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What Role Will Technology Play in the Future of Logistics?

by | IntelliTrans | Oct 14, 2021 | Blog News

In its Logistics 2030: Navigating a Disruptive Decade report, Auburn University shows how organizations can use technology to effectively tackle the challenges and unique disruptions that will occur over the next decade.

Over the last decade, warehousing and distribution (W&D) has played an increasingly important role in logistics. No longer relegated to the role of being a physical space used to store goods, these crucial logistics hubs have become more agile, flexible and value driven. 

In its Logistics 2030: Navigating a Disruptive Decade (L-2030) report, Auburn University—working with the Council of Supply Chain Management Professionals (CSCMP) and the National Strategic Shippers Council—writes about how companies are now prioritizing warehouse and distribution to reflect the current market realities while also leveraging new opportunities. 

Key topics addressed in the report include: 

  • Warehousing Tactics: How can strategically-aligned capabilities balance service and cost control demand? 
  • Warehousing Talent: How will companies acquire and retain W&D talent for associate and manager roles? 
  • Distribution Technology: Which game-changing tools will drive W&D planning and operational excellence? 

Tech Enables Execution Excellence

Specific to technology, Auburn says over 70% of the company’s it surveyed have a “strong vision” for how emerging technologies will benefit their W&D operations, where technology’s value proposition is largely focused on execution excellence. 

“Faster processing of orders is viewed as a priority by L-2030 participants, along with greater accuracy, and greater operational cost control,” the report states, noting that one executive write-in answer sums this up well: “In our DCs, we’re investing in tools to unload and load faster to make fulfillment faster. We want to do more with less people.”  

Other key report findings include: 

  • 93% of respondents say that emerging technology deployment will have a positive impact on their W&D service quality. 
  • 45% say they have adequate funding to support W&D technology initiatives. 
  • 79% say that their W&D technology allows them to scale their operations with changing market needs.  
  • Some of the primary barriers to W&D tech adoption right now include securing company funding for investment (according to 69% of companies); achieving promised technology benefits (58%); and selecting effective tech providers (57%).

Major Uptick in Tech Usage

The survey also suggests a “major uptick” in W&D technology usage in the near future.  Warehouse management systems (WMS) enjoy the widest adoption among respondents and will continue to be an important tool in the future, Auburn points out in the report, with adoption of order management systems (OMS), warehouse execution systems (WES) and warehouse control systems (WCS) all increasing over the next nine years: 

  • Order management systems
    29% adoption now, growing to 71% by 2030 
  • Warehouse management systems
    41% now, 67% in 2030 
  • Warehouse execution systems
    16% now, 61% in 2030 
  • Warehouse control systems
    17% now, 32% by 2030 

“Typical use cases for WMS, OMS, WES, and related tools like warehouse control systems are focused on improving daily receiving, replenishment, and order picking,” the report notes. “However, their uses cases will expand over the next decade as companies adopt more W&D automation in their quest to improve service quality, labor productivity, cost efficiency and order visibility.” 

Within the nation’s warehouses and distribution centers (DCs), Auburn also expects use of predictive analytics, goods-to-person picking, autonomous mobile robots, automated storage and retrieval systems (AS/RS), and order-picking robots to increase by 2030. “We spend time on the analytics side,” one VP of SCM pointed out in the survey, “to help us find opportunities in pick path optimization, SKU management inside the DC, and in the packing areas to gain operational efficiency and control transportation costs.” 

Changing the Equation

Auburn says that the current labor shortages and rising costs of doing business—coupled with the need for faster execution speed—are all changing the equation in terms of the role technology will play in future W&D operations. “With the shift towards decentralized networks with a greater number of smaller facilities, infusion and adoption of technology is expected to accelerate in the coming years,” it points out. 

“The complexity of these expanded, rapid fulfillment operations will require technology to be the central element of W&D strategy,” Auburn adds, “especially in cases where technology can supplement or replace labor, boost operational productivity, and create flexible capacity.” 

To companies that want to effectively leverage technology in their future logistics operations, the university says that a good starting point is to identify where new tools will make an immediate operational impact (i.e., improving the accuracy of order fulfillment or streamlining order processing time). 

“As machine learning, predictive analytics, and other technologies mature, seek out opportunities to improve planning and to automate tasks, thus enabling your W&D team to deliver perfect orders,” it concludes. “The year 2030 seems far off but significant changes that affect W&D are already occurring. Your operations must be ready for these new challenges and unique disruptions that will occur over the next decade.”


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