How Automation is Changing the Face of Warehousing Sector

Up until a couple of decades ago, the word warehousing generated images of dimly lit godowns where several piles of cardboard boxes were stacked together. The technological wave was yet to sweep through businesses and nearly every process was done manually. This required a tremendous amount of manpower and resources to ensure the right orders were picked and deliveries were made to the right location. However, in the absence of tracking technology, instances of additional costs due to return orders and non-deliveries were rampant.

It was then, that technological adoption changed the face of the entire sector. As new trends emerged in the space and the market began to become more competitive, the thumb rule became simple: adapt to the trends or become redundant. Today, the segment has gone from being largely unorganized and unstructured to professionally managed with streamlined facilities that offer technology-driven all-encompassing services.

With modern supply chain companies offering integrated services, warehouses have evolved to add value to the larger logistics value chain, as opposed to their conventional role of being just storage facilities. Right from inventory storage and management to order picking, assembly, and packaging, a variety of functions are being performed within warehouses fueled by modern industrial growth and technological incorporation.

Automation: A key driver of growth

Technological proliferation in the logistics sector has been one of the fundamental reasons for increased efficiency in warehouses today. With companies digitizing operations, automated warehouses have revolutionized the segment. Features such as predictive analysis, automated inventory management and order processing, etc., have ensured that logistics players can optimize costs and avoid investing heavily in manpower for mundane tasks. Rather, thanks to automation, companies have been able to dedicate their manpower to more important tasks that require the human element.

Although automation isn’t an entirely new concept in the warehousing space and has been increasingly adopted in recent years, the past year saw accelerated digitization of warehouse management owing to the pandemic forcing the world to minimize human contact. Digitizing warehouse operations have proved to be a key growth driver for logistics platforms. In fact, on the back of its tech-led evolution, the sector is poised to cross USD 512 million by 2026 with a CAGR of 26.4% between 2021 and 2026.

 Strategic and complex warehousing

The days when warehousing was a small part of the vast supply chain network in the logistics industry are long gone. Today, not only have warehousing processes becoming more simplified, warehousing has become an integral part of the logistics and supply chain industries and has evolved to incorporate new types such as flexible warehousing.  New-age logistics platforms allow businesses to opt for flexible warehousing wherein they use the warehousing services as per their requirements and the seasonal demand they witness and pay only for their usage. This is especially beneficial to small and medium businesses that can optimize warehousing costs by opting for flexible warehousing services that enable cost optimization whilst tackling market fluctuations efficiently.

Warehousing is also no longer limited to large businesses that have sufficient capital. With integrated logistics platforms, warehousing has become more accessible for businesses of all sizes without them needing to invest in each logistics function separately.

The future is streamlined and tech-driven

Warehousing has now become more strategic, tech-driven, and streamlined, having gone from merely being a side service to a main segment in the logistics sphere. Today, logistics platforms are offering integrated services powered by cutting-edge technologies such as AI, ML, Data Analytics, and IoT, to facilitate automated warehouse management with robots that provide crucial links in the supply chain, real-time updates, RFID, etc., allowing the human resources to focus on the more important tasks. In fact, some companies are even testing drones and Automated Guided Vehicles (AGV) in warehousing and supply chain management.

With a quantum leap in investments and technological adoption alongside the rapidly changing supply chain and logistics segments, warehousing in the logistics sector will continue to see robust growth, becoming one of the industry’s most lucrative elements, taking India a step further to achieving its dream of becoming a $5 trillion economy.

(The author is Director at Varuna Group, one of India’s leading logistics and warehousing providers and the views expressed in this article are his own)