by Levvel, who joined the Endava family in 2021. The team surveyed over 500 US-based companies who procure transportation and logistics services internally and externally to get their views on their challenges, needs and use of digital technology solutions.
Warehouses and distribution centres (DCs) are facing unprecedented challenges as a result of the pandemic. Meanwhile, consumer demand is growing thanks to e-commerce, leading to backlogs and delays that affect a company’s bottom line. But these challenges can be mitigated by using modern technology, and these initiatives don’t have to be very expensive or extensive to give a company the upper hand.
According to our survey, the top challenges which warehousing and distribution centres have to hurdle involve:
- Finding and retaining talent
- Demand forecasting
- Inventory management
- Fixed overhead costs
- Operator utilisation
- Item damaging
The biggest challenge involves human capital and retaining staff in an industry where lateral moves are common as workers search for better conditions. As e-commerce grows and more efficiency is expected along the supply chain, it can be difficult to provide a good environment for employees without help from automation. Without automation, the need for human labour only grows.
The second biggest challenge involves inventory; that is, when it’s received, how it’s stored and how long it takes to ship it back out. When inventory sits in a warehouse too long, it loses value and has a higher risk of becoming spoiled or damaged. Equally, if there is a low turnover rate in a warehouse or DC, inventory management becomes much harder, especially if there’s no digital system in place to track what’s being stored, where it’s located and when it arrived.
Our research found that the challenges faced by both management and employees decreased as automation increased. For example, workers become more productive and inventory management more efficient.
So, what’s holding companies back from implementing automation solutions? Find out more from Endava by clicking the link below.