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RESEARCH BRIEF

MARCH 2015

Plans to Improve
Warehouse Efficiencies

variety of ordering, product mix, and shipping


Introduction variations. Fulfilling all orders correctly the first
The pressure to perform is on, and warehouses/ time, and backing up that activity with superior
DCs around the globe are playing pivotal customer service, have become critical goals for
roles in companies’ ability to live up to and/or shippers that want to stand above the crowd in
exceed customer and stakeholder expectations their respective industries.
in today’s competitive business environment.
Being compliant and operating efficiently in the To achieve those and other goals, companies
omni-channel retail environment, for example, need the right mix of warehouse location/
requires a level of precision and attention to space, technology, and human support. And
detail that allows shippers to respond to a wide while the basic fundamentals of product

Sponsored by On behalf of
Zebra Technologies Research Brief
Plans to Improve Warehouse Efficiencies

distribution haven’t changed much over proceeding with subsequent resolutions “We are under
the last two decades, with companies still and improvements. great pressure
relying on their warehouses to serve as to reduce costs,
storage/staging and trucks for deliveries, Issues and Challenges in Warehouse and
an increasing number of shippers are Yard Operations improve efficiency
examining the gaps in their warehouse Managers are running their materials and accuracy, and
operations and finding ways to better handling operations under decisive maintain and improve
utilize space, technology, and optimization constraints. Within the distribution centers customer service.
themselves, issues like capacity, space,
tools to work smarter, better, and faster.
inventory management, maintaining
We need to improve
With no end in sight to the rise in customer costs, having proper equipment to handle productivity of small
expectations, the need for optimized, required tasks, and managing labor all parcel processing.
efficient distribution centers will only play a critical role in operational efficiency. We also have to
increase exponentially. This, in turn, will In fact, many of the same complications better manage space
exacerbate the need for solid inventory similarly affect yard operations. As a
management techniques, better supply
utilization as some
result, managers are increasingly finding
chain visibility, and a more focused themselves working around hurdles like
facilities are near
approach on exactly how products get controlling costs, space confinement, poor capacity.”
from Point A to Point B. As one retail communication and ineffectual shipment ­—Logistics Operations
continuous improvement manager from tracking, and unproductive scheduling. Manager; Wholesale; $1B+
the retail sector commented in a recent
study conducted for Zebra Technologies More specifically, the managers we
Corporation by Peerless Research Group surveyed say that suitable use of warehouse “Our main concerns are
(PRG) on behalf of Modern Materials space and efficient utilization of warehouse cost control, increasing
Handling, “We continually look at all assets are their most pressing issues. production, and our
processes within the DC to see where Improvements Being Made in Warehouse e-commerce volume.”
improvements need to happen.” and Yard Management Operations ­—Warehouse Management;
For the study, 258 materials handling In many warehouses, the materials Retail; $1B+
executives having management or handling function could use both
purchase decision responsibilities for improvement and optimization. Many of “We are undergoing
the managers we surveyed, for example,
their warehouse, distribution center, or a conversion from
yard operations offered insights into the proclaim that their inbound, outbound,
and inventory processes are less than an operation that
gaps in their warehouse operations as well
efficient. In fact, roughly three out of four solely does live load
as how they are assessing, targeting, and
to an operation that is
Issues considered important in managing warehouse operations primarily using drop
Optimizing warehouse space 1% trailers.”
91% 8% ­—Corporate Management;
Food & Beverage; $1B+
Optimizing asset utilization 2%
84% 14% “We lack the capability
to generate reports
Having visibility from supply chain partners that would show
65% 22% 13% carrier performance,
such as late-for-
Providing visibility to supply chain partners appointments or total
56% 23% 21% time spent from dock
to gate.”
Highly important Somewhat important Unimportant —Director, Distribution
and Logistics; Food &
Base: 257; Source: Peerless Research Group (PRG)
Beverage; $1B+

