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Warehouse Vision Study
Dynamic Markets Demand
Warehouse Agility
Presenter Name
Date
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Warehouse Vision Study
Dynamic Markets Demand
Warehouse Agility
Partner Logo
3. ZEBRA TECHNOLOGIES
About the Study
Zebra Technologies commissioned a global research study among decision-makers and associates to
analyze the latest trends and technologies transforming warehouse operations. The study includes over
1,500 respondents across organizations within manufacturing, retail, transportation, logistics and wholesale
distribution. Azure Knowledge Corporation administered the online survey in January – February 2022.
Overview
• Disruption as a Catalyst for
Change in Warehousing
• A Global View of Warehousing
• Warehousing Evolution by the Numbers
E-Commerce Impact
• Where Do We Go From Here?
• Growing E-Commerce
Drives Changes
• Embracing Technology in New Ways
Modernization
• Labor Constraints:
A Leading Automation Driver
• The First Steps Toward Automation
• Implementation Priorities for
Robotics Automation
Perspectives
• Warehouse Operations
by Industry
• Regional Perspectives
• Key Takeaways
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ZEBRA TECHNOLOGIES
Overview
Key themes and comparisons
• Disruption as a Catalyst for
Change in Warehousing
• A Global View of Warehousing
• Warehousing Evolution
by the Numbers
4
5. ZEBRA TECHNOLOGIES
New Threats to Global
Supply Chains
Disruption as a Catalyst for Change in Warehousing
While the pandemic highlighted how quickly
supply chain issues can impact the availability
of goods, disruption can take place at any time
due to natural disasters, geopolitical tensions,
cyberattacks, labor strikes and more.
• More complexity brings on more reliance and
the need for collaboration amongst supply
chain partners
• Supply chain visibility more evident than ever
• Warehousing decision-makers realize they
need to do their part to support these efforts
85%
77%
Add third-party logistics (3PL)
services support within five years.
Report drop shipping volumes direct
from manufacturers increased an
average of 22% over the past two years.
54%
Invest in increased visibility
across the supply chain in the
next 1-3 years.
D E C I S I O N - M A K E R S I N A L L S E C T O R S
D E C I S I O N - M A K E R S I N R E T A I L
D E C I S I O N - M A K E R S I N A L L S E C T O R S
6. ZEBRA TECHNOLOGIES
A Changing Workforce Has
Raised Expectations
As a generation of digital natives
enters the workforce, the importance
of technology has increased, as well
as competition for labor.
Many decision-makers face
staffing challenges, but still must
ensure productivity regardless
of these challenges, therefore:
Expect business
software and
hardware devices
to be as easy to
use as their
personal
smartphones.
83%
Agree that
technology
advancements will
make the warehouse
environment more
attractive to workers.
92%
Agree they would be
more likely to work for
an employer that gives
associates modern
devices versus one
that provides older or
no devices.
83% Rank offsetting recruitment
challenges as one of the top
three drivers for implementing
automation.
66%
Associates have their expectations for the role
technology will play in the warehouse environment:
Disruption as a Catalyst for Change in Warehousing
of decision-makers
using or plan to
automation within
three years,
7. ZEBRA TECHNOLOGIES
Shifts In Consumer Behaviors Affect Warehouse Operators
Consumers want alternatives to in-store shopping. The focus on fulfillment has steadily increased since
2019, as evidenced by the pressure decision-makers report to deliver on new fulfillment priorities.
Source: 1Zebra 14th Annual Global Shopper Study, Zebra Technologies, 2021
of shoppers
Prefer to have items
delivered to them rather
than picking them up1
80% 73%
58%
86%
of shoppers
Placed an online order
to be delivered to them
within the three-month
period1
of decision-makers
Report increased
shipping volumes on
average +24% over the
past two years for
fulfillment to consumers
of retail decision-makers
Are under pressure to
offer a variety of
delivery options and
speeds1
(+43% since 2019)
Disruption as a Catalyst for Change in Warehousing
8. ZEBRA TECHNOLOGIES
The Result: A Focus On Modernization
Decision-makers realize the need for resiliency, understand the implications of
not making changes and are taking steps to modernize their operations.
61%
87%
Plan to implement
real-time inventory
tracking within a year
Agree new technology is
needed to be competitive
in the on-demand economy
87%
Plan to accelerate timelines
of modernization projects
within three years
80%
Agree the pandemic
prompted faster
modernization
DECISION-MAKERS FOCUS ON WAREHOUSE MODERNIZATION
A Global View of Warehousing
9. ZEBRA TECHNOLOGIES
Operational Velocity Demands A New Way Forward
The sudden rise in e-commerce activity highlighted the outcome of several
unaddressed individual challenges combining under pressure.
These top six challenges plague warehouse decision-makers today:
DECISION-MAKERS’ TOP SIX CHALLENGES DUE TO INCREASED E-COMMERCE
1.
Faster delivery to
end customers
2.
Increased
transportation
costs
3.
Inventory accuracy
and visibility
4.
Shorter order
lead times
5.
Unpredictable
consumer demand
6.
Complexity of
omnichannel
logistics
A Global View of Warehousing
10. ZEBRA TECHNOLOGIES
Greater Focus On Outbound Operations
2 0 1 9
Generalized recruitment,
productivity and utilization concerns
T O D A Y
Specific focus on operational challenges provide
focus for better prioritization for improvements
% of decision-makers
Percentage point (pp)
Increase from 2019
Packaging, Staging and loading 36% +11 pp
Order fulfillment time 35% +5 pp
Picking efficiency 35% +5 pp
Order accuracy 32% +3 pp
OUTBOUND FULFILLMENT
CHALLENGES
Warehousing Evolution by the Numbers
11. ZEBRA TECHNOLOGIES
Addressing Labor Constraints
More than half of decision-makers
Report finding and training workers among their
biggest challenges for their organization
4.7 weeks Average
Time to train workers to full productivity in
warehouse operations
85% of decision-makers
Plan to prioritize labor optimization within the
next three years
Workers play a key role in making
warehousing operations more resilient,
and labor challenges are a significant
concern among decision-makers.
