Warehouse & DC Operations Survey: Ready to confront complexity

In fact, most of the data that our research team dug out of this annual project point to the fact that logistics professionals involved in warehouse and DC management are not only fully cognizant of the order fulfillment complexities and other challenges associated with e-commerce, but they’re making the investments and process adjustments necessary to keep pace.

Contributing editor Roberto Michel offers readers a peek at the overall findings of the survey starting on page 48. For this year’s analysis, Michel is joined once again by Don Derewecki, a senior consultant with St. Onge Company, and Norm Saenz, Jr., a managing director with St. Onge, a supply chain engineering consulting firm and Logistics Management’s partner for this annual research.

The feature is just the start. The entire research team will take a more comprehensive look at all of the findings in our annual survey Webcast on Thurs. Nov. 17. Attendees will be able to download the full data set at that time.

“It’s encouraging news across the board,” says Michel. “From tweaking operational processes, to tapping labor as a means of flexing capacity, to incrementally applying more technology, the survey clearly indicates that respondents have taken action and are confronting the complexities of omni-channel fulfillment.”

And while the team found that facility operations and workforce trends remain robust, so too are capital expenditure (CapEx) plans—news that should bring smiles to many faces across the industry. The average projection for CapEx for next year came in at $1.39 million, up slightly from the previous year’s projected average of $1.35 million. However, we found that the median for projections comes to $358.8 million, well above the previous year’s projected median of $314.8 million.

That bump up in median CapEx plans indicates that more average-sized operations—not just the big players—are ready to spend more on their DCs. “The fact that the median is up by 47.6% indicates that more small companies are getting into the game with investments—helping everyone involved in logistics and fulfillment,” says Derewecki.

While the team saw only modest increases in information technology (IT) investment plans, we did see increases across certain IT and materials handling automation solutions. “I would say that the best news form the IT findings is that the reliance on paper-based processes continues to decline,” says Saenz. “And it’s certainly encouraging to see that more companies are looking to apply more software, more automation and to increase their spending.”

One key takeaway that we pulled out of the findings is that e-commerce—and the customer service expectation that comes with it—is now affecting nearly every sector, be it manufacturing, distributors, carriers, as well as all level of retailers. According to our team, this mentality that revolves around “the new speed of business” may just be the sole reason we’re seeing investment jump.

“It became very clear this year that even companies that don’t directly participate in e-commerce now experience Amazon-type expectations from customers concerning rapid ordering and fulfillment,” adds Derewecki. “So the bar is set pretty high on requirements, and in response, the majority of respondents seem to be focused on improving their processes and the information systems that support those processes.”