Today’s solutions for todays logistics and warehouses: part I
Aside from global trends, drivers and disruptors, each industry tackles its own set of challenges. Some of these challenges are universal. Others are more unique for certain industries, or have recently risen front and center. Let’s take a closer look at the 4 focal challenges for logistics, logistics departments and warehousing today.
1. Unwavering classic: improving productivity
We simply can’t not address the well-worn but unrelenting drive to do more, better and/or faster.
Logistics, whether as an industry by itself or as a larger logistics department within another industry, involves a role of go-between. This comes with built-in extra pressure. So it’s no surprise that this sector has overall shown strong adaptability. Which has contributed to them often being early adopters of new technologies.
And while Goldman Sachs’ analysts predict this sector as one of the least affected by further AI task automation, these and other new technologies still warrant exploration for their productivity-enhancing potential.
2. Sustainability: from buzz to policy
Sustainability, lowering carbon- and H2O-footprints, net zero, … these terms have evolved from largely being PR-buzzwords to internationally regulated, legislated and penalized considerations. So by now, just like any other industry, logistics (or logistics departments) have strategies in place for sustainability targets like recycling and the reduction of Scope 1 emissions. With the focus moving towards Scope 2, the challenges for logistics also move to be more industry specific.
Take for example material handling equipment such as forklifts. While the transformation from fuel-based to (predominantly) electrical fleets is definitely a plus for the environment, Scope 2-policies still need to ensure that this electricity is either from renewable sources or offset with Guarantees of Origin or Renewable Energy Certificates.
Simultaneously and supported by technological innovations, logistic companies are exploring methods to ever further reduce their energy consumptions. Today Eco-driving may be added to that list of buzzwords turned enforced policy.
3. Lowering OpEx, cutting costs
Preferably in tandem with improving productivity, lowering operational expenditure is mainly motivated by the bottom line. Countering rising labor costs with (further) automation is an option examined by many in the logistics industry, but as the next point will show, only goes so far. Also on the wish list: a central platform that integrates multiple operational systems (and possibly services).
AI-optimized routes, schedules and workflows are rapidly becoming standard fixtures in tackling OpEx challenges for logistics. Same goes for yet another next phase in digitalization. On a more basic level the drive for sustainability can lower OpEx as an soon-to-be-standard side effect. Again Eco-driving comes to mind, as does smart material/vehicle analytics.
4. Finding and retaining a strong workforce
Automation may have been mentioned several times. This doesn’t change the fact that most recruiters in logistics struggle with finding the right workforce. And are more than ever invested in retaining those employees. Also: even if a business can offer competitive wages, this no longer guaranties the recruitment pool, work ethic and loyalty it once did.
Today’s workers have expectations that go beyond a satisfactory paycheck. They desire a degree of flexibility, autonomy and support. A company showing a strong safety culture and a low accident rate has become more important. Just as the prospect of a better work-life balance and working for an employer with a good reputation in sustainability.
And, maybe somewhat unexpectedly: workers also show a significant willingness to embrace new technologies and automation. 80% of warehouse workers expressed that having to walk fewer miles thanks to robot assistance, makes their job more pleasant, even if it meant they had to handle more items.
Interested in the new, technology-driven ways logistics and warehouses are successfully lowering OpEx? Check out part II.
