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Warehouses lack agility necessary to respond to unplanned disruptions and are paying a high cost as a result, according to market study from Lucas Systems, a distribution center technology company.
“Unplanned warehouse disruptions are on the rise since the COVID pandemic,” noted Ken Ramoutar, chief marketing officer of Lucas Systems. “If your automation can’t quickly adapt to in-the-moment shifts, then your warehouses are at a real disadvantage.”
Founded in 1998, Lucas Systems said it harnesses the power of data with artificial intelligence, machine learning, speech recognition, and optimization models to drive operational agility and improved distribution center performance. The company, which has offices in Wexford, Pa., and Bracknell, U.K., provides software to workers in more than 400 warehouses worldwide.
Supply chain disruptions aren’t slowing down
Lucas Systems conducted the statistically significant study in partnership with Wakefield Research. They polled 114 U.S.-based supply chain executives to examine the nature of their automation adaptability.
Disruptions such as system downtime, equipment failure, labor shortages, tariffs, and unexpected demand spikes can paralyze a warehouse. The rate of these disruptions does not appear to be slowing down, said Lucas Systems.
The study found that 85% of respondents experienced up to 10 significant, unplanned disruptions in just the past year. And another 7% experienced more than 10 of these disruptions. About 51% of the study’s respondents reported more unplanned operational disruptions than three years ago in the aftermath of COVID.
Automation can provide agility, says Lucas Systems
According to the study, more than half (51%) of U.S. supply chain executives said their automation systems are unprepared to deal with today’s unforeseen changes, new requirements, and disruptions. In terms of flexibility, 77% of respondents acknowledged that at least half of their hardware or software systems are too rigid to respond well to unplanned disruptions.
Supply chain executives are paying the price for lack of agility. About 60% of those who reported rigidity said they’ve incurred 11% to 25% additional operating costs or losses from lack of automation adaptability when dealing with disruptions or new requirements.
The market study did find growing recognition of the possibility for robotics and software to add resilience:
- 86% of supply chain executives said adaptable warehouse tech is critical.
- 72% of those surveyed said it would take considerable effort to reconfigure their automation in response to disruption.
- More than 1 in 4 (26%) of survey respondents said adaptable automation helped reduce their operational costs by more than 25%.
Ramoutar said challenges such as the pandemic heightened awareness about the need for adaptability, but many distribution centers still haven’t deployed self-optimizing automation.