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First Step into the Future Warehouse

First Step into the Future Warehouse


Interview with Stuart Scott, Solutions Marketing Lead (APAC), Zebra Technologies

When one thinks of a typical warehouse, one rarely associates it with being modernised, even in this day and age of virtual reality and robotics technology. But that looks set to change. Zebra’s recent Warehouse 2020 APAC Vision Study, which surveyed more than 1,000 professionals in the warehousing field, saw respondents singling out Internet of Things (IoT) when it comes to technologies in which warehouse professionals are most interested.

“IoT is definitely making a significant impact on the market. IoT is especially important for the supply chain industry, where it is making a major impact on things like inventory accuracy,” said Mr Stuart Scott, Solutions Marketing Lead (APAC), Zebra Technologies. With over 25 years’ experience in automatic identification and communication technologies including mobile computing, BYOD, wireless networks, data capture, RFID and the IoT, Mr Scott brings market know-how of how technologies can be applied to help businesses reduce cost, improve efficiency, increase market share and improve customer satisfaction.

In this issue of Supply Chain Asia magazine, Mr Scott gave his insights on the transforming warehousing landscape of the Asia Pacific region based on Zebra’s Warehouse 2020 APAC Vision Study.

Can you share with us more about your background prior to your current role at Zebra Technologies?

I have over 25 years of experience in the field of automatic identification and communication (AIDC). Prior to Zebra, I was leading the Enterprise Mobility and Solutions Marketing team at Motorola Solutions in the APAC region. I joined Zebra Technologies as part of Zebra’s acquisition of Motorola Solutions’ Enterprise business two years ago.

With more than 25 years’ of industry experience under your belt, what would you say is the single most significant technology advancement that you’ve seen in the market?

For me, the IoT is definitely making a significant impact on the market. It continues to enable companies the access to unprecedented amounts of data, insights and visibility on many aspects of their business, such as processes, assets, personnel, and more. Technology solutions in the category known as Enterprise Asset Intelligence (EAI) can help them make real-time business decisions that directly impact their bottom line. IoT is especially important for the supply chain industry, where it is making a major impact on things like inventory accuracy. It is no surprise that IoT ranked top in the study when it comes to technologies in which warehouse professionals are most interested.

In your opinion, what are the key challenges in setting up and operating a fully automated warehouse in ASEAN?

There are two key challenges in this regard. First, many business owners feel that the cost of setting up such a warehouse would be prohibitive, especially in Asia where labour cost in many Southeast Asia countries is relatively lower than in more developed economies. That said, business leaders are coming to realise that the benefits afforded by intelligent investment and infrastructure will actually result in lower costs in the long run. For example, the Zebra Warehouse 2020 APAC Vision Study shows that the need for lower transportation costs is the biggest factor that is driving warehouse investments, with half of all respondents picking it as a reason for such investments.

Based on the vision study, another top factor driving warehouse investments is the shortage of relevant talent and skills. Another perceived challenge is the potential complexity of training requirements for employees at an automated warehouse. Business leaders are coming to realise that automated warehouses do not necessarily require extensive training. Many of the latest solutions available today are designed with ease of use in mind while still maximising productivity, such as the ability to operate through voice commands, which reduces operational complexity and minimises the need for training. This alleviates talent shortages since new workers can be on-boarded quickly.

Also, the issue of performance is especially relevant in ASEAN, where many countries in the region (apart from Singapore) continue to rank low in the World Bank’s global Logistics Performance Index, with poor infrastructure cited as one of the main reasons. It is imperative that governments and companies alike in the region continue to improve their infrastructure through automation and proven technologies such as IoT, or risk being left behind.

Warehouse executives have mentioned the importance of outfitting their staff with technology in five years. Do you see the profile of a typical warehouse worker changing in the future?

While IoT has proven to have many applications across various industries, it has shown itself to be particularly important in the logistics industry. With the use of IoT solutions, businesses are able to obtain greater visibility into their warehouses and sense what is happening. Organisations can then analyse real-time operational data to deliver actionable insights that drive real-time, effective decision-making. For example, warehouse staff would be kept updated on which items are in demand and if stocks are running low. They can then restock quickly and ensure that order fulfilments continue to run seamlessly to ensure that they are able to maintain a high level of customer satisfaction. The study also revealed a few interesting tidbits regarding IoT’s mainstream application.

