2021 Distribution Companies Adopt Automation

While e-commerce and omnichannel has steadily increased across every industry in the past several years, this digital transformation was only accelerated by the pandemic of 2020. Traditionally, B2B distribution companies have been slower to adopt omnichannel selling methods since customer contracts and relationships were often maintained for years. However, distribution companies have had to shift to digital purchasing options for B2B channels, as well as adopt more direct-to-consumer (D2C) models with retail shutdowns. This trend is likely to stay even with the economy re-opening, and consumers now expect omnichannel purchase options that allow them the flexibility to purchase online or in person.  Modern distribution companies adopt automation in the warehouse to meet these rising consumer expectations.

Robots Increase Efficiency in Warehouse Operations

Robots are a rapidly growing submarket in the warehouse automation space. It is anticipated that by 2025 there will be 50,000 robotic warehouses, with the installation of over 4 million robots globally (3). Robots are used to assist with operations like transportation, fulfillment, picking, packing, batching, inspection, and security. Commonly used robots include AGVs, AMRs, drones, cobots, and more. While some small and midsize distribution companies may hesitate to iinvest large up-front costs in robotics, ROI for technology is high. Warehouse automation can increase productivity and efficiency by 25-50% (3), and that type of speed is essential in today’s marketplace.

Automated Inventory Management Expedites Shipping

In today’s Amazon Prime era, delivery speed is paramount for distribution companies. 66% of customers choose e-vendors based on delivery options, 63% say delivery speed is a vital factor in the selection process and 77% are willing to pay for faster delivery (2). That means two-thirds of e-commerce consumers rate delivery speed as the most important factor when making a purchase! Nearly 60% of retailers and consumer goods companies now plan to increase their investment in multiple facilities that can respond to online orders (1). However, small and midsize distribution companies may not have the option to expand real-estate. Improving inventory management and enhancing warehouse productivity through automation is even more important. 34% of businesses have shipped an order late because they inadvertently sold a product that was not in stock (4). With real-time updates to inventory levels and batch locations, you can fill orders faster and avoid stockouts.

IoT Integrates Your Warehouse Processes

Distribution companies that adopt automation technologies need a system to monitor and tie everything together. The IoT allows distribution companies to connect, monitor and synchronize your warehouse robotics, pallets, equipment, inventory and even workers in real time, enabling different devices and systems to scan, store, share and retrieve data. Not only do you have full visibility into all your distribution operations, but you also can track status and performance of all your connected devices. Technology that allows for real-time updates and on-demand receiving and dispatching from your handheld device also allows you to plan efficiently. 72% of logistics providers will increase their warehousing IoT investment in the next few years (3).

Conclusion

There are clear benefits for small and midsize distribution companies to adopt automation in the warehouse. Although investment in technology may seem costly upfront, the increase in productivity and decrease in waste in terms of time and resources, results in high ROI. Integrated software that allows you to track all of your warehouse operations, including processes that are automated by robots or IOT devices, is essential to ensure you maximize your warehouse automation investment.

Read the whitepaper on how modern manufacturers and distributors increase warehouse automation.

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Sources:

1. https://www.bain.com/about/media-center/press-releases/2020/balancing_resilience_speed_and_efficiency_90_percent_of_retail_consumer_goods_companies_plan_to_modify_their_supply_chain_networks_in_response_to_fallout_from_covid_19/
2. https://financesonline.com/supply-chain-trends/
3. https://www.selecthub.com/warehouse-management/warehouse-automation-trends/
4. https://www.conveyco.com/inventory-statistics/