Tomorrow’s Warehouse: What’s Shaping the Future?

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BoxLogic Director, Matthew Hopkins, assesses the factors that will shape the warehouse of the future as BoxLogic gear up to exhibit at the Tomorrow’s Warehouse event in Coventry on 9th June 2022.

 

Change is all around us. Some changes are predictable, others are not. Some change are slow and evolve whilst others are rapid and feel like a revolution. Some changes are temporary, but others are permanent. Tomorrow’s warehouse is being shaped by a variety of changes that are in progress and will undoubtedly also be influenced by other factors that we can’t foresee at this moment.

The rise of ecommerce has been underway for 15 years already but has had a significant impact. The ONS shows that internet sales accounted for only 3.7% of the total in 2007 and had reached 19.2% by 2019, an average growth rate of 17% per year. This had a dramatic impact on retailers – particularly those with a history on the high street as they struggled to adapt with expensive store estates. Some have thrived in the new environment but others didn’t survive. Those that survived were able to adapt their warehouses to deal with a much more fragmented order profile. Then Covid-19 happened with many stores closing to contain the spread of the virus, resulting in a surge in internet sales of 46% growth in just 2020 to 28.1% of the total.

Source ONS

With further growth of internet sales in 2021 (30.7% of the total), its reasonable to assume that for many, this change of consumer behaviour has held firm. The warehouse of the future must adapt to a much smaller average order size as ecommerce grows and consumer behaviours evolve. Customers are also making their presence felt in other ways with greater desires for personalisation and other value-added services. For many, this will entail warehouses adding production cells to process these requirements. Increasing demand for rapid fulfilment is also driving warehouses closer to major population centres.

A woman with medium blond hair opens the door to a grocery delivery man in an orange polo shirt holding a green shopping bag filled with groceries

Labour shortages in the UK have driven up pay rates as businesses compete to attract talent. Other companies are building better welfare facilities like gyms, communal areas, locker rooms and high-quality cafeterias. The labour market has propelled more businesses to deploy automation within their warehouses to improve operational resilience and mitigate the increase of costs. Automation has a significant impact on building requirements, including bigger power supplies, higher clear heights, and stronger floors. The impact on the management culture also changes dramatically with a focus on proactively managing workloads to manage volumes against fixed throughput capacities.

The uptake of automation is also being driven through technological advancements in both the types of automation equipment available and the reducing costs from scale and investment in the sector. Autonomous Mobile Robots (AMRs) are just one technology that has rapidly taken off due to its flexibility, scalability and lower costs enabling faster returns on investment. Robotics companies have merged or partnered with warehouse automation providers over the last five years to apply their expertise. This has led to robotic picking in tech leaders but, with further development, will be rolled out more wide and eventually replace more people within the warehouse.

The Sustainability Challenge has become a key consideration for many businesses. Building designs are impacted with photo-voltaic panels to harness solar energy, wind turbines, LED lighting, motion sensors, rainwater harvesting systems among the common ways to improve energy self-sufficiency. This self sufficiency is particularly important at a time of significantly rising energy costs. The take-up of electric cars is gaining pace and many newer warehouses offer charging points in their car parks. The electrification of delivery vehicles will require more onsite charging when vehicles are parked up or being loaded. Current research suggests HGVs will skip electric and move straight to hydrogen, which might also require onsite infrastructure to support transport fleets.

Lastly, sustainability practices may lead to businesses creating a circular economy within their brand proposition. Technology and high-end fashion brands are offering repair services to drive sustainability. Performing these types of activities requires high-skilled labour and space within warehouses.

The warehouse of the future will be required to deal with a range of pressures including the growth of ecommerce, changing consumer behaviour, labour shortages or cost increases, technological advancements, and sustainability challenges. The task for logistics leaders will be to ensure their warehouses are in the best possible position to mitigate the known and unknown risks.

If you would like to learn more about this topic, then sign up to attend Tomorrow’s Warehouse in Coventry on 9th June 2022 where a range of industry recognised speakers will discuss the above topics and more.

We look forward to seeing you there!

INSIGHTS