USTGlobal ®

INNOVATION INFORMATION TECHNOLOGY

Next-Gen Warehousingin Omni Channel Age

Subhodip “Subho” Bandyopadhyay & Cynthia Leimbach

UST GLOBAL | Next-Gen Warehousing in Omni Channel Age 1

Table of Contents

Section OneKey Factors Driving Next-Gen Warehousing

Section TwoImplications of the New Business Model

Section FourThe Solution

Introduction

Section ThreeCritical Aspects of Warehouse Function and Design

1

2

3

3

6

UST GLOBAL | Next-Gen Warehousing in Omni Channel Age 2

Introduction

The evolution of e-Commerce in the retail

Omni Channel age, requires a viable

solution to meet the immediate challenges

facing Next-Gen Warehousing. In order to

improve customer service expectations

while managing cost structure, today’s

e-Commerce retailers must possess

vigorous insight and comprehensive data

to emerge as leaders. By identifying the

needs, understanding the implications, and

generating protocol designed to increase

labor productivity while reducing modern

warehouse costs – our vanguard Next-Gen

Warehousing approach utilizes cutting

edge technology, such as AI, to provide

solutions for our global partners.

As e-Commerce growth accelerates, so

does our enthusiasm. We observe

innovative applications at their finest with

the integration of a new age business

model that merges online orders with

massive automation generating

unparalleled back end efficiency. To

appreciate these advances requires

understanding the growth of e-Commerce

and how this entails an increase in cost

while labor productivity declines and the

inevitable proliferation of SKU’s. Our

findings address these matters and allows

for the demands of Millennials to be met

while elevating the environmental effects

of contemporary warehousing.

The collective summation of three key

components, Right Automation, Labor

Productivity, and Throughput

Improvement, collectively contribute to

In this paper, Next Gen Warehousing will

be explored in the terms of the following

key attributes of which include; warehouse

design and automation, labor productivity

and picking accuracy, returns

management and inventory visibility,

endless aisle impact and flow through,

food safety, and optimization of human

resources. By the way of collectively

addressing and improving modern

warehouse design from A to Z . . . Quality

and innovation are paramount features

required by e-Commerce retailers who

recognize the importance of meeting

future supply demands. This discussion

seeks to elucidate knowledgeable industry

experts on new best practice models vital

to future successes.

Section One

Key Factors Driving Next-GenWarehousing:

UST GLOBAL | Next-Gen Warehousing in Omni Channel Age 3

to the vital evolution of warehousing.

Within the world of warehousing, network

planning is vital and best practice models

Right Automation requires decision

support for right automation (ASRS,

Robotics, and Low Cast Automation),

imperative to improve functionalities

applicable to warehouse design. Equally

important, is the Warehouse command

center which houses real time visibility of

warehouse operations while possessing

the capacity to provide quality check

automation and cold chain contributions.

The result of this approach is that Labor

Productivity, can then be divided into four

sub-segments: Labor forecasting, Data

capture at source, such as RFID, Scanners,

Cameras, Beacons and Biometrics. In

addition, Palletization and basic warehouse

operation analytics allow for the

incorporation of optimal technological

advances, which are all enhanced by the

aforementioned. And finally, Throughput

Improvement completes section one

through use of Picking and putting away

design optimization & Warehouse layout

design – Racking system design, Inventory

accuracy and Omni channel process

design. The result of these

categories- simultaneous improvement, is

the Next-Gen Warehouse model being the

efficient and futuristic answer to the

modern warehouse experience.

Omni channel commerce is no longer the

innovation, rather, it is the norm. As such,

Millennials are driving competition

between Amazon and the rest of the world

leading to stringent delivery timelines for

meeting online orders. Thus, massive

automation is emerging as the innovative

new way of optimizing warehouse

efficiency – while ultimately increasing

pressure on reducing back end and

warehousing costs. The implications of

Next-Gen Warehousing will redefine

e-Commerce industry. Given the affects

proper warehousing requires, vast

attributes are required to achieve optimal

technical functionality. By introducing and

observing interactions within the following

categories, optimal affects may be formally

recognized.

Section Two

Implications of the New Business Model:

Section Three

Warehouse Design:

UST GLOBAL | Next-Gen Warehousing in Omni Channel Age 4

demonstrate that planners must bear in

mind the complex Omni channel

movement requirements of 24 x 7 to create

minimal structure with maximum efficiency.

For example, by executing the proper

degree of right automation without

impacting merchandise flow becomes key.

