In this 5th in a series of six consecutive posts we detail key findings from Aberdeen Research’s surveys of over 130 firms that employ warehousing. What are their challenges, what actions are they taking to improve, where are they investing, and ultimately, what does it take to be nearly “perfect” when it comes to warehouse order fulfillment? Read on…
Companies need to be prudent enough to select the right technology investments that maximize their ROI bang for the buck. The challenge lies in aligning the right technology or solution to each operations-specific need, then comparing cost/benefits.
Aberdeen Research took a look at where over 130 survey respondents said they were planning to invest their warehouse management technology dollars. Here’s what they found…
- 94% of all firms said they would invest in “event driven processing” (real-time interactive activities in picking and replenishment). This includes the broadest range of options, everything from auto-ID to Warehouse Management Systems to Labor Management Systems. It also integrates Material Handling, Radio Frequency devices, even voice. In short, this was the catch-all category. Respondents were saying, in other words, Yes, we’re going to invest in electronic technology to better pick, put-away, track and expedite our order fulfillment. Again, nearly all respondents said they were planning to do this.
- 88% narrowed their selection down simply to selecting a WMS
- 83% indicated that auto-ID (mostly, bar-coding) was their highest investment priority.
- All the other choices (Materials Handling; Labor Management Systems; Voice; and 3rd Party Logistics) registered under 62% of respondents reporting they would invest in these areas.
In effect, companies in surprisingly large numbers are saying that they are investing in warehousing technology, and the associated RF hardware — in huge numbers.
These involve significant capital outlays, but because the benefits in labor productivity and resource efficiency are so high, significant ROI is produced. In fact, over one-third of respondents said “it can self-fund” within one year. Overall there is an average ROI expectation of merely 18 months.
Moreover, statistics showed that future investments in WMS technology overall are predicted to increase by 35% in 2012. Companies today are upgrading in overwhelming numbers to newer equipment. Companies are extending WMS into advanced picking and replenishment methods, and generally upping their game in terms of replenishment and fulfillment automation.
The results are in, and the investments in warehouse automation are growing dramatically.
In our next and final post on this topic, we’ll take a look at “required actions.” Whether you’re among the best-in-class, or worst, we’ll look at the actions you need to take to improve your warehouse performance now.