Technology Spend in the Warehouse 

Why Technology Spend in the Warehouse Is a Non-Negotiable

As businesses head into another new year (fiscal or otherwise), there’s no doubt time was given to review operational efficiencies and earmark areas for improvement. For warehouse and logistics companies, keeping up to date on current technologies is imperative to maintain functionality across the organization and the supply chains they touch. But as storage, distribution and transportation continue to embrace more complex systems, knowing where to dedicate technology spend in the warehouse could bring more questions than answers. 

Warehouse Technology Spend on the Rise

Peerless Research Group conducts an annual study, measuring warehouse site expansions, square footage, and spending across the sector. Logistics Management Magazine reported 84% of respondents in the survey planned to increase their budgets for materials handling and warehouse automation, indicating technology spend in the warehouse is required to remain competitive. 

“As the world uses more technologies to support business function and consumer expectations, companies will have to increase their investments in innovation or otherwise disappear.” Manager of IT Applications, WSI (Warehouse Specialists, LLC.)

But with progress comes vulnerability. Supply chains are enabling greater visibility and transparency, boosting transmodal communications and warehouse systems productivity, both domestically and internationally. Although there are benefits to relying on technology, without the proper integration, management, and monitoring, vulnerabilities arise.  

Let’s weigh each side of the coin. 

Warehouse Technology in Motion

Materials and products must move quickly to meet customer demand. Storage, fulfillment, and transit need to process just as quickly. Technology helps people identify and organize requests in real-time and work efficiently to meet demand. And because these automated systems are connected to other points within a single or multiple supply chains, businesses can pivot just as quickly to avert risk, downtime, and unexpected costs. 

Robotics

Large storage and distribution centers are already using technology to speed up operations and improve the health and safety of their workers on the warehouse floor. While these industrial robots help workers avoid mundane and physically taxing work, and save employers from additional headcount spend, robotic technology will extend into direct human-robot connectivity, known as cobots.  

Following robotics trends may not be enough to keep a competitive edge, suggests Forbes.com, adding that use of automation creates more innovative opportunities for businesses to excel as industry leaders.   

However, your business needs from a 3PL may not require robotic integration or automation. 

Warehouse Management Systems Make a Difference

Depending on the type of products or materials stored or moved through end-to-end supply chains, recommended technologies will vary. Before deciding on what kind of system would provide the most benefit, and the best course of action for integration and ongoing implementation, consulting with an expert in warehouse and logistics technologies is the first step. 

Not All Warehouse Technology Systems and Spend Are Equal

For niche businesses with small menu of product offerings, or with more localized distribution channels, the right tech stack could differ from a larger enterprise’s needs. Knowing what’s in stock, the frequency of orders, the pace of fulfillment, and where it’s sent involves many people—each part of the journey supports streamlined operations or disruption. 

To get an understanding of what makes sense for your organization, here are common warehouse management systems (WMS) in use today: standalone, ERP, and cloud-based systems. 

Standalone systems

If you’re not ready to dive into extensive warehouse technology spend, investing in a standalone system could be an ideal entry point. The inventory management and warehouse operations features give you the basic bells and whistles you want, including lot control and tracking.  

And because the system applications are installed on networks within the warehouse, a business does not have to be onsite to keep a pulse on product activity. From order fulfillment to receiving and the in-between: barcode scanning, picking, packing, cycle counting, expiration date tracking, slotting, and put away are processed and documented, increasing accuracy and accountability.  

With all its advantages, standalone systems come with limitations. Technology systems are only as good as their functionality, supervision, and upgrades. These singular systems require updates to maintain optimal performance and provide security measures to the warehouse and the businesses involved.  

While standalone systems may be good for the short-term, they could present challenges in scalability. For companies planning for growth, investing in a more flexible solution may be more costly up front and cost-effective for the future. 

ERP (Enterprise Resource Planning) systems

To achieve greater efficiency and visibility across multiple departments within an organization, enterprise-wide software systems, like ERP engage a centralized network. With it, sales, accounting, human resources, marketing, and customer relationship management, for example are integrated into warehousing and logistics supply chains for a holistic approach to operations.  

