Core Trends Affecting Warehouse Operations in 2023 And How You Should Adapt

The warehouse industry continues to reel from the impact of the COVID-19 pandemic, with strained supply chains directly affecting businesses’ abilities to manage logistics. However, this hasn’t stopped the industry from growing, with figures showing a 5.2 percent growth in market size in the U.S. alone.

As the modern warehouse sector moves forward, savvy businesses have identified developments to usher them past the competition. Indeed, these trends significantly impact businesses, with various technological advancements and geopolitical happenings leaving their mark.

Read on to learn the most impactful trends affecting warehouse operations and how your business can take advantage.

Key trends shaping warehouse operations in 2023

As the supply chain and logistics space self-rights in the aftermath of the pandemic, clear patterns are taking shape, driving business growth and resilience to intense market pressure.

Here are the core trends businesses look to adopt in 2023:

●    Increased adoption of warehouse automation tech

Conventional warehouse operations comprise several repetitive tasks requiring significant human input. However, in the increasingly competitive world, businesses lose considerable time with manual warehouse operations.

Forward-looking business decision-makers have adopted various automation technologies to cut out manual operations in the warehouse. Indeed, more businesses look to adopt and implement artificial intelligence (AI), machine learning (ML) and the Internet of Things (IoT).

Warehouse operations applications infused with this tech promote increased efficiency and lower running costs. These applications include automated guided vehicles (AGV), autonomous mobile robots (AMR), warehouse drones and advanced conveyor systems.

●    Investment in and implementation of more advanced cybersecurity

Leveraging automated technologies for warehouse operations provides several advantages for your business. However, hooking the warehouse onto the internet creates several opportunities for bad actors to access your system.

Therefore, the warehouse sector looks set to increase investment in advanced cybersecurity approaches to safeguard warehouse physical and digital assets. After all, cybercriminals can take advantage of a seemingly negligible part of your supply chain to gain access to other parts of the business.

●    More businesses will adopt on-demand warehousing

The suddenness of the pandemic affected several supply chain and logistics operations, making warehouse management more challenging for businesses. As a result, many companies are looking to futureproof their logistics operations by adopting on-demand warehousing.

Instead of setting up permanent warehouse structures or partnering with third-party logistics (3PL) partners, many businesses are opting for flexibility.

The on-demand approach allows businesses to access warehouse services only when needed. In other words, companies can reduce costs by leveraging these services to avoid the more permanent and costlier conventional 3PL.

Not only does on-demand warehousing help businesses deal with inventory fluctuation, but it also provides more scalability. As such, organizations can quickly adapt to ever-increasing customer demands and expectations through optimized order fulfillment.

●    Continued geopolitical influences on the industry

The political tensions between the United States and China – revved up during the latter years of the Trump presidency – continue to linger, affecting global supply chains. After all, the sanctions placed on China affect logistics and warehousing operations across various industries.

In addition, China’s regional political disputes with Taiwan have significantly disrupted the semiconductor manufacturing sector. As a result, and with no apparent solution on the horizon, companies with China-associated business dealings must keep an eye on political developments in the area.

In another instance, the protracted invasion of Ukraine forced several governments in the West to issue trade sanctions against Russia. These embargoes have left lasting effects on the international supply chain.

Furthermore, many businesses in Europe and the United Kingdom still feel the lingering effects of Brexit. As such, companies are more intentional with their international dealings to avoid potential supply chain, logistics and warehousing interruptions.

●    Green warehousing becomes more mainstream

Evolving consumer demands are centered on sustainability, forcing companies to devise ways of meeting these expectations. For instance, clients expect businesses to use sustainable packaging, reduce waste, and adhere to ethical working principles.

Businesses looking to remain competitive in 2023 have implemented green warehousing to satisfy customers and protect the environment. This kind of warehousing involves using green building practices and energy-efficient systems like solar panels.

Furthermore, regulatory agencies are leaning towards the green revolution, issuing eco-friendly guidelines for businesses to adhere to. As such, companies will invest more in adopting green warehousing practices to stay on the right side of these government entities.

How should you adapt to these trends?

As discussed earlier, the ever-changing business landscape has forced companies to adapt to the prevailing market forces. As such, many businesses are leveraging various solutions to ensure competitiveness in the coming calendar year.

You can use these various approaches to optimize their processes, resulting in warehouse operations' best practices.

Here’s how you can engage these trends to adapt to the dynamic business environment.

●     Embrace AI applications: Artificial intelligence applications optimize warehouse management, making various operations less challenging. Using AI-enabled warehouse management software promotes the automation of processes like sorting. Automated sortation systems utilize AI to identify items and optimize delivery to the required station quickly.

For instance, Powerhouse AI increases speed, data gathering and accuracy by utilizing artificial intelligence for recognizing, counting and administering inbound items using a smartphone.

●     Open up to the Internet of Things: Introducing IoT-enabled devices in the warehouse offers visibility into operations. These devices communicate with each other, providing data from all areas of the warehouse.

Analyzing this data with AI-enabled digital solutions provides insights into the inner workings of the warehouse. Managers and executives leverage these insights to make better decisions for optimal warehouse operations.

Furthermore, these warehouse-specific insights can inform other aspects of your business, like inventory management and forecasting.

●     Practice comprehensive IT security: Because warehouse operations have several potential failure points, your business should have a comprehensive cybersecurity policy. For instance, back up vital data and install robust firewalls, antiviruses and anti-ransomware.

Additionally, you must have a well-orchestrated cybersecurity event response plan. This allows you to manage warehouse operations properly without exposing more vital business data.

It’s also imperative to continuously update your cyber protection protocols. After all, bad actors will continue devising more effective hacking methods.

●     Nearshoring: As a business, you must comply with government-issued sanctions to sustain your business. However, cutting ties with partners in shunned locations requires your business to shift operations closer to home – a move termed nearshoring.

While it might be relatively more expensive in the short run, bringing warehouse operations closer allows for more comprehensive management and implementation of other beneficial approaches. As a result, your business will become more competitive in 2023 without navigating complex geopolitical fields.

●     Adopt an eco-friendly warehouse management model: As more people become more environmentally conscious, they expect businesses they interact with to follow the same sustainability values. For instance, embracing automation reduces your organization’s carbon footprint by eliminating paper-based warehouse management tasks.

Furthermore, using green building materials like adobe bricks for warehouse construction puts your brand in good stead with consumers. The same applies to using green energy sources like solar to power the facility.

Outlook 2023

The pandemic and political pressures have set the warehouse sector in a complex direction requiring significant changes in how to conduct business. As such, warehouse operations' best practices continue evolving to ensure business success.

As discussed earlier, savvy businesses must adopt further automation and digitization through artificial intelligence alongside other measures. Explore our AI-enabled product and sign up for a chat!

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