2 • zebra.com Plans to Improve Warehouse Efficiencies


Zebra Technologies Research Brief
Plans to Improve Warehouse Efficiencies

contend processes in these disciplines and investment into improvements such


“Our major challenge
are either now or will soon be in need of as real-time visibility, storage and space is space. Because our
upgrading; and among these, one out of optimization, inventory management and warehouse is quite small,
ten feel processes are failing and need damage prevention, shipment tracking we very often have to
immediate improvements. WMS capabilities, employee performance devise ways in which to
and workforce coordination, and/or maximize space which
For most shippers, initiating and leveraging
improved communication methods.
improved warehouse and yard process
Combined, these various elements go a long
sometimes is at the
efficiencies are key focal points. To
way in helping to improve performance in expense of having less
achieve these and other related goals, essential products leave
both the warehouse and the yard.
many organizations are putting energy
our floor.”
Process efficiency for outbound, inbound, and inventory operations —Regional Manager,
Logistics; Non-
Outbound processes manufacturing; <$50M in
27% 64% 9% annual revenues

Inventory process “We’ve refined product


placement processes for
26% 62% 12%
ease of incoming and
Inbound process outbound, for inventory
21% 67% 12%
accuracy, and having
a better accounting of
“First-in First-out (FIFO).”
Highly efficient Somewhat efficient Not very/Not at all efficient
Satisfied with Process is functional, Process needs improvement —Consultant; $50M-$100M
current process but is or will soon be
in need of upgrading “We are upgrading our
Base: 207; Source: Peerless Research Group (PRG) real time visibility and
tracking of assets and
Areas in need of improvement and materials loaded in and
areas that are greatest cost to company outside of the yard. We
lack event tracking of
international shipments.”
—Warehouse, Distribution
Management; Chemicals; $1B+

“Our current yard system


is out of support. Priority
shipments need some
type of auto entry and exit
through the system.”
—Warehouse, Distribution
en ry

ng

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ng

at nt

Management; Retail; $1B+


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“We’re improving accuracy


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O

and improving tracking


rd
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Ya
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of products in the
Most in need of improvement Greatest cost to company warehouse.”
Base: 193; Source: Peerless Research Group (PRG)
—Company Management;
Furnishings; <$50M
3 • zebra.com Plans to Improve Warehouse Efficiencies
Zebra Technologies Research Brief
Plans to Improve Warehouse Efficiencies

In particular, the tasks that are ripe four operations in 2014, will become more “We are looking at
for improvement include inventory of a focal point in 2015. Complying with Kaizen and continuous
management, receiving, picking, and mandates and labor management will also improvement process
staging. Correspondingly, and not grow in importance to warehousing and to determine how
surprisingly, many of these activities DC operations in the near future. we can better utilize
are also identified as being the greatest
drains on warehouse and DC expenses
In assessing the main points of focus space, equipment and
and resources. In addition, the most costly
among today’s warehouse managers, it’s personnel.”
clear that widespread implementations of
functions to operate include shipping, —Distribution Manager;
mobile devices (i.e., smartphones, tablets,
inventory management, receiving, and Agriculture;
and label printers) are seen as the keys to
picking. $250M - $500M
better handling process change, upgrading
Warehouse and Yard Priorities worker efficiencies, and improving
Warehouse, DC, and yard managers are productivity both in the warehouse and
focused on lowering operating costs and in the yard. In return for their efforts,
improving customer service – issues that organizations are gaining from lower
are likely to persist as main priorities over operational costs, improved customer
the next few years. Increasing supply chain service, and better end-to-end supply
“We’re improving
visibility, a top issue for about one out of chain visibility.
our use of barcode
scanners to help
Main points of focus among warehouse managers automate the
receiving and tracking
83%
76% 2014 2015
of inventory.”
74%
—Sr. Quality Manager;
64% Aerospace; $500M - $1B
59% 56%

40% 42%
34%
28%

Lower Improve Increase supply Comply with Employee


operations cost customer service chain visibility mandates rotation
Base: 158/197; Source: Peerless Research Group (PRG)

4 • zebra.com Plans to Improve Warehouse Efficiencies


Zebra Technologies Research Brief
Plans to Improve Warehouse Efficiencies

“We continually look


Solutions implemented/plan to consider/invest during next few years
at all processes within
Process improvement
66% the DC to see where
67% improvements need to
21% happen.”
WMS upgrade or change
38% —Continuous
Improvement Manager;
42% Retail; NA
Implemented or upgraded label printers
35%

Worker empowerment 21%


with mobile computers 33%

Implemented or upgraded 27%


Asset Management System 33% “We’re going through
a modernization
50%
Implemented Wireless LAN
26%
upgrade—adding bar
codes and bar code
Implemented a WMS
24% scanners.”
22% Have in 2014
—Plant Management; Iron
Plan for/Invest in 2015 & Steel; $50M - $100M
18%
Implemented or upgraded YMS
18%