There are numerous benefits for retailers and wholesalers that rely on historical information, trends, and demand forecasting to plan for product inflows and outflows and respond to changing environments across supply chains impacting orders, stock, and transit.  

In the event of a disruption, multiple departments could be alerted in real-time, allowing teams and processes to adjust with minimal downtime. Alternative material sourcing can be engaged, or product sitting in other locations can be identified and distributed to fulfill orders and support positive customer experiences and brand reputation. 

Unlike standalone systems, ERP software works well with other software, producing a single source of truth across a centralized hub that can grow with a company, both wide and deep. But not all ERP systems include WMS, so it’s important to exercise due diligence when researching your options. 

Cloud-based systems  

There are SaaS (software as a service) third-party vendors, bringing the best of traditional standalone systems together with the customization your company may require. 

These cloud-based WMS are managed outside your organization on a separate or private server over the web. If data security is a concern, and it’s always a concern, the SaaS vendor is responsible for ensuring data integrity and security measures are ongoing, allowing warehouse and inventory management systems to work optimally across the network, reducing data breach risks. 

WSI recently integrated the Manhattan Active® Warehouse Management system at its e-commerce fulfillment centers, streamlining fulfillment processes while standardizing receiving, picking, replenishment, and shipping. Their customers experience measurable improvements in throughput volume, pricing accuracy, and more. 

Cloud systems easily integrate complex global supply chains and adapt to the ebb and flow of business environments that can shift unexpectedly, due to weather-related or geopolitical events, and other unforeseen circumstances affecting normal business function.  

But like other systems that are managed by other parties, it’s important to know that the features available today will be there tomorrow. System upgrades could include enhancements to what’s already in place or ultimately phase them out. Ask questions, even if they seem repetitive, and avoid assumptions that could prove costly. 

Manufacturers Anticipate 2025 Challenges

To reassess operational needs for the near term, a quick glance in the rearview mirror couldn’t hurt. For manufacturers, it provides a window of opportunity, acknowledging fears and meeting them head-on with viable solutions. 

Members of the National Association of Manufacturers (NAM) cited their top concerns for 2025, including: 

• operational costs
• geopolitical instability 
• e-commerce demands
• technology spend
• cybersecurity risks 
• and sustainability requirements. 

Having a tailor-fit WMS working for your organization ensures efficiency, resiliency, and scalability that simultaneously protects product, customers, and strategic partners. But you have to know what you’re looking for to get the answers you need. 

“Don’t be afraid to ask questions about technologies you’re unfamiliar with. Those are the conversations logistics technology providers and 3PL partners can help answer.” Manager of IT Applications, WSI (Warehouse Specialists, LLC.)  

The Right WMS Could Be in Your 3PL Provider

If you haven’t considered partnering with a third-party logistics provider, it might be worth exploring. 

Many of the items on your warehouse technology and inventory management wish list could be yours, simply by aligning with a 3PL company that already has those systems in place.  

While doing your research to find a WMS solution, ask if the platform provides real-time reporting and analysis, data management, and whether it has the agility to leverage scale and flow with your business needs. 

Caution About WMS Shortcuts

What you decide to spend on warehouse technology could be largely driven by pricing, which is understandable. Though a focus on squeezing dollars could adversely impact your overall objectives.  

Choosing a 3PL company that does not have a comprehensive WMS on board puts your business and your customers at risk.  

“I’ve seen what can happen to companies that don’t have that kind of visibility. It’s not a place you want to be.” Joe T., Manager Applications IT, WSI (Warehouse Specialists, LLC.)  

WSI understands the specific requirements of manufacturers and retailers in their storage, fulfillment, packing, distribution, and transport of products across the U.S. The multi-node 3PL company adopted WMS and IMS technologies to optimize operations and safeguard the information shared internally and across supply chains. 

What you might save in warehouse technology spend could spur issues elsewhere, leading to unnecessary labor costs, excessive energy use and packaging waste, online reputation management, and more. 

Perhaps the wisest move to make is to consult with your current 3PL provider to learn what their technology capabilities are, and if they have the WMS solutions available to serve your company best. From there, find alternative providers and weigh the pros and cons of each before deciding on what works for you today and where your business is headed tomorrow. 

Discover how much farther 3PL provider WSI can take your business, efficiently and cost-effectively.