The e-commerce tsunami that changed the face of distribution, had an equally big impact on the facilities that support those operations. Today’s highly-automated distribution centers (DCs) look nothing like those of a decade ago. And the next few years — fueled by higher real estate costs, lower technology prices and continued labor challenges — will drive the adoption of even more cutting-edge technologies. So what technologies are becoming mainstream, what’s still in an early adopter phase, and what’s on the horizon? 

Several technologies that were cutting edge just a few years ago, are now being deployed in large scale.

Automated forklifts have moved into mainstream use. Innovations in guidance systems and new price points make them cost-justified in a larger number of companies. Many companies are also adopting Smart Carts, with their sophisticated routing software that guides warehouse workers to pick orders up to 30 percent faster. Goods-to-Person systems continue to improve and have reached a tipping point where the technology is justified by savings in labor and real estate in just about every large distributor we work with. 

Another trend that’s moving mainstream is multilevel distribution centers. Driven by the need to locate distribution operations in urban areas close to customers, today’s DCs are often built “up”, not “out”, with the associated technology to move products from floor to floor — like elevators and spiral conveyors.

The software to run these highly-sophisticated distribution centers continues to evolve and has moved into widespread adoption. Warehouse execution systems (WES) drive unprecedented levels of efficiency as they dynamically optimize every function in the DC, including labor, equipment, workflow and orders. They also help to extend the life of legacy equipment and software, and act as a platform for piloting emerging technologies.

Innovations in distribution technology are generating a lot of press. Autonomous robots work alongside, and sometimes replace, human workers for tasks like moving goods around the warehouse and picking product using robotic extensions. They promise more flexibility and a potentially lower price point than investments in conveyors and sorters. And they can be married with the GTP systems mentioned above to form highly-efficient goods-to-robot solutions.

Drones scan pallets and boxes inside the distribution center to get a more accurate inventory counts and cut down on this labor-intensive task. And technologies that automatically load and unload trailers are getting more sophisticated. Companies stage trailer loads inside the DC, then use rollers to “push” the product straight into the trailer. And technologies that load and unload mixed-SKU pallets are being more widely implemented.

And there are emerging technologies to make workers more productive, like augmented reality systems that guide forklift operators to the right pallet and workers to the right bin, and exoskeletons to be worn by workers to give them greater strength and endurance when moving products.

Visionary companies are making investments in distribution technologies to gain competitive advantage. But emerging technologies are not for everyone. A thorough cost-benefit analysis is needed to make sure the value is there for an operation. As these technologies become more capable and less expensive, they will be adopted by more companies and move into mainstream use.

The Outlook

Two major trends will drive significant changes in distribution in the next few years. The relentless demand for faster order processing will push companies to move inventory closer to their customers. That will result in more compact, multilevel distribution centers being built in urban areas. And the need to reduce reliance on human labor will lead to new technologies that make labor more efficient, and/or eliminate the need for human labor altogether. With that will come an even greater movement toward “lights out” (unmanned) distribution centers.

Chris Slover is vice president of Fortna Inc.