Very few people, if anyone could have imagined today’s world of warehousing prior to the launch of e-commerce. Today’s warehousing industry is wide and wild.
The Bureau of Labor Statistics estimates that there were about eight million people employed in the Warehousing & Storage Industry Group in 2020.
The public storage & warehousing market size in the US is $30.9 billion in 2022. The market has experienced an annualized growth of 5.8% in 2022, after an annualized market growth of 3.3% between 2017 and 2022.
A new JLL report states that demand for warehouse space is skyrocketing, as witnessed by a 22% year-over-year growth. Increased e-commerce operations and the demand for home delivery are driving the need for expanded warehouse space across the United States.
The continuation of the e-commerce market boom is causing distribution centers to be stretched to carry more SKUs. Warehouse space is expensive and therefore construction of a new warehouse is often out of the question. Rents also have continued to rise, and vacancy rates are low.
The largest users of warehousing include:
• Consumer goods and retail.
• Food and beverage.
• Third-party logistics (3PL) companies.
• Wholesale distributors.
• Health and hospital care.
Warehouses are crucial assets for many businesses as long-term storage for surplus goods, which customers and clients do not need immediately. Most companies usually produce goods in anticipation of demand. Adequate storage is needed for their surplus goods until their customers and clients start putting in orders.
The shortage of commercial warehouse and industrial space is also the fallout from a paradigm shift from the “Just-In-Time” delivery model to the “Just-In-Case” delivery model coupled with the pandemic-fueled growth in online shopping.
Future warehouses must be more advanced and efficient to manage the increased demand. This requires the deployment of innovative technology to transform the warehouses to improve productivity, reduce costs and make order fulfillment more efficient.
Industrial warehouse technology has seen exceptional advancements in recent years. Advanced technology has transformed labor-intensive manual tasks such as processing payments, dispatching orders, and updating tracking information into automated actions occurring within seconds.
Maintaining accurate inventory was another challenge for warehouses across all industries in the past. Automation will be seamlessly integrated into all warehouse processes. Today, very high-end futuristic warehouse technology can track inventory and provide up-to-date numbers to business owners and warehouse managers wherever they are located around the world.
Technology will be at the center of the warehouse of the future and warehouse management systems will continue to evolve and become even more efficient than can now be imagined.
Warehouse inventory technology and supply chain automation are expected to grow exponentially in the next five years. Estimates suggest that the $700 billion spent in 2020 on Industrial Internet of Things (IIoT) by growing companies will increase to $1 trillion by 2023.
Artificial intelligence (AI) and machine learning (ML) are changing how the supply chain industry works. They are now optimizing processes beyond what humans can deliver, and at previously unfathomable scales. This means all warehouse duties will be completed more efficiently, freeing time and resources for more specialized tasks.
Leveraging AI is so beneficial because it optimizes capacity planning, improves productivity, and boosts efficiency by helping with higher quality output at a lower cost.
Some of the main benefits of the latest technology used in warehouses, including AI technology, include:
An on-demand warehousing platform enables sellers to store inventory in warehouses offering their extra space. These warehouses of the future are different from traditional warehouse storage and enable new activities in distribution centers.
Sellers can opt for on-demand warehousing to increase their stocks during a specific season where the demand is higher than usual. AI facilitates these processes and makes it possible for modern warehouse management to improve profits and turnover rates.
On-demand warehousing is beneficial to warehouse owners and renters alike. Renters are free to access warehouse space without the need to sign long-term leases, and they can boost their inventory and inventory management on an as-needed basis. Warehouse operators simultaneously can tap into a previously untouched clientele and will not have to worry about empty spaces in their facilities.
AI provides accurate numbers regarding inventory levels, and all its related variables in an instant. It also can calculate demand forecasting and planning with the basis of calculating data from previous stock inflow and outflow. Real-time stock updates are available, along with storage optimization recommendations with the help of AI integration.
AI and machine learning help improve efficiency by reducing the costs and resources required in processing orders and running a functional warehouse facility. This is achieved by reducing the amount of time and effort spent to manually input, update, and check data while providing a smooth and seamless experience. In the span of minutes, AI and ML can gather data from multiple sources and offer indispensable recommendations.
Prompt and punctual processing
AI is extremely prompt and seamlessly smooth from accepting orders and processing payments to updating packing and dispatching information, which ensures faster and punctual deliveries to customers and retailers.
Smoother, cheaper operations
AI warehouse operations can function day and night, ensuring that all warehousing processes are taken care of, such as customer service and order tracking. This reduces the amount of work required of employees, thus improving productivity while lowering costs. Minimal chances of errors also are achievable because AI systems perform quality checks at every stage of the process. The quality of work is elevated, thus enhancing accuracy and precision in managing all the important details.
The warehouse of the future is already here. The future of warehousing is bright, and momentous changes are happening in the industry. Technology continues to improve supply chain and logistics. Retailers and sellers can boost their competitive advantage by future-proofing warehouses with the help of modern technology and the latest innovations.
“Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.” William Pollard, American physicist and Episcopal priest.
-Glenn Ebersole, Director of Business Development