A Global View of Warehousing
12. ZEBRA TECHNOLOGIES
Employers Recognized
The Need To Keep
Employees Satisfied
Front-line workers reflect on employers’
hiring and retention challenges the past two
years and how it has impacted them
82%
Of associates say
positive workplace
changes are happening
amid labor shortages
60%
Improved working
conditions
57%
Used technology to
make work easier
45%
Increased
wages, bonuses
and perks
43%
Provided technology
to enable flexible
work shifts
Warehousing Evolution by the Numbers
13. ZEBRA TECHNOLOGIES
Decision-makers Trend Toward
Optimizing Employee Experiences
Making the connection
between employees’
reported positive impact
and employers’ desired
outcomes
• Shift from simply connecting
workers to enterprise systems
to optimizing their experience
with mobility
• Task-specific technology is
used to support the desired
outcome of team productivity
and workflow compliance—
worker success
• Within five years, greater
reliance on real-time visibility
provides more automated
decision-making support to
front-line workers
Decision-Makers’ Most Desired Outcomes
Improved
individual worker
productivity
Improved team
productivity and
workflow conformity
Increased asset
visibility and
utilization
Operating with real-
time guidance and
decision-making
Operating with
data-driven
performance
All associates are connected
to warehouse or enterprise
systems and capturing every
inventory move.
All associates can comply with
procedures, using the right
technology for their individual
tasks and workflows.
Goods, people and assets
can be seen or tracked
automatically.
The ability to locate assets and
people and analyze data for best-
next-move automated alerts.
Use multiple data sets wall-to-
wall to enable machine learning
and artificial intelligence to drive
automated decision-making.
Percentage
of
decision-makers
0
10
20
30
40 Connected
workforce
31%
41%
Optimizing mobility
28% 28%
13%
Real-time visibility 69%
2019 2022 2027
Warehousing Evolution by the Numbers
Most desired outcome
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ZEBRA TECHNOLOGIES
E-Commerce Impact
Growth areas to
withstand change
• Where do we go from here?
• Growing e-commerce drives
changes
• Embracing technology in new
ways
14
15. ZEBRA TECHNOLOGIES
Pressure to Feed the Omnichannel Ecosystem
Decision-makers surveyed across all sectors have plans to address the rise
in e-commerce that are both immediate and expected to persist over time
Warehouse operators cited
shipping volumes have
increased more than 20% on
average the past two years in:
• Fulfillment to businesses
• Fulfillment to consumers
• Drop ship direct from manufacturers*
Decision-makers’
Top Operational Challenge:
Growth Areas in the Next Five Years
(Percentage of Organizations)
By 2025 By 2027
RETURNS
MANAGEMENT
*among retailers only
Implementing New Processes or Services
Add real-time inventory tracking Increase returns management operations
Offer value-added services Utilize task interleaving
84% 93% 82% 93%
81% 93% 79% 92%
Increasing Volumes
Increase volume of items shipped Increase stock-keeping units (SKUs)
83% 91% 82% 91%
Where Do We Go From Here?
16. ZEBRA TECHNOLOGIES
Meeting Demands
Leaning more heavily on
third-party logistics (3PL)
Plan to add third-party logistics
(3PL) services or operations to
support increased e-commerce
activity.
With warehouse operations’ role in customer satisfaction,
organizations recognize that they may not have the
specialization or the technology to quickly ramp up their
operations to meet the demands
Front-line workers still very
much in demand
Decision-makers realize they need people to meet
new customer demands, despite the shrinking labor
pool and availability of new automation solutions
74%of decision-makers
Plan to expand their workforce
to support their increased
focus on e-commerce.
86%of decision-makers
Within 3 years Within 3 years
Where Do We Go From Here?
17. ZEBRA TECHNOLOGIES
Increasing Demand For Warehouse Space
42%
Manufacturing
More Space
Every $1 billion of e-commerce
sales requires 1 million sq. ft.
new distribution space
Rapid E-commerce
Growth
Online buying trends
continue to escalate
$6.4 Trillion
Expected e-commerce
retail sales 20242
1.5 Billion
Additional square feet
of warehouse space will be
required globally for e-commerce
growth by 20251
Sources: 1CBRE, June 2021, 2B2C E-Commerce, Retail e-commerce sales
worldwide from 2014-2024, Statista, 2022
Percentage increase in number of facilities
by industry in the next five years:
38%
Wholesale
Distribution
32%
Retail
+23% from 2021
Warehouse Facility Growth Comparison Through 2027
2019
5.5
2022
10.9
2027
14.9
(+36% expected increase)
Average number of facilities (all industry sectors)
Growing E-Commerce Drives Changes
18. ZEBRA TECHNOLOGIES
Operational Improvements Lead The Way To Modernization
As 87% of decision-makers accelerate modernization project timelines and 62% increase funding to modernize
and/or scale existing projects, the opportunity to connect such projects to planned facility additions or
expansions can deliver a greater return on investment (ROI)
Decision-Makers’
Improvement Plans
In the next 1-3 years
Increase Visibility
55%
Invest in inventory
and asset visibility
within the warehouse
54%
Invest in increased
visibility across the
supply chain
Support Front-Line Workers
56%
Automate workflows
54%
Prioritize labor
optimization
53%
Invest in robotics
53%
Invest in software that
helps automate analytics
and decision making
Growth Areas in the Next Five Years
(Percentage of Organizations)
Reevaluating Physical Operations
Expand size of warehouse facilities Increase number of warehouse facilities
Decrease fixed automation in
favor of more flexible automation
Add third-party logistics (3PL)
services/operations
86% 96% 77% 87%
79% 89% 74% 85%
2022 By 2027
Growing E-Commerce Drives Changes
19. ZEBRA TECHNOLOGIES
While technology investment carries some risk,
82% decision-makers say their organizations
believe investing in automation far outweighs
the risk of not implementing it.
