According to ECON 101 diagrams, factories and warehouses resemble nothing more than waystations on a linear supply chain from raw material to consumer. Today, however, with exponential growth in multichannel retailing, unpredictable global production and transport, and growing labor shortages, these static whistle stops have become dynamic nodes in an ever-more complex web of relationships within and beyond the organization.
Reining in this complexity, maintaining efficiency, delivering the “need-it-now” experience customers expect—all of this requires transformative technology. So what will the factories and warehouses of the future look like? Who will work in them? What skills will be needed to manage them? Where will they be located?
Here’s where the trends are headed:
As manufacturers shift from sending pallets of products to stores to sending individual items to customers’ homes, many retailers and manufacturers are creating a network of smaller delivery depots—including “pop-up” warehouses and retail stores—to shorten the distance at the last mile. These smaller, highly flexible warehouses require smart, AI-powered demand forecasting, including seasonal and regional preferences. The better the forecast, the greater the likelihood a specific item will be available for immediate local delivery. They also need a solution that can be deployed seamlessly and rapidly over and over as needed without missing a beat.
The factory and warehouse of the future will not only be smarter, but they’ll also be more automated. Imagine drones zipping up and down aisles making live inventory counts in hours rather than days, or machines reporting a decrease in throughput or scheduling preemptive repairs. With less rote work, employees will become more engaged, while inaccuracies and human error will decline. Warehouse management systems can adjust site layout to maximize efficiency.
As information technology, AI, IoT, and robotics play a larger role in warehouses and factories, there will be less emphasis on physical labor and more on the analytical. Factory and warehouse workers skilled at multitasking and decision-making will be in increased demand, as dashboards feed them information about machine health, supply availability, and demand signals.
When a job requirement no longer includes the ability to lift a 50-pound object, for example, the talent pool increases. There are more opportunities for people with disabilities, women, and non-English-speaking workers. In addition, manufacturers and retailers will need to increase recruiting efforts among nontraditional workers who need greater scheduling flexibility. Technology, such as augmented reality (AR), could make onboarding and training faster and easier for part-time or gig employees, while AI can give workers greater autonomy by helping with decision making.
The warehouse and factory of the future will be hyper-connected along the supply chain, upstream as well as down. Supply chain management systems will draw demand and supply information not only from internal systems, but also from suppliers, retail outlets, and e-commerce sites. The global pandemic exposed the weaknesses of “just-in-time” manufacturing, which emphasized efficiency over resilience. The factories and warehouses of the future will need to consider both factors, automatically increasing or reducing inventory based on multiple signals up and down the supply chain.
The most effective supply chains are those that remain invisible to your end customers, who should only see their product arrive when, where, and how they want to receive it. As supply chains become increasingly complex and uncertain, and as distribution channels proliferate, managing this complexity becomes more difficult. An end-to-end ERP system with manufacturing, transportation, and warehouse management components provide visibility into the logistics necessary to keep merchandise moving and customers happy.
Terri Hiskey is the vice president of SCM and manufacturing product marketing for Oracle, leading the strategic development and execution of supply chain and manufacturing-focused content, programs, and assets. She came to Oracle from Epicor, a global provider of ERP solutions for small and midsize manufacturers and distributors, where she led the manufacturing product marketing team. Previous to that, Terri spent nearly a decade leading various SCM product marketing efforts to promote Oracle’s product lifecycle management, manufacturing, maintenance, and order management solutions. Terri has more than twenty years of technology marketing experience focused primarily on helping customers efficiently design, build, and service innovative products for the right markets at the right time. Based in Austin, Texas, she holds a BA from The George Washington University and an MA from Suffolk University.