Although the volume of goods handled in the logistics industry temporarily declined due to the spread of COVID-19, it has been increasing since 2021 due to the impact of stay-at-home consumption. Warehouse operations that enable smooth logistics are important here.
However, warehouse management involves various management tasks such as receiving, shipping, and inventory management, and many warehouses are unable to manage efficiently due to labor shortages. In this article, we will look at the challenges and causes of warehouse management tasks that support the logistics industry, and then share the key points for achieving efficiency. If you are in charge of warehouse management tasks that you feel are challenging, please refer to this article.
Reference: Survey on 17 logistics industry markets (2023) | Yano Research Institute Ltd.
Warehouse management operations that support the logistics industry
Stay-at-home consumption during the COVID-19 pandemic has significantly increased the volume of logistics handled. According to the "Market Survey on E-Commerce" published by the Ministry of Economy, Trade and Industry on August 12, 2022, the BtoC-EC market size in the physical goods sales sector is 13,286.5 billion yen (2021). The market size in 2019 was 10,051.5 billion yen, so this represents an increase of more than 3 trillion yen in just two years.
Reference: Market Survey on E-Commerce | Ministry of Economy, Trade and Industry
Although BtoC handles a larger number of products than BtoB, the amount handled per order is small, making product management more difficult. The logistics industry, or warehouse management, is what supports this.
Main duties of warehouse management
Warehouse management operations, which support the ever-increasing volume of goods, mainly involve the following management tasks:
- Warehouse management:
Checking whether there are any discrepancies with the invoice for products received from suppliers and storing them in the warehouse - Shipping management:
Shipping products from the warehouse according to shipping instructions - Inventory management:
Managing the storage locations of products in the warehouse and whether the ledger and actual stock levels match. Also, inspecting and managing whether there are any defective products.
Warehouse management work is a broad term, but as mentioned above, there are many different types of work, and many of them are time-consuming. If they are mainly done manually as in the past, they place a significant burden on employees. In the next chapter, we will explain the challenges of warehouse management work and their causes.
Warehouse management issues and causes
In warehouses where demand is increasing, the challenges facing management operations and their causes are as follows:
Talent shortage
Warehouse management work has always faced a major challenge with labor shortages. According to a "Survey on Corporate Trends Regarding Labor Shortages" released by Teikoku Databank Ltd. on November 30, 2022, the rate of full-time labor shortages in the "transportation and warehousing" industry is 63.8% (October 2022). This is the fifth highest rate among all industries, and has increased by approximately 13% over the past year, from 41.4% in October 2020 and 50.3% in October 2021. Labor shortages amid increasing demand are an issue in warehouse operations that require an immediate solution.
Reference: Survey on Corporate Trends Regarding Labor Shortages | Teikoku Databank Ltd.
One of the reasons for the chronic labor shortage in warehouse work is the decline in the labor force due to the declining birthrate and aging population. An increase in retirees due to retirement age is a major cause of the labor shortage. The high turnover rate in the warehousing industry can also be said to be a cause of the labor shortage. According to the "Employment Trends Survey Results for the First Half of 2022" released by the Ministry of Health, Labor and Welfare, the number of new employees in the "transportation and postal industry," which includes warehousing, in the first half of 2022 was 1.65 million, while the number of people who left the industry was 1.963 million. With more than 300,000 more people leaving the industry than joining the industry, the labor shortage in warehouse work can be said to be a very serious issue.
Reference: Employment Trends Survey Results for the First Half of 2022 (Employment and Turnover Situation by Industry) | Ministry of Health, Labor and Welfare
Personalization of work
Due to retirement and resignation, the number of personnel with management know-how is decreasing. Warehouse management requires comprehensive management, such as the timing of incoming and outgoing goods, the status of warehouse equipment, and understanding of product characteristics, but there are few opportunities for training, and in some cases, the person in charge simply disappears. The lack of personnel leads to the work becoming personalized, and in the worst case scenario, if there is no person in charge, operations will come to a halt, which will have a major impact on the business.