20. ZEBRA TECHNOLOGIES
Decision-makers Rate Operational Maturity By 2027
10% Siloed and Reactionary
Inefficiencies due to lack of inventory
and workflow visibility
32% Augmented Workers with
Mobility and/or Automation
15% improving operations by gaining
basic control of operations through
capturing each inventory move
17% optimizing the use of mobility by
deploying devices and automation
based on the task, safety and proper
ergonomics
58% Augmented Workers Plus
Use of Real-Time Visibility
16% targeted use of sensors to
automate tasks
23% orchestrate widespread use of
real-time visibility to automate decision-
making based on location
19% use analysis of multiple data sets
to constantly predict and adapt operations
58%
32%
10%
Decision-makers understand the importance of technology, with 87% confirming the need
to implement new technology to stay competitive in the current on-demand economy.
Embracing Technology in New Ways
21. ZEBRA TECHNOLOGIES 21
From Data Capture To
Data-driven Decisions
By 2025, 82% of warehouse operators and
IT leaders plan on investing in software for
automating analytics and decision making
Software-as-a-Service Technology Implementation
Device Data Management Machine Learning Predictive Analytics
39%
96% 96%
38%
36%
91%
2022 By 2025
Embracing Technology in New Ways
22. ZEBRA TECHNOLOGIES
Speeding Up Data Capture To Solve
Pressing Outbound Fulfillment Challenges
With respondents’ heightened concern for outbound packing, staging
and loading operations, they have turned to sensor-based technologies to
help automate data capture, information flow and decision-making. Some of
the ways sensor-based technologies support these workflows include:
Radio frequency identification (RFID)
provides irrefutable proof of carton contents
at shipping
Real-time location systems (RTLS)
quickly locate material handling equipment,
associates and inventory, even in motion
Mobile dimensioning software
can capture accurate parcel dimensions to
streamline operations with improved load
planning and space utilization
Machine vision systems
document outbound parcels by inspecting labels
Fixed industrial scanning
automates sortation workflows for outbound staging
Embracing Technology in New Ways
23. ZEBRA TECHNOLOGIES
Implementation Plans for Sensor Technologies
Each of these sensor inputs can be used with software applications powered by machine learning
and artificial intelligence algorithms to provide more prescriptive guidance to front-line workers
33%
Positive Radio Frequency
Identification (Tags,
Readers and Printers)
Indoor Location Services Fixed Industrial Scanning Machine Vision Temperature Monitoring
Sensors and Smart Labels
Mobile Dimensioning Bluetooth Low Energy
83% 92% 28% 82% 93% 30% 80% 92% 24% 80% 90% 28% 77% 90% 21% 78% 90% 24% 76% 86%
2022 By 2025 By 2027
Embracing Technology in New Ways
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ZEBRA TECHNOLOGIES
Modernization
Addressing challenges today and
tomorrow through technology
• Labor constraints: a leading
automation driver
• The first steps toward
automation
• Implementation priorities for
robotics automation
24
25. ZEBRA TECHNOLOGIES
Labor Constraints: A Leading Automation Driver
• Warehouse labor is becoming increasingly difficult to attract and retain.
• Decision-makers say it takes an average of 4.7 weeks to train new staff to
full productivity in warehouse operations.
• Despite these concerns, adding labor is still in their plans.
• People will continue to play a significant role in the warehouse—but
technology will too.
Decision-makers need a backup plan in case it takes longer than
expected to hire enough people, especially during peak periods.
Say a greater reliance on
automation is in their future
Say implementing automation will
help offset recruitment challenges
8 in 10 66%
Top three labor initiatives
ranked by decision-makers
and associates alike
1. Reduce unnecessary tasks
so front-line workers can
focus on customer-centric
work
2. Optimize the use of
temporary/seasonal labor
3. Address worker comfort
and ergonomics
of decisions-makers who
will implement automation
within 3 years
decision-makers
26. ZEBRA TECHNOLOGIES
Technology’s Value
In Labor Recruitment
Associate sentiment is strongly influenced
by the technology their employer provides them,
and warehouse decision-makers also agree.
92%of associates 87%of decision-makers
Labor Constraints: A Leading Automation Driver
Agree technology advancement will make the
warehouse environment more attractive to workers
27. ZEBRA TECHNOLOGIES
Putting it All Together
Fortunately, most decision-makers report some level of their workforce is already
augmented with technology or devices, and they hope to achieve greater levels of
automation to advance their worker augmentation plans within the next five years.
A significant
advantage
Today’s automation
technologies can start
small with options that
do not require
reconfiguration of floor
space, then scale up as
use cases are proven
Decision-Makers’ Technology Plans to Augment Labor with Devices and Automation
No Augmentation
Partial
Augmentation
Full
Augmentation
Full
Augmentation Plus
Partial Facility
Automation
Full Facility
Automation
All paper-based or fixed
workstation systems
Some workers equipped
with mobile devices
Most workers equipped
with mobile devices
Augmented workforce
collaborates with some
automation
No worker involvement
in specific workflows
No worker involvement
in entire facility
Percentage
of
decision-makers
0
10
20
30
2022 By 2027
Labor Constraints: A Leading Automation Driver
Augmentation and/or automation plans
28. ZEBRA TECHNOLOGIES
Getting Started
of decision-makers
61%
9 in 10
Will seek outside resources to help identify
and execute warehouse optimization and
automation solutions within five years
Implementing
Warehouse Automation
Augmenting labor with software and
devices first is the best way to introduce
automation into warehouse operations
83%
89%
Decision-makers
(+6 pp since 2019)
Associates
The First Steps Toward Automation
Uncertain where to start automating
their warehouse operations
decision-makers
29. ZEBRA TECHNOLOGIES
Equipping Workers With Mobility Devices And Printers
Decision-makers expect to use a variety of devices and form factors, which will help
them better optimize the use of mobility
Handheld Mobile Computers with
Built-in Barcode Scanners
Wearable Computers
and Peripherals
43%
83% 92%
2022 By 2025 By 2027
Desktop Barcode Label Printer
34%
84%
94%
Industrial Barcode Label Printer
32%
81% 92%
Vehicle-Mount Computer
27%
79%
91%
40%
84%
94%
Mobile Barcode Label Printer
32%
83%
94%
Ultra-Rugged Scanners
29%
80%
91%
Rugged Tablet
25%
81% 92%
25%
80%
91%
Decision-Makers See the
Value of Connected Workers
Push-to-talk and messaging solutions
The First Steps Toward Automation
30. ZEBRA TECHNOLOGIES
Lightening The Workload
For Front-line Workers
30
As warehouse operators reimagine their operations,
they are looking for options to use space more
efficiently and improve front-line workers’ productivity.