11%
Unsure
18% Base: 150/190; Source: Peerless Research Group (PRG)

Solutions and Technologies for Improving resource (both asset and employee) “We’re upgrading and
Warehouse and Yard Operations management. With the right combination integrating our WMS
Today’s supply chain managers of technology, processes, and procedures, system with our SAP
increasingly see mobility as an enabler organizations will be well equipped to tackle
of their overall business goals and
system.”
the challenges being put in front of them
objectives. In addition to desktop PCs, today, plus any future hurdles that may Manager, Operational
the technologies used most commonly stand in the way of success. Excellence; Retail; $1B+
in materials handling environments are
barcode scanners, thermal printers, and
mobile solutions. Looking to the future, Conclusions
warehouse managers are particularly
interested in implementing mobile Trends and realities continuously challenge
technologies, barcode scanners, thermal warehouse operators, emanating the
printers, and PCs. pressures to operate efficiently and deliver
optimal service levels – investment in
Seeing mobility as a chief business enabler, robust warehouse management platforms
and in an effort to improve warehouse and related technologies is a must in 2015.
and yard efficiencies, organizations are Add omni-channel retailing strategies,
most likely to invest in WMS upgrades, more discerning customers, and the need
mobile solutions, label printers, process to replace aging equipment and platforms
improvement applications, and asset to the mix, and it’s clear that warehouse
management systems over the next one and DC managers really do have their
to two years. In fact, the largest increases work cut out for them. As they tackle the
in investments from 2014-2015 align with challenges discussed and highlighted in
the typical organization’s goal of lowering the Zebra Technologies Corporation study,
costs, improving processes, and improving one by one, shippers will be able to better

5 • zebra.com Plans to Improve Warehouse Efficiencies


Zebra Technologies Research Brief

Plans to Improve Warehouse Efficiencies

position themselves for


success in the changing Technologies currently in use/planned
environment. for purchase for use in warehouses
Desktop computers 87%
Research Methodology 39%
This research was
Barcode scanners/ 66%
conducted by Peerless Imagers 59%
Research Group (PRG)
Thermal printers 66%
on behalf of Modern 33%
Materials Handling (MMH)
Mobile solutions 53%
for Zebra Technologies 59%
Corporation. The study 36%
was executed in December Printer applicators
22%
2014, and administered 32%
over the Internet among Non-thermal printers
18%
subscribers to MMH. 27%
Automated systems
Respondents were pre- 21%
screened for being involved 25% In use
RFID
in decisions pertaining to 23% Plan to purchase/Invest in
their company’s warehouse, Internet of Things/ 11%
distribution center, or yard Machine-to-machine 11%
management operations. 8%
Condition sensors
7%
The findings in this brief
are based on information Voice picking 8%
6%
collected from 258 materials
handling professionals. Other 7%
9% Base: 254/219; Source: Peerless Research Group (PRG)
Respondents’ job functions
are predominantly
Warehouse Management visibility into their businesses by giving
(42%), Corporate Management (29%), and physical things a digital voice.
Plant Management (13%). Zebra’s extensive portfolio of solutions give
A range of manufacturing industries you real-time visibility into everything from
and non-manufacturing businesses are products and physical assets to people,
represented. Manufacturing businesses providing you with very precise operational
include food and beverage, automotive data not only about where things are, but
and transportation, pharmaceuticals, what condition they are in. This allows
etc. Non-manufacturing companies are business leaders to use data to make better,
mostly wholesale and retail trade, and more informed decisions, respond in
transportation and warehousing services. real-time and ultimately, help businesses
The research also encompasses a breadth understand how they work, and how they
of company sizes: 43% report their 2014 could work better.
revenues were under $50 million, 28% work
at businesses with revenues between $50 Contact Information:
million - $500 million, and 29% had sales of For more information on Zebra
$500 million or more in 2014. Technologies, their solutions, and
how Zebra can help you improve your
About Zebra Technologies Corporation warehouse and yard efficiencies, please
Zebra builds tracking technology and contact:
solutions that generate an enormous Juan Carlos Garcia
amount of actionable information and Zebra Technologies
insight, giving companies unprecedented JGarcia@zebra.com