Key points for solving warehouse management issues
It is inevitable that the declining birthrate and aging population will continue to worsen in the future, making it extremely difficult to address the issue of labor shortages through new hiring. Furthermore, unless the labor shortage is resolved, it will be difficult to eliminate the dependency on individual tasks. As a result, the introduction of warehouse management systems and edge computing has been attracting attention as a way to simultaneously solve these problems. Here, we will explain each of them.
Warehouse Management System (WMS)
A Warehouse Management System is a system for streamlining management operations in a warehouse, and it centrally manages incoming and outgoing goods, inventory management, and stocktaking. Its main functions are as follows:
- In-stock/out-stock management:
Check against in-stock slips and manage sorting when stock is received. Picking and inspection when stock is removed, checking against out-stock slips, etc. - Inventory management:
Managing inventory placement, quantity, expiration date, manufacturing date, etc. - Inventory
inventory: Creating inventory work sheets, creating a list of discrepancies between actual and book numbers, creating inventory reports, etc.
In addition to these functions, some types of systems can also create labels for product management, delivery notes, waybills, invoices, price tags, etc.
By introducing a warehouse management system, manual work can be reduced and human error can be reduced. In addition, anyone can easily manage incoming and outgoing goods and inventory, which also helps to eliminate the dependency on individual tasks.
Edge Computing
Edge computing is a technology that processes data on the periphery of computer networks. It refers to a distributed architecture that processes and analyzes data on IoT devices such as smartphones and PCs, as well as surveillance cameras and sensors, or servers.
Many recent warehouse management systems manage data on the cloud. However, in the case of the cloud, data is sent over the network and then managed, which creates a slight time lag. In addition, when warehouse management operations involve frequent inbound and outbound shipments, sending data to the cloud each time places a strain on network traffic. Edge
computing processes data on devices located close to the site where the data is generated, so it is highly real-time and reduces the risk of time lag even when data is frequently inbound and outbound. In addition, since there is no need to send all data to the cloud, the burden on network traffic is also reduced.
For more information on edge computing, please see here.
Explaining the advantages and disadvantages of using edge computing in the manufacturing industry and the necessary requirements | Stratus Blog
Example of edge computing usage in warehouse management operations
We will introduce some actual examples of edge computing being used in warehouse management operations.
Utilizing edge computing to support automation of logistics operations
Companies that were looking to reduce the burden on workers due to labor shortages were introducing unmanned forklifts and unmanned guided vehicles to automate picking and in-stock/out-stock operations in warehouses. Edge computing was then introduced to manage these devices. In automation demonstration experiments, it was linked to devices and systems, and made a significant contribution to data acquisition and mainly to maintenance recovery responses.
Utilizing edge computing for image inspection systems in automated warehouses
A company that operates a product wholesale business is using edge computing for the automated warehouse system and center system of its logistics centers located throughout the country. Specifically, it has built an AI image judgment system, enabling the logic judgment of images at the automated warehouse site and the sending of alerts when an abnormality occurs, thereby improving the efficiency of the automated warehouse.
The key to solving warehouse management problems is to utilize systems
Due to the influence of stay-at-home consumption, the demand for warehouse management work has increased significantly. However, due to the aging of workers and high turnover rate, it is not possible to meet all demand. In the current situation where there is no possibility of a sudden increase in human resources in the future, it can be said that the use of systems is essential to solve the problems of warehouse management work.
When it comes to systems for warehouse management work, warehouse management systems may be the first to come to mind. However, in order to advance automation and efficiency, it is necessary to consider the introduction of further systems. That is why we recommend the introduction of edge computing. Theuse of cloud computing, which is now becoming commonplace, reduces the load on the entire network and greatly contributes to solving problems that are difficult to solve with a warehouse management system alone, such as real-time data processing. If you are worried about how to reduce the burden of warehouse management work, why not consider the introduction of edge computing?