Associates’ Top Benefits of Working
with Autonomous Mobile Robots (AMRs)*
83%
Increases
productivity
83%
Reduces travel
time and walking
73%
Improves accuracy
81%
78%
Agree AMRs would
make warehouse jobs
less stressful for them
and their colleagues.
Agree walking fewer
miles would make their
job more enjoyable,
even if they had to pick
more items.
Implementation Priorities for Robotics Automation
Associate perspectives on reducing
stress and physical requirements
*Associates have experience using/working with autonomous mobile robots.
31. ZEBRA TECHNOLOGIES 31
31
Person-to-Goods
Worker picks in warehouse aisles,
guided by AMR
Goods-to-Person
Goods brought to worker at
a pick station by AMR
Materials Movement
Individual items, cartons, totes or pallets
moved by AMR alongside workers and
material-handling equipment
Materials Movement and Sortation
Individual items or cartons moved by AMR
using special logic and form-factor
enhancements to allow for sorting
34%
62%
93%
28%
55%
89%
23%
53%
90%
25%
53%
90%
2022 By 2025 By 2027
Current and Anticipated AMR
Implementation Plans
Implementation Priorities for Robotics Automation
As operators grapple with challenges around order fulfillment
processing time, picking efficiency, order accuracy and outbound
shipping operations, they are also gravitating to automation
solutions that will directly address these challenges.
Decision-Makers
Overall Deployment
Plans for Autonomous
Mobile Robots
90%
27%
Today By 2027
32. ZEBRA TECHNOLOGIES
Expansion Plans And Safety
32
One attractive option for decision-makers is the
robot-as-a-service (RaaS) model.
Operators can implement a robotics solution without
making a large capital expenditure, while still having
flexibility to scale and adapt as demands change.
19%
74%
88%
Robot-as-a-service (RaaS)
Today by 2025 by 2027
76% 84%
Report they would feel safe
themselves or their employees working
alongside autonomous mobile robots
(AMRs), even though they may not
have worked directly with them yet.
Safety as a Top Priority: Associate
and Decision-Makers’ Perceptions
Flexibility to scale and adapt
of all associates of all decision-makers
Implementation Priorities for Robotics Automation
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Perspectives
Breaking it down
• Warehouse Operations
by Industry
• Regional perspectives
• Key takeaways
33
34. ZEBRA TECHNOLOGIES
Third-party Logistics (3PL) And Manufacturing
As more supply chain partners increase their reliance on
3PLs, 30% of 3PL decision-makers cite onboarding new
customers quickly as a challenge for their organization
stemming from increased e-commerce activity
3PL organization prepare to
support supply chain partners
45%
Evolution of 3PL Decision-Makers’ Implementation Plans
74%
99%
2022
Freight forwarding
BY 2023
Inventory storage
and management
BY 2027
Order fulfillment
Manufacturers are leading the way in implementing
indoor location solutions, with 34% already
implementing this technology compared to the global
response across all sectors of 28%
Manufacturers’ warehouse operations
critical to plant and fulfillment
72%
Evolution of Manufacturing Decision-Makers’ Implementation Plans
84%
91%
BY 2023
Reverse logistics solutions
BY 2025
Just-in-time manufacturing
(Kanban)
BY 2027
Direct-to-consumer fulfillment
(Item-level shipping)
MOST IMPLEMENTED MOST IMPLEMENTED
Warehouse Operations by Industry
35. ZEBRA TECHNOLOGIES
Retail and Wholesale Distribution
35
To respond to e-commerce growth, many retailers are also
leveraging their brick-and-mortar stores for order fulfillment:
The influence of omnichannel
shopping on retail warehousing
61%
BACK-OF-STORE
67%
FRONT-OF-STORE
44%
Retail Decision-Makers’ Implementation Plans
80%
93%
2022
Regional/near-shoring
of fulfillment centers
BY 2025
Offer fulfillment services for
small-to-medium businesses
BY 2027
Shared distribution /
fulfillment centers
Almost four in 10 decision-makers cite order fulfillment
processing time as their biggest operational challenge,
compared to the global response of 35% across all industries.