Warehouse executives plan to slash the use of pen and paper from 95 per cent in 2015 to 24 per cent. Respondents also indicated that the use of handheld computing systems connected to warehouse management systems will double from 40 per cent in 2015 to 86 per cent in 2020. In addition, 79 per cent will use RFID for inventory tracking in 2020, compared to 40 per cent in 2015.

Such capabilities will be of particular importance in the APAC region given the growth of e-commerce here. It is expected that online retail revenues in China, Japan, South Korea, India and Australia will grow from US$733bn in 2015 – already more than the combined figure for online retail in the US and all of Western Europe – to US$1.4tr in 2020. The e-commerce trend will place exponentially increasing stress upon the logistics industry to keep up. The advantages brought about by IoT, to help organisations stay ahead of the competition, are distinct, making it entirely plausible to infer that IoT will be an essential part of everyday life and business operations in the near future.

With an estimated 1.2 million square metres of new warehouse space projected to be completed in Singapore, there are concerns that occupancy will crash to a 10-year low. What are your thoughts on this? Do you foresee a massive warehouse supply glut?

While there may a strong supply of warehouse space in the pipeline for Singapore, I believe that there will also be an equally strong demand for those spaces, especially given the pace at which e-commerce is growing within the region. The e-commerce surge will naturally present great opportunities for the supply chain industry, especially in Singapore. At the recent National Day Rally, Prime Minister Lee Hsien Loong addressed this topic of e-commerce growth in the region.

He noted that businesses here are primed to take advantage of the fact that Singapore is already a major transport hub to make the country a major player in the new supply chains supporting regional and global e-commerce. As such, there will be significant strains upon logistics companies to keep up with demand, necessitating more warehouse space. The Warehouse 2020 APAC Vision Study shows that the rate of expansion will continue to accelerate, with 55 per cent of respondents planning to increase the number of warehouses in 2015, compared to 73 per cent in 2020.

What is your take on the current supply chain landscape in Asia in terms of technology adoption? Is technology adoption growing at an acceptable pace?

As mentioned earlier, all companies whether big or small now have to operate in a global economy, and this is especially true in the supply chain sector. While the pace of technology adoption is largely led by the global players, the global nature of the industry means that all business in it are required to continuously innovate and invest in their technological capabilities. With the additional opportunities afforded by the e-commerce wave, I believe that the pace of technology adoption will only continue to accelerate within Asia. This also implies a corresponding decrease in the use of legacy warehouse management systems, which our study shows will drop from 81 per cent in 2015 to 20 per cent in 2020.

Such systems will increasingly be unable to keep up with the quickening pace of operations demanded by the imminent landscape changes driven by e-commerce, and companies will need to phase out such systems or risk being left behind. Other indicators of this accelerating pace of technology adoption that can be found in the Warehouse 2020 APAC Vision Study include the fact that the percentage of barcoded inbound items to warehouses is expected to increase from 59 per cent in 2015 to 78 per cent in 2020; in addition, there is the expected adoption of handheld computing and RFID solutions highlighted earlier.

What is the ultimate warehouse for you? Can you describe your version of the perfect warehouse?

The ultimate warehouse should be one that has a robust infrastructure in place; one that embraces smart technologies and tools that allow them to operate at optimal productivity, achieve supply chain integration, and gain full asset visibility and actionable insights. This is what we call Visibility that’s Visionary. Enterprises should have access to realtime actionable intelligence in a constantly shifting supply chain landscape, allowing them to sense what is happening through actionable analytics on staff, goods and assets.

This would allow organisations to make more accurate analysis and predictions to adapt quickly to inventory conditions. By monitoring and analysing processes, warehouses will also be able to streamline them as well as optimise workforce productivity. The perfect warehouse is one that will continuously strive to be future ready and at Zebra, we remain committed to enabling businesses with greater visibility that would help deliver smarter decisions for tomorrow.