Most Companies Dissatisfied with Their Distribution Center Automation

But upfront costs continued to hold companies back.

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RESTON, Va.-- Softeon, a global supply chain software provider, released the results of a major study on user perceptions of distribution center automation and software.

The report found that just 12.9% of companies are satisfied with their current levels of DC automation.

Based on a survey of 187 logistics professionals across a wide range of industry sectors, the report indicates that 42.1% were unsatisfied with their current levels of DC automation, while another 45.9% were just partly satisfied with current automation levels.

What’s holding companies back from the adoption of additional automation? Not surprisingly, the upfront cost of automation topped the list of barriers, scoring an average of 5.8 on a rating scale where 1 was the lowest barrier, and 7 was the highest. ROI concerns (5.6) and lack of flexibility (4.5) were the second and third-ranked barriers, respectively.

Switching to the software side, just 11.6% of respondents said they “knew a lot” about newer Warehouse Execution Systems (WES) solutions, with another 6.3% having deployed WES. That compares to 34.3% who "don't know much" about WES and 47.8% who "know a little” about the technology.

The report from Softeon is full of additional data points, charts, and additional comments from survey respondents. A few highlights of the data include:

  • 37% of respondents said company executives view logistics excellence as essential to overall company success.
  • Companies view their logistics process effectiveness much higher than their logistics technology effectiveness, with a combined 54% rating process effectiveness as either 'highly effective" or "effective" versus 39% who felt the same way about their use of technology.
  • Out of a list of 11 distribution technologies, traditional radio frequency systems scored the highest on perceived attractiveness over the next three years, followed by number 2 mobile robots and, surprisingly, RFID at number 3.
  • While companies rated their current Warehouse Management System’s core capabilities with a decent 4.6 average score on a 1 to 7 scale (7 = highest), scores were much lower for specific advanced features such as task interleaving and flexibility to meet new requirements, including material handling system integration.

“Given the significant cost, labor and cycle time challenges shippers are currently facing, I am not surprised interest in DC automation is at such high levels,” said Dan Gilmore, chief marketing officer at Softeon. “This study provides a unique and detailed view of how companies are thinking about the options, both in hardware and software.”

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