Wholesale distributors making changes
to ensure inventory availability
55%
51%
Wholesale Distributors Adapt to Supply Chain Challenges
49%
47%
EXISTING PRODUCTS
Requesting design changes
from manufacturers
NEW PRODUCT MIX
Selling based on product
availability
KEEPING TRACK
Investing in real-time
tracking of shipments
of wholesale distribution decision-makers will
have invested in robotics within the next year
Warehouse Operations by Industry
36. ZEBRA TECHNOLOGIES
• Eighty-six percent of North American decision-makers say the
pandemic has prompted them to evolve and modernize more
quickly, the most of any region
• Within three years, 81% of decision-makers plan to implement
person-to-goods AMRs to collaborate and guide workers in order-
picking workflows
• Fifty-eight percent of decision-makers say the time to fill open
positions is too long, making this the top challenge they need to
address when it comes to labor initiatives. This is higher than all
other regions and 7 pp higher than the global response
NORTH AMERICA
North America and Europe
36
• Eighty-five percent of associates say they are more likely to
work for an employer that provides more modern devices to
use for tasks, 4 pp higher than the global response
• In five years, 83% of decision-makers in Europe say they will
use mobility in their operations, with 47% also planning use of
sensors for real-time visibility that will allow for automating
tasks or decision-making
EUROPE
Regional Perspectives
37. ZEBRA TECHNOLOGIES
Latin America and Asia-Pacific
• Decision-makers expect the highest
growth in both number (+44% more
facilities) and size (+31% more
square footage) of warehouse
facilities in the next five years
• Ninety-six percent of associates
believe implementing warehouse
technologies such as robotics and
devices would help attract and retain
workers, the highest of any region
• Today, more decision-makers are
implementing innovative wearable
computers and peripheral devices
than any other region (47%). This
lead is projected to continue,
with 98% expecting to implement
these technologies within five years
LATIN AMERICA
Regional Perspectives
ASIA-PACIFIC (APAC)
• Nine in 10 decision-makers agree machine
vision and/or fixed industrial scanning
technology in key areas would save time
and eliminate errors. Yet, only one-quarter
say they are currently using or
implementing these technologies
• Decision-makers and associates differ in their assessment of the
biggest challenge impacting their organization. Seventy-eight
percent of associates rank fulfilling higher order volumes from
increased e-commerce activity as the biggest challenge, while
74% of decision-makers feel predicting inventory availability and
confirming inventory accuracy are most challenging
38. ZEBRA TECHNOLOGIES
Key Takeaways
38
• Decision-makers agree they must implement new
technologies to be competitive in today’s on-
demand economy, and they are accelerating
timelines and increasing funding
• Front-line workers say positive workplace
changes are happening even amid labor
shortages. They report improved working
conditions and new technology to make their jobs
easier, increased wages and bonuses, and more
flexible work shifts due to new technologies
Market Pressures Become
Catalyst for Positive Changes
39. ZEBRA TECHNOLOGIES
• Shipping volumes have increased more than
20% on average for both business-to-business
and business-to-consumer orders since 2019
• Increased e-commerce activity is challenging
decision-makers with unpredictable customer
demands, faster delivery times and the need
for greater inventory accuracy
• Operationally, returns management and
several outbound fulfillment-related operations
are challenging decision-makers
Top Warehouse
Challenges
Key Takeaways
39
40. ZEBRA TECHNOLOGIES
Reducing unnecessary tasks performed by front-line
workers is a priority. There is concern business objectives
won’t be met unless more technology investments are
made to improve operations
• With labor optimization as an initiative for decision-makers,
augmenting workers will not only be with mobile devices, but
also collaboration with automation solutions to help ease the
workload within five years. Some also plan partial or full facility
automation. Only 5% will continue to use paper-based or fixed
workstations.
• Almost six in 10 are expected to be utilizing mobility with some
level of automated data capture, location solution, or predictive
and adaptive data analytics, with more emphasis on automating
decision-making and constantly predicting and adapting
operations in real time
Five-Year Technology Outlook
for Warehouse Operations
Key Takeaways
40
41. Zebra (NASDAQ: ZBRA) empowers organizations to thrive in the on-
demand economy by making every front-line worker and asset at the
edge visible, connected and fully optimized. With an ecosystem of
more than 10,000 partners across more than 100 countries, Zebra
serves customers of all sizes—including 94% of the Fortune 100—
with an award-winning portfolio of hardware, software, services and
solutions that digitize and automate workflows. Zebra recently
expanded its industrial automation portfolio with its Fetch Robotics
acquisition and increased its machine vision and AI software
capabilities with the acquisitions of Adaptive Vision and antuit.ai.
Your Partner in Forward-Thinking Fulfillment
To learn how Zebra can help optimize and advance your operations
with a new standard for accelerating warehouse modernization,
please visit
www.zebra.com/warehouse
About Zebra
Zebra Technologies commissioned a global research study among decision-makers and associates to analyze the latest trends and technologies transforming warehouse operations. The study includes over 1,500 respondents across organizations within manufacturing, retail, transportation, logistics and wholesale distribution. Azure Knowledge Corporation administered the online survey in January – February 2022.
Today, we are going to look at some of the major trends that emerged from the study. I’ll break it down into four sections:
Overall warehousing trends as a result of recent global disruptions
The impact of increased e-commerce activity
Modernization today and tomorrow and the implementation trends and attitudes towards technology and automation
And finally, industry and regional perspectives and wrapping up with some key takeaways
Let’s get started…
Let’s talk about some key themes taking place today in warehousing and some comparisons to our survey conducted in January-February 2019.
In this study, one of our objectives was to look at how a major disruption could impact an industry like warehousing. We know that disruption can take place at any time due to natural disasters, geopolitical tensions, cyberattacks, labor strikes, pandemics and more. With the global nature of the pandemic, it was a common experience amongst all our survey participants.
As supply chains become more complex, the more reliance there is amongst supply chain partners, the more collaboration and visibility is needed and the more each node of the supply needs to do their part to support the global effort.
A few examples of that illustrate this include:
Decision-makers plans to utilize third-part logistics services. At the rate operators need to get up to speed, use of these services that are equipped to execute specific operations will be the alternative for some operators.
Retailers show a greater dependence on their manufacturing partners to ship to customers.
Currently, about one-third of respondents are investing in increased visibility ACROSS the supply chain, however in the next 1-3 years more than half of the respondents said this is something they plan to do.
Another objective for the survey was to look at the changes in labor and the expectations and decisions incumbent on warehouse decision-makers today. We’ve all followed the headlines around the challenges many regions throughout the world are having finding, training and retaining labor. For the first time, we’ve included the voice of the associate in our survey.
