Supply Chain Technology Inside the Modern Warehouse: Highlights from the DC Metrics Study
The 15th Annual DC Metrics study was unveiled this spring, and industry concerns about capacity, accuracy, throughput, and labor costs once again highlighted the role that advanced supply chain technology can play in the modern warehouse.
Findings from the annual study conducted among DC Velocity readers and members of the Warehousing Education and Research Council (WERC) provide insight into what values and metrics are moving to the forefront, what has changed over time, and how supply chain technology is ushering in the new world of modern warehousing.
Growth of E-commerce Drives Direct-to-Consumer Shipping
As a greater percentage of businesses ship directly to customers, the need to pick at the item or sub-case level vs. case, partial pallet, or pallet level is increasing. In this year’s data, broken-case picking was cited as the most common scenario (37.2%) when respondents were asked how orders were picked in their facilities.
That type of picking requires technology in order to ensure efficiency and accuracy, and there is still room for improvement. Cart-based picking has grown by ten percentage points over the past decade, while voice-directed picking has grown from 7% penetration in 2008 to 25.8% today. Surprisingly, RF scanners/barcode scanning only stands at 76% in 2018, far from saturation level. For DCs that want to stay competitive in the e-commerce space, these supply chain technology investments will be critical.
Classic Metrics Slip in Rankings
The growth of e-commerce is also affecting which metrics warehouse operators consider the most important. Measuring on-time shipments is crucial for warehouse efficiency, but for the second straight year, this metric fell in rankings, coming in fifth in importance for the 2018 study. (It ranked first in 2016.)
Average warehouse capacity used ranked as the top metric this year and peak warehouse capacity used came in at #3, likely because of the astounding influx of orders is pushing modern warehousing to limits. How facilities use their space is critical.
Order picking accuracy was the second-most commonly used metric this year. Warehouses place increasing importance on meeting consumer expectations for orders delivered correctly the first time, again driven by customer experiences with big e-commerce sites like Amazon.
With these priorities in mind, device manufacturers upgrading supply chain technology to deliver greater efficiency and accuracy. The Honeywell 8680i Ring Scanner, for example, can enhance accuracy and productivity by enabling faster picking/scanning operations.
Increasing Importance On Labor-Focused Metrics
The supply chain faces a two-pronged labor challenge. There is an overall shortage of skilled workers in many regions, and experienced staff are retiring at an increasing rate – and taking their knowledge with them. According to the DC Metrics study, warehouses and distribution centers are hyper focused on the workforce and measuring:
- Contract employees to total work force
- Overtime to total hours
- Part-time work force to total work force
- Cross-trained percentage
- Annual work-force turnover
These metrics can provide crucial insight into a rapidly changing workforce and how to relieve the strain (and cost) of handling the workload for both inbound and outbound processes.
With a changing workforce in mind, mobile devices are also evolving. These new devices are easier to use, can reduce the training required for new employees, and help staff quickly access the data they need to do their jobs. The Honeywell CT60, for example, has a handle/pistol grip accessory for more scan-intensive applications, while the Honeywell CN80 provides a touchscreen display and familiar Android interface.
Supply Chain Technology Propels the World of Modern Warehousing
Over the past 10 years, warehouses and distribution centers have adopted many technologies and tools. However, even the most widely used tools, like warehouse management systems (WMS) and RF scanners have not penetrated every DC. In fact, just 65% of respondents are using a WMS, and even fewer (30.2%) are using a transportation management system.
Digital supply chain technologies will help bring productivity, efficiency, and profitability to businesses, but getting upper management to make those investments will require warehouse managers to make a convincing case for their return on investment (ROI). The experts at Miles Data can help warehouses and distribution centers implement the right technology to address challenges related to a shrinking workforce and increased consumer demand, while generating a tangible ROI.
Don’t fall behind your competition by working with outdated, fragmented technology. Miles Data not only provides hardware and software solutions for your challenges, but implementation strategies for improvement. Through careful examination and consideration of your workflows and functions we help you find the best solution for both today and in the future.