Skip directly to search

Skip directly to content

 

Top Challenges in Warehouse and Distribution Centers

 
 

Transportation & Logistics Insights | Brian Estep |
01 March 2022

This Transportation & Logistics (T&L) Insights series is based on research by Levvel, who joined the Endava family in 2021. The team surveyed over 500 US-based companies who procure transportation and logistics services internally and externally to get their views on their challenges, needs, and use of digital technology solutions.

While companies often perceive technology innovation to mean things like high-end robotics, artificial intelligence, and fully autonomous vehicles, there are many elements in the supply chain that can be modernized without requiring great effort or cost, while still providing the competitive edge T&L companies are looking for. In this series, we will present current industry challenges and how digital technology can help reduce friction, enhance efficiency, and provide a better experience for businesses and their customers.

CURRENT CHALLENGES OF WAREHOUSE AND DISTRIBUTION CENTERS

Warehouses and distribution centers (DCs) are facing unprecedented challenges as a result of the pandemic. Meanwhile, consumer demand is growing thanks to e-commerce, leading to backlogs and delays that affect a company’s bottom line. But these challenges can be mitigated by using modern technology, and these initiatives don’t have to be very expensive or extensive to give a company the upper hand.

According to our survey, the top challenges which warehousing and distribution centers have to hurdle involve:

  • Finding and retaining talent
  • Demand forecasting
  • Inventory management
  • Fixed overhead costs
  • Operator utilization
  • Efficiency
  • Item damaging
  • Productivity


The biggest challenge involves human capital and retaining staff in an industry where lateral moves are common as workers search for better conditions. As e-commerce grows and more efficiency is expected along the supply chain, it can be difficult to provide a good environment for employees without help from automation. Without automation, the need for human labor only grows.

The second biggest challenge involves inventory, that is, when it’s received, how it’s stored, and how long it takes to ship it back out. When inventory sits in a warehouse too long, it loses value and has a higher risk of becoming spoiled or damaged. Equally, if there is a low turnover rate in a warehouse or DC, inventory management becomes much harder, especially if there’s no digital system in place to track what’s being stored, where it’s located, and when it arrived.

Our research found that the challenges faced by both management and employees decreased as automation increased. For example, workers become more productive and inventory management more efficient.

So, what’s holding companies back from implementing automation solutions?

WHY WAREHOUSES ARE HAVING CHALLENGES

The need for skilled workers and presumed high overhead costs for implementing digital and physical automation are two of the main reasons why companies balk at investing in new technology.

However, financial investment doesn’t need to be great to achieve beneficial effects. Even modest improvements, such as implementing electronic Bills of Lading or driver-warehouse communication, can improve efficiency and reduce strain on workers.

While 35% of companies use digital technology such as mobile scanning devices, only 17% use the next most popular automation solution: digital bar codes and radio frequency identification (RFID). There’s clearly room for improvement, even for relatively simple upgrades.

AUTOMATION AS A SOLUTION

Automation won’t look the same for every warehouse or distribution center. Each facility will have to assess its own needs and pain points and decide if digital automation, such as tracking software, or physical automation, like autonomous mobile robots, is right for them.

Initial automation investments can be small and still pay off in big ways. Even mobile scanning devices to automate inventory can help reduce labor costs, operational costs, and human error while improving customer service, employee satisfaction, and order accuracy.

Read our other Transportation & Logistics Insights articles to learn more about how technology can help alleviate industry challenges.

Brian Estep

EVP North America & Global TMTR Lead

Brian is one of the founders of Velocity Partners. Following their merger with Endava in 2018, he took on the role of Head of Sales, TMTR. With extensive experience in technology, starting in 2000, and a bachelor’s degree in computer science, Brian has deep knowledge of software systems and lean/agile processes, which allows him to truly understand the needs of customers and design the best solutions for them alongside his team.

 

Related Articles

  • 17 May 2022

    Advantages of a Yard Management System

  • 19 April 2022

    Digital Automation in the T&L Industry

  • 05 April 2022

    Modernizing the Shipping and Cargo Process

  • 22 March 2022

    Current Challenges in the Transportation & Logistics Industry

  • 08 March 2022

    How to Digitize Warehouses and Distribution Centers

 

From This Author

  • 09 August 2022

    hi, I’m Brian Estep

  • 14 June 2022

    The Future of Supply Chain: What’s Next?

  • 31 May 2022

    The Future of Autonomous Vehicles in T&L

Most Popular Articles

Current Challenges in the Transportation & Logistics Industry
 

Transportation & Logistics Insights | Brian Estep | 22 March 2022

Current Challenges in the Transportation & Logistics Industry

AI Art in Game Production – an XDS 2022 Table Discussion
 

AI | Thomas Bedenk | 27 September 2022

AI Art in Game Production – an XDS 2022 Table Discussion

4 Buy Now Pay Later Trends Set to Disrupt the Industry
 

Payments | Annmarie Mahabir | 22 February 2022

4 Buy Now Pay Later Trends Set to Disrupt the Industry

Payments Data Monetisation is Key to Driving Sustainable Growth
 

Payments | Annmarie Mahabir | 20 September 2022

Payments Data Monetisation is Key to Driving Sustainable Growth

Buy or Build? A Game-Changing Question in Insurance
 

Next Gen Insights | Robert Anderson | 12 January 2022

Buy or Build? A Game-Changing Question in Insurance

The New Ways of Issuing Cards
 

Payments | Peter Theunis | 19 July 2022

The New Ways of Issuing Cards

The Metaverse Evolution and Learning from the Games Industry
 

Next Gen Insights | Thomas Bedenk | 30 March 2022

The Metaverse Evolution and Learning from the Games Industry

Top Challenges in Warehouse and Distribution Centers
 

Transportation & Logistics Insights | Brian Estep | 01 March 2022

Top Challenges in Warehouse and Distribution Centers

Buy Now Pay Later: Will Regulation Burst the Bubble?
 