Associates have expectations around technology, that may help shed some light on how to be competitive during times of labor challenges.
In the face of labor challenges, decision-makers still need to keep operations running. Of those decision-makers currently using or planning to use automation within the short term ranked offsetting recruitment challenges among the top three drivers for implementing it.
Consumers want alternatives to in-store shopping. The focus on fulfillment has steadily increased since 2019, as evidenced by the pressure decision-makers report to deliver on new fulfillment priorities.
As you can see here:
Decision-makers are under pressure to offer a variety of delivery options and speeds
They are seeing an average increase in consumer fulfillment of +24% over the past two years
Shoppers show a preference for having items delivered to them according to our 14th Annual Global Shopper Study.
What did all of these disruptions prompt for warehouse decision-makers?
The pandemic indeed was a driver for faster modernization according to 80% of respondents.
87% plan to accelerate timelines of modernization projects.
Within a year, 61% plan to implement some form of real-time inventory tracking.
And almost 90% see that new technology is needed to be competitive in today’s on-demand economy.
Let’s look more closely at some of the drivers…
This disruption was the perfect storm of several challenges that were probably left unaddressed and when combined under pressure, the result likely opened the eyes of many operators.
Let’s see what they need to address…
Focusing on specific challenges…. With the rise in e-commerce, decision-makers in the current survey ranked returns management as their top operational challenge, along with many fulfillment-related outbound operations, which is not surprising as you compare that to the list of top six challenges.
Concerns and priorities in the 2019 survey were more generalized around recruitment, productivity and utilization. Today, warehouse operators are focused on identifying their weakest operational areas. This will enable them to prioritize improvements more effectively.
At the root of many of these challenges, labor is an area many admit needs addressing:
Fining labor is a challenge, but we know from our associate perspectives that technology is a competitive advantage.
Once, labor is retained, it is almost 5 weeks to get them to full productivity.
While labor is at a premium, they must make the most of the staff they have.
The good news is, many employers recognized how important their labor was to them and made positive workplace changes. This finding actually surprised us. With headlines dominating the news about short-staffed warehouse and fulfillment centers, we thought the impact would be negative, but 82% of associates say they were impacted positively. In fact, when we dove deeper, while increased wages and bonuses were a factor, we found that non-monetary improvements were recognized by a higher percentage of respondents.
To pull this all together, let’s look at what decision-makers desired outcomes are to support their commitment to their associates… (click to go to next slide)
ANIMATION NOTE:
CLICK TO BEGIN ANIMATION OF CHART…. After that, ANIMATION IS AUTOMATIC WITH A SLIGHT PAUSE BETWEEN LAYERS.
In 2019, nearly a quarter (23%) of respondents managed operations with all paper-based or fixed workstation systems. Decision-makers say that will drop to only 5% within the next five years, and a greater focus will be placed on augmenting workers with mobile devices and automation solutions.
[CLICK TO BEGIN ANIMATION] Back then, decision-makers were focusing on simply connecting warehouse workers with enterprise systems (31%), and some were optimizing that experience (32%). Since then, there has been a noticeable shift,
TODAY 41% said they were focused on giving workers the right technology for the task to ensure improved team productivity and workflow compliance outcomes.
IN FIVE YEARS, almost 70% of decision-makers would like to achieve more real-time visibility of people, assets and goods, as well as the ability to automate decision-making.
Now that we’ve taken a global view of warehousing in respect to where we were in 2019, where we are now and a little bit about where decision-makers are going, let’s put a little more focus on where we go from here by looking at the growth areas needed to withstand change and start to look at how technology can be embraced to forge our way forward.
In the last two years, nine in 10 warehouse operators cited average shipping volume increases of 23% in business-to-business fulfillment, with almost as many seeing the same average increases for direct-to-consumer fulfillment. Seventy-seven percent of retailers cited manufacturer drop-ship volumes have climbed 22% on average as well for them.
As a result, respondents say they are planning to increase the volume of items shipped and stock more SKUs.
Returns management was cited as top operational challenge and as such, the majority of decision-makers plan to increase returns management operations in the next five years.
In 2019, about seven in 10 decision-makers planned expansion of returns management operations, addition of value-added services and utilization of task interleaving to streamline workflows within a three-year period. However, with increased e-commerce activity, more say they will add or expand these operations in three years:
• Returns management operations: +12 pp
• Add value-added services: +13 pp
• Utilize task interleaving: +9 pp
We also see new processes to address the challenges we talked about earlier around inventory accuracy and availability and addressing unpredictable consumer demand through the offering of value-added services.
All of these growth areas underscores what has been done and still remains to realign operations with today’s omnichannel ecosystem. Both businesses and consumers must be supplied with the right inventory at the right time, and this is putting pressure on warehouse operators to ensure faster on-time delivery.
To help meet demands, decision-makers are turning to supply chain partners in the 3PL sector. Three-quarters of decision-makers say they’ll add third-party logistics (3PL) services or operations to support increased e-commerce activity within the next three years. In 2019, only 60% of respondents planned to implement this strategy to support their organization’s warehouse operations over a three-year period.
Decision-makers realize they need people to meet new customer demands. Despite the shrinking labor pool and availability of new automation solutions, 86% of decisions-makers plan to expand their workforce in the next three years to support their increased focus on e-commerce. In 2019, 73% of decision-makers expected to add headcount as part of their implementation plans.
Today’s increased e-commerce activity correlates with an increased demand in the commercial real estate market. CBRE, a commercial real estate services and investment company, estimates that every $1 billion of e-commerce sales requires 1 million square feet of new distribution space. With the expected $1.5 trillion rise in e-commerce by 2025 globally, CBRE predicts 1.5 billion square feet of warehouse/distribution space will be needed to accommodate this growth.
