Analyzing the Business Impact of Inefficient Motion in Warehousing

Customers today expect the perfect order with the fastest possible delivery 100% of the time, placing tremendous pressure on product companies and their distribution/warehousing channels.

The obligation to have the right barcode label on the right product with the right documentation, which is dispatched from the right warehouse at the right time and delivered to the right location without triggering returns and being complete is unprecedented.

VDC surveyed 160 warehouse operators and technology investment decision makers on their key investment and operational priorities and leading workflow-related challenges as part of a study for Newcastle Systems, a leading mobile powered workstation vendor. Fewer than 20% of respondents experience on-time shipments of orders from their warehouse locations at least 97% of the time.

This is a staggering statistic that also results in high operational costs, sub-optimized supply chains with unreliable delivery performance and schedules, and unhappy customers. Warehouse operators are struggling to not only fulfill these expectations but also retain an ever-fluid workforce that is increasingly burdened with the requirement to do the job faster despite scaled back resources due to the pandemic, manage greater capacity, and consistently improve accuracy and speed of order fulfillment.

There is a massive disparity in the warehouse performance metrics of ecommerce giants compared with those of small and medium-sized businesses; the latter are struggling to remain competitive with key order fulfillment benchmarks.

VDC believes that while the top 1% of organizations have successfully driven down error rates to less than 1%, majority of the businesses struggle with improving labeling accuracy, order fulfillment statistics, and overall efficiencies.

Warehouse workflows are not fully optimized and they are being forced to operate with 85%-95% of their pre-pandemic workforce according to VDC’s research. 40% of respondents indicated that the number one challenge facing them is poor warehouse workforce planning including labor allocation/hiring, task management, and worker productivity. Strategic technology investments will be crucial to increasing accuracy, improving speeds, and lowering overall workforce fatigue.

Our research to identify and measure warehouse workflow-related inefficiencies points to the growing efforts to cut down extraneous costs by eliminating unnecessary movement in order to reduce error incidence.