Payments | Annmarie Mahabir | 01 February 2022

Buy Now Pay Later: Will Regulation Burst the Bubble?

 

Archive

  • 27 September 2022

    AI Art in Game Production – an XDS 2022 Table Discussion

  • 20 September 2022

    Payments Data Monetisation is Key to Driving Sustainable Growth

  • 13 September 2022

    Navigating the Healthcare Ecosystem

  • 30 August 2022

    hey y’all! I’m Ashley Grant

  • 23 August 2022

    5 Ways to Fix Your Data Spine in Banking

  • 16 August 2022

    De-risking Digitalisation

  • 09 August 2022

    hi, I’m Brian Estep

  • 02 August 2022

    hey! I’m Lia Rollman

  • 19 July 2022

    The New Ways of Issuing Cards

  • 12 July 2022

    Scores on the Door: Rating Autonomous Vehicles

  • 06 July 2022

    Data-Driven Impact: Don’t Settle for Less

  • 06 July 2022

    We’re in Nottingham – a Q&A on Endava’s New Delivery Centre in the UK

  • 05 July 2022

    hey, I’m Chris Hart

  • 28 June 2022

    Platforms: a Blessing or a Curse?

  • 23 June 2022

    A Payments View on Marketplaces – How to Be(come) Successful

  • 21 June 2022

    Intelligent Commercial Underwriting

  • 14 June 2022

    The Future of Supply Chain: What’s Next?

  • 31 May 2022

    The Future of Autonomous Vehicles in T&L

  • 26 May 2022

    hello! I’m Hannah McCarthy

  • 24 May 2022

    Going Native: Why Cloud-Native Services are Essential

  • 19 May 2022

    How to Tackle Legacy – Breaking Down Walls Between Change and Run

  • 17 May 2022

    Advantages of a Yard Management System

  • 12 May 2022

    Are Phones About to Become the New POS Terminals?

  • 10 May 2022

    The Digital Economy is an Upgrade of Smart Cities and Communities

  • 05 May 2022

    hello! I’m Sumita Davé

  • 03 May 2022

    Physical Automation in the T&L Industry

  • 28 April 2022

    zdravo! I’m Andrej Kotar

  • 26 April 2022

    Open Banking in the US

  • 20 April 2022

    hello! I’m Paul Maguire

  • 19 April 2022

    Digital Automation in the T&L Industry

  • 12 April 2022

    How Do Banks Embrace Embedded Finance – Have the Fintechs Already Won?

  • 06 April 2022

    ESG Data Architecture is a Business Imperative – How to Get Started

  • 05 April 2022

    hi! I am Roy Murphy

  • 05 April 2022

    Modernizing the Shipping and Cargo Process

  • 30 March 2022

    The Metaverse Evolution and Learning from the Games Industry

  • 29 March 2022

    Do Androids Dream of Trading Electric Sheep for Digital Wood? An Introduction to Automated Game Design

  • 23 March 2022

    Real-Time Payments in Australia – Why Corporates Should Get on Board

  • 22 March 2022

    Current Challenges in the Transportation & Logistics Industry

  • 16 March 2022

    bok! I’m Sanja Cvetkovic

  • 15 March 2022

    Rapidly Transforming: Healthtech Trends in 2022

  • 08 March 2022

    How to Digitize Warehouses and Distribution Centers

  • 01 March 2022

    Top Challenges in Warehouse and Distribution Centers

  • 28 February 2022

    Tackling CIB Legacy at its Core

  • 23 February 2022

    salut! I am Isabela Buhai

  • 22 February 2022

    4 Buy Now Pay Later Trends Set to Disrupt the Industry

  • 15 February 2022

    salut! I’m Natalia Ciobanu

  • 14 February 2022

    Product-Led Innovation – a Q&A with Joe Dunleavy

  • 01 February 2022

    Buy Now Pay Later: Will Regulation Burst the Bubble?

  • 31 January 2022

    Innovation Will Spur Ireland’s Race to the Top

  • 28 January 2022

    The Value of Digital and Automation in the Product Returns Process

  • 26 January 2022

    Virtually Disrupted? Keeping Pace with Accelerating Customer Expectations

  • 19 January 2022

    The 3 Big Ps in Modern Insurance: Personalisation, Prediction and Prevention

  • 18 January 2022

    An Introduction to Mobility as a Service in the US

  • 12 January 2022

    Buy or Build? A Game-Changing Question in Insurance

  • 12 January 2022

    hello! I’m Paul Willoughby

  • 11 January 2022

    Payment Service Providers 2.0

  • $name

We are listening

How would you rate your experience with Endava so far?

We would appreciate talking to you about your feedback. Could you share with us your contact details?