According to Statista, the warehouse automation market was valued at over $23 billion in 2023, with that value expected to grow to $41 billion by 2027.
The value of warehouse automation is being recognised across various sectors.
The optimisation of supply chain processes – relies on automation to help brands remain agile and flexible to evolving customer and geopolitical demands while driving operational efficiency.
In the years following the COVID-19 pandemic and the resulting fallout, the need for reliable and agile supply chain operations has become evident for the long-term success of retail businesses, writes Manolo Reguart, Director of Strategy and Business Development, Clustag.
Within the retail supply chain, warehouse operations play a critical role, not only in tracking, storing and transporting inventory, but in order fulfilment. At such an important stage of the supply chain, accuracy and reliability are vital. From here, retailers can make informed decisions about their stock – whether re-stocking, re-routing or fulfilling orders from the warehouse itself. With this capability, retailers can remain adaptable to changing environments, and future-proof their brand as trends evolve.
RFID’s role in delivering automation
Automation plays a critical role in boosting efficiency during the warehouse phase of the supply chain journey. The more efficient warehouse practices are, the more benefits they can bring to the rest of the supply chain – such as increasing order fulfilment rates, and optimising stock transport and storage.
Traditionally, staff would manually count stock entering the warehouse, which is extremely time consuming, and also prone to human error. Utilising RFID technology, retailers can automate inventory management with up to 99% accuracy. This ensures that database information remains reliable and up-to-date in real-time as items move through the warehouse. From here, retail brands can significantly reduce time spent counting stock during the receiving process, and RFID-enabled inventory accuracy facilitates more informed, faster decision making for item storage and distribution.
With RFID tags added to products during the manufacturing process, items are automatically scanned upon arrival at the warehouse. As a box passes through, RFID readers scan tags at item-level, efficiently and effectively identifying all items that are received, without opening any package. Furthermore, the tags can provide information on the quantity, colour, size and type of product, providing complete, reliable visibility of inventory.
How automation reduces labour hours
In 2024, Statista stated that on average, 75% of employers worldwide are struggling to find talent to fill open positions. With ongoing labour shortages, it’s important that retailers can find solutions that help them overcome understaffing issues – especially within warehouses. Understaffed businesses struggle with a slower rate of productivity and increased risk of workplace injuries caused by physical exhaustion and high stress levels in their employees. Ultimately negatively impacting the bottom line of a business and compromising future growth opportunities.
With labour challenges in mind – automation provides an effective remedy, whereby human error is minimised and labour hours on repetitive tasks – such as counting inventory – are significantly reduced. Automation is particularly pivotal in inventory management. Poor inventory accuracy has a knock-on effect that carries on throughout the supply chain, resulting in stock management issues – such as understocking, overstocking and unfulfilled orders for shoppers. Consistent errors at the warehouse stage can cause unsatisfied end customers and a loss in revenue.
Improving workplace satisfaction and avoiding overworking employees allows warehouse employers to get the most out of their staff, while maintaining safety and wellbeing. Satisfied staff are more likely to be productive and deliver higher quality work, maximising individual efficiency and operating to the benefit of the business.
By automating repetitive, time-consuming processes – such as inventory management – retailers can relieve the pressure on warehouse staff during periods of labour shortage. In turn, operators can redirect their time towards other value-driven tasks that require human attention, such as quality control. Tasks can be completed to a high standard, while reducing labour hours and optimising operations. Helping future-proof warehouse operations. Technology helps brands become less reliant on staff availability and performance, while helping them remain agile within the warehouse. This is especially important during times of labour shortages and slow talent acquisition. During these phases, future-proofed retailers can continue processes as usual to deliver high quality products and services, despite staffing challenges.
The value of a future-proofed supply chain
External factors have the power to significantly impact supply chain practices. During the COVID-19 pandemic, many supply chains were brought to a halt, leading to several businesses failing to meet customer demands. During this time, a number of retailers missed out on a significant number of valuable sales opportunities that put the organisation at risk.
Panic buying, border closures and stay-at-home rules during the pandemic caused a change in customer expectations on how their demands are met. Not only did businesses have to adapt how they fulfilled orders, but they also had to increase their speed of production while battling disruptions caused by border closures.
While the pandemic is now a distant memory, its impact has lasted, and external factors will continue to affect how retailers operate. A compromised supply chain cripples an entire brand, and it’s crucial that organisations future-proof their operations to remain agile to changes.
Agile businesses can react quickly, maximise stock and upgrade processes whenever necessary. The right technology, integrated by the right partner, can provide flexibility by guiding organisations through these challenges. Technology partners can provide expert advice and recommendations, while providing upgrades and maintenance on existing technology, ensuring businesses and their supply chains are kept up-to-date and future-proofed.
The Future
As RFID provides visibility into supply chain operations, the technology can also integrate with wider supply chain software, such as Electronic Product Code Information Service (EPCIS), Warehouse Management Systems (WMS) and Enterprise Resource Planning (ERP). This provides traceability and transparency at each stage. As traditionally soiled data becomes clearly visible across the supply chain, this newly created interoperability allows businesses to seamlessly share data and drive efficiency at every opportunity.
With warehouse automation becoming a more popular concept every day, more businesses are better preparing themselves to survive and grow in the future. With RFID technology deployed within the warehouse, automation will benefit the retailer’s workforce, help drive inventory accuracy and reduce costs while optimising efficiency and meet evolving customer fulfilment demands.
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