In alignment with CBRE’s predictions, decision-makers confirmed plans to expand or increase their warehouse facilities in the next year due to rising e-commerce activity. Within the next year, 72% decision-makers said they will have expanded the size of their warehouse facilities, 55% will have increased the number of warehouses, and 50% will relocate their facilities.
The chart on the right illustrates the exponential growth in facility growth.
Manufacturers and wholesalers expect the most significant increase in the number of warehouses they will operate in the next five years, with a 42% and 38% increase in the number of facilities, respectively. Retailers have one of the lowest expected increases in number of warehouses (a 32% increase in five years), likely due to their ability to leverage existing brick-and-mortar stores for order fulfillment.
How does this relate to operational improvements? ….
As decision-makers accelerate modernization project timelines and increase funding to modernize and/or scale existing projects, the opportunity to connect such projects to planned facility additions or expansions can deliver a greater return on investment (ROI).
As you can see here, just in the next one-to-three years, over half of the respondents plan to increase visibility within their facilities and across the supply chain, as well as support front-line workers by automating workflows, prioritizing labor optimization, investing in robotics and utilizing software that will help to automate analytics and decision making. Today, roughly a quarter to a third of the respondents are currently implementing these strategies to improve warehouse operations.
While technology investment carries some risk, 82% say their organizations believe investing in automation far outweighs the risk of not implementing it.
As we look at the growth areas and relate the challenges that prompt these areas of growth, it is logical to start thinking about the role technology can play. How are decision-makers embracing or planning to embrace technology in new ways?
Well, today, in addition to augmenting workers with devices and/or automation, five in 10 say they’re also using sensor or real-time location technology in a targeted or widespread manner to speed up and add more visibility to their operations. Doing so helps them provide the best-next-move to their workers, as well as more predictive capabilities. By 2027, almost six in 10 plan to utilize real-time visibility to automate tasks, provide better decision-making and set themselves up for predictive and adaptive operations.
As decision-makers begin add more devices to their fleets, the data they can gather and use from those devices will become invaluable to them, so having tools to capture, extract and manage that data will be important. Making this one of the software-as-a-service technologies that decision-makers will look to in the future.
As more data is captured automatically and use of location is more prevalent, software that can analyze that data as it is being captured will be necessary. Machine learning and predictive analytics will serve warehouse operators in automating more decision making, so front-line workers can focus their attention on execution.
Let’s take a look at some of these technologies for automated data capture.
PRESENTER NOTE: These five technologies relate to the outbound operational challenges ranked by respondents as top operational challenges. Talk through how this automated data capture can help to free up labor to concentrate on more customer-centric tasks, yet provide the speed accuracy required to meet the demand of e-commerce.
Move to the next slide to show decision-makers’ implementation plans for these technologies.
Respondents indicated plans to implement a variety of sensor-based technologies for automated data capture and real-time, location-aware services.
When planning implementation of these technologies, it is important that the specific challenge that needs to be solved is identified so the right technology can be deployed to solve the problem at hand.
Now, that we’ve set the scene for what is happening and beginning to look at how to address it through technology, let’s take it one more step further and talk about the role of automation and the best way to make that transition.
We see that augmenting workers with devices and automating data capture are being embraced, let’s dig deeper into automation. It’s a topic that is top of many operators’ minds and can address a number of the outbound fulfillment-related challenges we’ve been discussing throughout this presentation.
To review, we see here some challenges we laid out earlier around labor:
Difficulties attracting and retaining labor
Long training time to full productivity
The desire to still add labor because of the important role they play
Due to these three factors, decision-makers say they will have a greater reliance on automation and according to those that have already implemented (or will in the next three years), they say it will help offset recruitment challenges.
Decision-makers and associates alike agree on the top three labor initiatives:
Reducing unnecessary tasks to focus on customer-centric work
Optimizing the use of temporary/seasonal labor
Addressing worker comfort and ergonomics
How will technology and automation help?...
Through this survey, we have heard loud and clear that technology matters and it can drive decisions for employer of choice. As we discussed earlier, 83% of associates agree they would be more likely to work for an employer that gives associates modern devices versus one that provides older or no devices.
So, let’s start to put this all together and see where decision-makers are planning to go with the technology they already have and automation….
Fortunately, most decision-makers report some level of their workforce is already augmented with technology or devices, and they hope to achieve greater levels of automation to advance their worker augmentation plans within the next five years.
As you can see here, use of augmentation with devices continues to thrive, but what we see is a very obvious shift in the use of collaborative automation. Sixty-four percent of decision-makers plan to augment workers with mobile devices or introduce collaboration with automation solutions in addition to mobility solutions to help ease the workload within five years. Twenty-one percent plan partial facility automation, while 10% will fully automate their facilities. Only 5% will continue to use paper-based or fixed workstations.
While respondents have these ambitions to add automation to their operations, the good news is that they can start small and scale as use cases are proven.
Let’s take a look at what this might look like. Where to begin…
<Chart may not be to scale, following are the data points for 2022 and by 2027>
No Augmentation 2022=17%, by 2027 = 5%
Partial Augmentation 2022=23%, by 2027=17%
Full Augmentation 2022=25%, by 2027=20%
Full Augmentation Plus 2022=15%, by 2027=27%
Partial Facility Automation 2022=14%, by 2027=21%
Full Facility Automation 2022=5%, by 2027=11%
Automating warehouse operations can be daunting, there are a lot of options. While a high percentage of decision-makers may be comfortable with integrating new technology into their warehouse ecosystems, 61% said they have some uncertainty about exactly where to start automating their warehouse operations. However, most agree augmenting labor with software and devices first is the best way to introduce automation, and within five years, nine in 10 decision-makers will seek outside resources to help identify and execute warehouse optimization and automation solutions.
Decision-makers expect to use a variety of devices and form factors, which will help them better optimize the use of mobility. Wearables see increased implementation, while rugged tablets see the most dramatic increase over the next three years. Greater implementation of mobile barcode label printers will bring efficiencies to workflows.