Moreover, with the deployment of

advanced robotics and 100% completely

automating warehouse floors, retailers

increase production with minimal human

intervention in terms of inward goods, put

away, and picking and sorting.

(See figure 1) A key factor retailer’s face is return

management. The industry estimate within

e-Commerce suggests 24% in the US

alone; that is 262 billion items being

returned for a variety of reasons.

Obviously, this leads to massive

challenges in warehousing space and

design. Many warehouses are ill equipped

to navigate this task and therefore

contribute towards high risk to the

manufacturers and unacceptable

turnaround times for consumers. Thus, the

benefits of a streamlined Next-Gen

Warehouse increase exponentially as they

solve all current categorical challenges

facing brands.

projected to increase by at least 5-10%.

Meanwhile, according to the 2015 US

Labor Census, actual labor productivity

decreased steadily declined by over 4.4%.

A variety of factors contributing towards

this decline range from a lack of training

leading to poor productivity, picking

inaccuracy, and even high BMI index.

Complicated by the lack of accuracy of

picking – AI easily becomes the optimal

choice.

Return Management:

Another interesting component of today’s

The Impact of Endless Aisle &Inventory Visibility:

The single largest item on expenses at

55%, is that of labor employees and is

Labor Productivity:

Figure 1: Advanced Robotics - AI

UST GLOBAL | Next-Gen Warehousing in Omni Channel Age 5

effective warehouse applies an “endless

aisle” concept to ensure clear inventory

visibility (See figures 2 & 3). The advantage

of which allows multiple order channels to

be executed efficiently, despite a lack of

real time visibility. By streamlining IT

systems, we remove the pressures upon

human systems responsible for ensuring a

100% fill rate on e-Commerce items – an

otherwise impossible task that leads to

wrong picking, packing, and pilferage. With

this information, Next-Gen Warehousing is

poised to reduce multi-million dollar risks

as they increase international margins.

The ability to accurately monitor necessary

temperature control while providing safety

to consumers has always been

problematic at best. However, our future

forward warehouse concepts have

produced solutions that not only improve

warehouse flow, but answer some of the

largest concerns facing food transports

companies. With the development of

cutting edge temperature tracking

systems inserted into trucks – we are now

able to safely monitor cargo of

warehouses and trucks alike, eliminating

the risks associated with handling food

safety correctly. Thereby eliminating

compliance issues of warehouse operators

and reducing liability for corporations.

Food Safety:

Figure 2: Endless Aisle Concept

Figure 3: Pick to Light

The ability to analyze the productivity of warehouses built to meet modern demands has

arrived. The tools like Virtue Sense which monitors worker productivity at granular level

gives complete control and visibility to the warehouse manager to train, re-train workforce

more effectively and bring transparency in worker productivity linked wages.

Again, we see significant use case using VR devices for warehouse pick. Combination of all

these efforts, will lead to significant changes the way warehouses are managed and

operated in near future.

Section Four

The Solution:

UST GLOBAL | Next-Gen Warehousing in Omni Channel Age 6

The next couple of years will revolutionize retail through e-Commerce with an accelerated

adoption of technology across the board. The implementation of which will bring about an

end of warehousing as we know it – by reducing the roles humans previously held.

Moreover, with AI being implemented, improving both consumer experiences and

manufacturer’s alike – the costs of traditional labor cannot compete with modern

automated warehouses designed to provide frontline e-Commerce exposure.

Human Resource:

ABOUT UST GLOBAL

UST Global is a digital technology services company that provides next

generation digital solutions for Global 1000 companies. Our mission is to

‘Transform Lives’ using the power of digital technologies and the focus is

on digital services and solutions. With a business model of ‘fewer CLIENTS,

more ATTENTION’, UST Global strives for excellence in providing our

clients with the best service and commitment to long-term client success.

Headquartered in Aliso Viejo, California, UST Global has over 17,000

associates operating in 25 countries across four continents. For more

information please visit www.ust-global.com

Corporate OfficeUST Global®, 5 Polaris Way, Second Floor, Aliso Viejo, CA 92656

Tel: (949) 716-8757 Fax: (949) 716-8396www.ust-global.com

For further information contact: Subhodip.Bandyopadhyay@ust-global.com

/USTGlobal /USTGlobal /ustglobalweb /company/ust-global

Copyright © 2017 UST Global, All rights reserved.

USTGlobal ®

INNOVATION INFORMATION TECHNOLOGY