We raised a couple of important questions in our previous blog a few days back. Firstly, "Will the shortage of labor continue to pose a challenge for the growth of e-commerce warehouses?"
Amplified Labor Challenges in E-commerce Warehouses during Second Wave of Covid-19:
As seen in the previous blog, labor was an obstacle for e-commerce warehouse efficiency during the first wave of covid-19 due to the surge in sales caused by the shift in consumer buying behavior towards buying online.
Picture1: Voice of senior manager- E-commerce operations
The second wave of covid-19 amplified the labor challenges, reducing the efficiency of e-commerce warehouse operations, especially in the picking process. One of the reputed e-commerce companies that delivered essentials was seen hiring over 2000 employees to manage the inflow of orders.
Picture2: Voice of senior manager- Head of e-commerce operations
Over the past eight weeks, our discussions with senior-level executives working for reputed warehousing companies have made it evident that labor shortage continues to be a pain point and that there's a shift in mind towards automation.
Picture3: Food for Thought
Scope of Warehouse Automation in the Pre-Covid-19 Era:
A decade ago, the scope for automation in e-commerce warehouses was slim to none. It was always talk for another millennium what with labor being readily available and inexpensive. The Indian warehouse automation market was projected to grow at a rate of 10-12% during 2015-2020.
Graph1: Indian warehouse automation market (2015-2020)
However, the e-commerce and 3PL supporting e-commerce sectors in India started gaining popularity during the pre-covid-19 era, causing them to expand their warehouses at a rapid pace. They were forced to make their warehouses more efficient to keep up with the hike in demand brought on by the covid-19 pandemic. This meant reducing their dependency on manual labor by leveraging automation which bolstered the size of the Indian warehouse automation market.
Graph2: Indian warehouse automation market size
Automation in Warehouse Processes:
Over the past couple of years, we have been noticing numerous automation trends, predominantly in the post-picking functions of sorting, packaging, and dispatching.
Picture4: Warehouse automation trends outside the picking process
Growth of Automation in Warehouse Picking:
The picking process, however, was still largely dominated by manual labor during the pre-covid-19 era.
Picture5: Voice of project manager
E-commerce platforms soon realized that the current manual picking process was incapable of handling the surge in demand without deploying more manpower. This became a contributing factor to the decrease in warehouse productivity. E-commerce platforms started automating certain tasks within the picking process to increase efficiency while still utilizing manpower.
Automation Trends in the Picking Process:
Picture6: Automation trends in the warehouse picking
Reference of pick-rate productivity: AnalyticsIndiaMag
These automation tools have enhanced picking efficiency and increased accuracy in warehouse picking. However, they have not helped with the most time-consuming task in the picking process: Travelling.
Picture7: Voice of project manager
They have also not helped in eliminating the number of laborers needed in the picking process.
Picture8: Food for Thought
The Probable Solution:
We are noticing how e-commerce warehouses around the world are seen using pure-play automation in their picking process to increase productivity. A couple of the popular pure-play automation concepts that we noticed are:
2. Robotic Picking:
Picture10: Robotic Picking
While robotic picking looks like the perfect solution for warehouses to increase picking productivity, there are quite a few challenges yet to be overcome:
Picture 11: Challenges of robotic picking
Though these automation tools are available in India, they do not seem to be the right fit for Indian e-commerce warehouses due to the following reasons:
Picture12: Reasons why pure-play automation is not suitable for Indian warehouses
Picture13: Voice of senior manager
Having said this, it is safe to assume that e-commerce companies in India are still hesitant to adopt pure-play automation in their warehouse picking area. Though we see e-commerce companies thinking about pure-play automation in their warehouses a few years down the line, given the current pandemic situation, it does not seem viable.
The Next Chapter:
Considering these trends, modernistic e-commerce platforms will have to start looking for budget-friendly solutions to increase picker productivity in their warehouses by reducing travel time.
Picture14: Food for Thought
At Greendzine Tech, we believe that MOPTro PICK, a smart warehouse picking electric vehicle is the right fit for Indian warehouses.
In our upcoming final blog, we will be discussing the benefits of using MOPTro in Indian warehouses.
Market Research Associate