5 Challenges Facing the Manufacturing Warehouse Industry in 2022

February 25, 2022

It’s an exciting – and challenging – time to be in the manufacturing warehouse business. Today, warehouse managers are desperately working to leverage and utilize existing space as higher transportation costs fuel more leasing activity. According to CBRE, industrial leasing volume, including renewals, reached record numbers record-leasing numbers in the United States last year. Approximately 590 million square feet was set to be leased as of July 2021 — 52% higher than the year before. 

Despite this growth, productivity in the warehousing and storage industry dropped 7.6% last year. Much of this can be attributed to growing pains as companies such as manufacturing warehousing businesses try to increase warehouse capacity and new technology while improving employee retention and safety. 

Five Challenges for Manufacturing Warehouses

Let’s take a look at the top five challenges that manufacturing warehouses are trying to manage and solve.

1. Warehouse Capacity

Many warehouses and distribution centers are built based on the needs of the business at the time of construction. Of course, the manufacturing industry is always evolving, and the industry is experiencing high growth. One of the side effects of a booming manufacturing industry and rising transportation costs is that warehouses run out of room. There simply may not be land space to expand on, or real estate price hikes may have made financing an expansion difficult. 

In a recent story, Forbes writes, “...Since acquiring more space is not possible, the only solution is to go up. This is driving new elevated mezzanine and racking configurations.” In addition to going up, “distribution centers are being compressed by realigning materials using narrow aisles.” To capture business during this boom, manufacturing warehouses can expand vertically instead of horizontally by installing customized storage solutions using pallet racks, industrial shelving, and other material that match the layout of the warehouse, improving manufacturing storage capacity and efficiency.

2. Inefficient Manufacturing Warehouse Layout

Although some warehouse managers make efforts to create more efficient use of their space, they’re not always successful. A survey conducted by Logistics Management reveals that the average warehouse capacity used by warehouses is only around 68%, and this sometimes comes down to ineffective use of space. While maximizing vertical space and narrowing walkways certainly help, other optimization techniques include:

  • Making products in the warehouse more easily accessible
  • Categorizing inventory in a systematized way
  • Using warehouse simulation software to create a 3-D model of the most optimal arrangement based on the dimensions and measurements of your warehouse and inventory; some manufacturing warehouse management software already offers this technology!
  • Implementing an automated storage and retrieval system (AS/RS) to automate your putaway and picking processes for speed and efficiency

Another effect of inefficient manufacturing warehouse layout is poor inventory management. By improving the layout, you can reduce the chances of employees:

  • Searching for items in the wrong place
  • Storing receivables in the wrong place. 
  • Accepting orders for items that are out of stock
  • Denying orders for items that are actually in stock

3. A Changing Workforce 

According to the US Chamber of Commerce, all sectors of the economy are facing a shortage of workers, with over 10 million job openings in June (a number that continues to escalate). This, of course, has impacted the manufacturing warehouse industry as well. With the sudden growth in logistics, more companies are trying to expand meaning workers have more job options available to them. Inbound Logistics reports that nearly 65% of surveyed warehouse managers said that finding, training, and retaining qualified warehouse employees was a challenge. Lack of staff or unskilled staff can lead to increased labor costs, slow business growth, and damage the company’s reputation with customers.

Changes in workplace demographics also play a role. According to Cyzerg Warehouse Technologies, millennials make up a good portion of the workforce, and their goals and values are different from older generations. Suggestions for reeling in the younger crowd include allowing prospects to fill out applications from mobile devices, engage with hiring managers or other employees on social media, and learn more about the company's values via blog posts.

Lastly, manufacturing warehouse managers who can’t find new talent may want to consider ways to boost productivity of the existing staff. This can be accomplished by maximizing storage space and improving organization, which reduces employee walking and searching time, ultimately improving fulfillment times (better organization will also make training easier when you do find new employees). Automation can also improve employee speed and help pick up the slack when there’s a lack of employees. 

4. Employee Safety

The warehouse can be a dangerous place. Accidents at docks or those involving forklifts, conveyors, materials storage, and manual lifting can result in injury or even death. 25% of all industrial accidents occur at the loading dock while forklift accidents result in nearly 35,000 serious accidents annually.

Aside from the devastating impact on those injured and their families, manufacturing warehouse accidents affect the business itself. Warehouse accidents account for 95 million lost workdays every year, and accidents result in a loss of productivity, worker compensation claims, lowered employee morale, damaged goods, and potential OSHA fines. To ensure accidents remain at a minimum and warehouse employees remain safe, manufacturing warehouse companies need to regularly keep track of potential maintenance issues throughout the facility and consider installing safety features such as dock alerts, lighting, and safety gates; as well as rack netting, end guards, and pallet support bars. Download our warehouse safety checklist here.

5. Technology

Digital transformation is poised to forever change warehousing, distribution, and fulfillment. Automation improves efficiency and makes holding just-in-time (JIT) inventory more practical. This allows warehouses to decrease or diversify their on-site inventory, which offers more flexibility when demand shifts and stock needs to be changed quickly. In addition, automation solutions like flow-through sortation improve the accuracy and timeliness of store replenishment, giving warehouses more time to adapt as necessary. 

And then there are the robots, defined as “machines that resemble humans and perform tasks on command.” While they still may seem a bit too sci-fi for some warehouse facilities, they’re also not going away. Today’s robots are becoming less expensive and more precise in their movements, reducing product damage while allowing them to do more complex tasks; many also have sensors and cameras that enable them to automate more processes. As a result, the global warehouse robotics market size continues to grow and is expected to reach $9.1 Billion by 2026, at a CAGR of 14%. Some of these robots include collaborative robots. These “cobots” are designed to work safely alongside warehouse employees, handling the more dangerous tasks while also increasing operational effectiveness

Because of the cost of adopting new technologies, it’s important for manufacturing warehouses to truly understand their needs and the intended goals for any new technology, as each is different and includes various features. You’ll want to weigh the pros and cons and make sure you’ll see a healthy ROI over the shortest amount of time.

How SSE Helps Manufacturing Warehouse Companies

Is your manufacturing warehouse business feeling the strain of any of these distribution challenges? If your warehouse is located in Florida or South Georgia, the professionals at Southern States Enterprises (SSE) want to help. For over 20 years, companies in the area have relied on Southern States Enterprises as the leading name in motive power, docks and doors, industrial pallet rack, pallet storage systems, and warehouse equipment. 

We know how to expand your facility vertically, allowing you to save money, increase efficiency, improve operations and employee productivity. We also know how to make safety a priority, and know exactly what you need to keep your docks, doors, and racks safe and efficient. Our field service technicians will also keep your facility running smoothly and safely at the lowest possible cost through a planned maintenance and repair schedule using a warehouse safety checklist. And, when it’s time for a new part, a replacement part, of a technology upgrade, we can help and make recommendations and find the right equipment for you. Want to talk to someone now? Contact us today.

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