As operations deploy automation throughout their facilities and depend on mobile robotics for autonomous material movement, front-line workers will utilize their devices not only for data capture and retrieval, but also to interact and collaborate with mobile robots
As warehouse operators reimagine their operations, they are looking for options to use space more efficiently and improve front-line workers’ productivity. Our survey asked associates with experience with autonomous mobile robots about their personal perceptions and experience with autonomous mobile robots. Those who work alongside AMRs today confirm they have helped increase productivity and reduce walking/travel time (83%) and reduce errors (73%).
Overall, the majority of associates, whether they worked with AMRs or not, agree AMRs would make warehouse jobs less stressful for them and their colleagues and say walking fewer miles would make their job more enjoyable, even if they had to pick more items.
It is encouraging to see both perspectives—with such high agreement on the value automation can provide.
As operators grapple with challenges around order fulfillment processing time, picking efficiency, order accuracy and outbound shipping operations, they are also gravitating to automation solutions that will directly address these challenges. For example, when workers can utilize autonomous mobile robots (AMRs) to help guide what and where to pick—as well as save time transporting goods to, from and between pick zones—they can increase their productivity and accuracy.
AMRs that work collaboratively in the aisles with workers are used by a higher percentage of decision-makers and will be within five years.
Today, 27% of warehouse operators have already deployed some form of autonomous mobile robots (AMR) today. Within five years, that number is expected to grow to 90%.
Robot-as-a-service RaaS
As decision-makers begin to deploy robots in their operations, they have options to scale and adapt. One attractive option for decision-makers is the robot-as-a-service (RaaS) model.
Operators can implement a robotics solution without making a large capital expenditure, while still having flexibility to scale and adapt as demands change.
Safety as a Top Priority: Associate and Decision-Makers’ Perceptions
Similar to the perceptions around the ability to make a less stressful working environment, we asked all associates and decision-makers, regardless of their experience with AMRs, whether they would feel safe themselves or having their associates work alongside AMRs. Again, the majority feel it would be safe.
As we survey a variety of sectors in the supply chain that support warehouse operations and many countries around the world, our main report is a compilation of all sector and regional responses. We have also broken the data down to provide a high-level snapshot of some key findings for each industry sector and some of the key findings by region.
Let’s take a few minutes to see implementation plans for each industry and key findings for North America, Latin America, Europe and the Asian regions surveyed.
Third-party Logistics:3PL operators are expanding their services as opportunities arise from others in the supply chain that are planning more value-added services or need help handling day-to-day demands.
Manufacturing:Inventory and asset visibility in the warehouse is critical for manufacturers. Lineside replenishment with just-in-time inventory keeps assembly lines moving. Accurate accounting for the repairs or refurbishments received enables smooth track and trace and customer accountability. Inventory visibility as it moves from work-in-progress to finished goods allows for accurate inventory reporting.
Retail:Retailers have a variety of choices for managing how inventory gets to stores and end customers, from getting closer to delivery points to dedicating space for specific operations to having all operations under one roof. Decision-makers are considering a variety of options to keep customers satisfied with faster delivery.
Wholesale Distributors:Wholesale distributors are desperate to keep their shelves stocked and to maintain an accurate inventory account. From working with their suppliers on design changes to adjusting their product mix to investing in real-time tracking and air transportation, they have a variety of logistics concerns to address.
A few of the regional perspectives include:
For North America, decision-makers have recognized the pandemic as a catalyst for change with a higher percentage of respondents saying that it prompted them to modernize and evolve their operations mor quickly. As a modernization effort, 81% of decision-makers plan to implement person-to-goods AMRs to collaborate and guide workers in order-picking workflows. This will hopefully help to fill labor gaps as they try to fill open positions that almost six in 10 say are open for too long.
In Europe, technology matters to associates. Eighty-five percent of associates said they would prefer to work for an employer with modern devices. The good news is, the majority of employers plan to use mobility in their operations and almost half will additionally deploy sensor technology for more real-time visibility as well as a competitive advantage.
As for Latin America, we see growth in the number and size of warehouse facilities over the next five years. As talked about earlier in the report, this gives decision-makers the opportunity to connect innovation as they are building out their new facilities. This in turn provide a competitive advantage as they begin to staff these new facilities. As 96% of associates believe implementing warehouse technologies such as robotics and devices will help attract and retain workers, this percentage is the highest of any region. To speak to device usage today, a higher percentage of LATAM decision-makers indicated use of wearable computers and peripherals and will continue in implementation in the next five years.
In the Asia-Pacific (APAC) region, decision-makers see the value of technology such as fixed industrial scanning and machine vision for automated data capture, but to-date only one-quarter have implemented these technologies. The good news is that within five years, 95% of APAC decision-makers say they will implement fixed industrial scanning and 92% are planning to implement machine vision systems. Higher order volumes are challenging associates and predicting inventory availability and confirming accuracy are most challenging to decision-makers. For both associates and decision-makers alike, the implementation of these systems will be beneficial to help speed up workflows and increase accuracy.
Summarize the on-screen bullets
Summarize the on-screen bullets
Reducing unnecessary tasks performed by front-line workers is a priority for decision-makers and workers themselves. Both are concerned they will not meet their business objectives unless more technology investments are made to improve operations.
In the next five years, focusing on augmenting workers with devices will continue to be a priority for decisions, but also the data shows automation solutions that workers can collaborate with will make an appearance in warehouse operations to help ease workloads. More decision makers will opt for adding partial automation where they will need little to no worker interaction and some will even move towards full facility automation. Within five years, only 5% will continue to use paper-based or fixed workstations.
The use of real-time visibility and more automated data capture along with an augmented workforce will be embraced by almost six in 10 decision makers. This will allow for more automated decision-making and for a smaller percentage, it can mean constant predicting and adapting of their operations in real time.