Logistics, warehousing industries embracing digital technologies for greater competitiveness

WAREHOUSING, distribution, and logistics operations in the Philippines and the rest of Southeast Asia will be harnessing digital technology in response to the rising demands of the market.

In a recent interview with BUSINESSMIRROR, Zebra Technologies Asia Pacific vertical solutions lead Aik Jin Tan said Philippine logistics firms are anticipating exponential growth in the next five years. “The Philippine companies need digital solutions to cope with the huge demand from the market,” Tan said.

Citing a study commissioned by Zebra, Tan said information technology and operations decision-makers from logistics, retail, post and parcel delivery, and wholesale distribution industries realized they have to modernize warehouses, distribution centers and fulfillment centers.

“Warehousing, distribution and fulfillment operations are undergoing a modern-day makeover as they transform to meet the growing needs of the world’s on-demand economy. Warehouse leaders today are turning to technology to address critical business challenges caused by this global phenomenon by adopting advanced technology and empowering their workers with a performance edge,” Tan explained.

“Expanding space, implementing new processes and enhancing workflows are only part of the equation. By 2024, warehouse leaders will be shifting their focus to the integration of more holistic solutions to build data-powered environments that balance labor and automation in the warehouse, ultimately empowering frontline workers with a performance edge to lead the way,” Tan added.

In the study, 70 percent of respondents believe human interaction is part of their optimal balance in warehousing, with 43 percent citing partial automation (some human involvement) and 27 percent citing augmentation (equipping workers with devices) as their preference.

Tan said business leaders are developing forward-thinking fulfillment strategies that will enable their organization to keep up with the growth of the on-demand economy. Both automation and worker augmentation solutions will be a key focus for decisionmakers’ plans over the next five years.

Moreover, the research said more than three-quarters (81 percent) of respondents agree that augmenting workers with technology is the best way to introduce automation in the warehouse, but only 34 percent have a clear understanding of where to start automating. Currently, up to 88 percent of decision-makers are either in the process of, or are planning to expand the size of their warehouses by 2024. Meanwhile, up to 85 percent anticipate an increase in the number of warehouses during this time frame.

Tan said almost half (48 percent) of surveyed respondents cited faster delivery to end customers as the primary factor driving their warehouse growth plans.

As warehouses expand, the study said there will be an increase in the volume of stock keeping units and the speed by which items need to be shipped.

Decision-makers will seek increased visibility and productivity by implementing more robust returns management operations (85 percent), task interleaving (85 percent), value-added services (84 percent) and third-party logistics (88 percent).

Tracy Yeo, Zebra country head for the Philippines, said the “I want it now mentality” of the new generation of consumers has led to drastic changes and behavior in the supply chain which created an impact among manufacturers, retailers and the warehousing operations that serve their needs. Furthermore, Yeo said their study showed that 49 percent of the surveyed decision-makers reported an increase in consumer demand as a top driver of growth, with almost 40 percent of those surveyed stating that shorter order lead times are fueling their expansion plans and causing them to rethink their strategies.

The 2024 Warehousing Vision Study by Qualtrics interviewed 1,403 (of which 352 were from Apac) IT and operational decision-makers in the manufacturing, transportation and logistics, retail, post and parcel delivery, and wholesale distribution markets in North America, Latin America, Asia-Pacific and Europe.