Since the pandemic began, warehouses in the e-commerce and retail sectors have had to adapt to meet new and rapidly increasing demand. In 2020, online purchases accounted for 20% of all retail sales in the U.S., and e-commerce sales are expected to exceed $1 trillion for the first time this year. From keeping more inventory on hand to increasing automation, the warehouse and distribution industry has taken new form in the past years, and advanced at unprecedented speed.

E-commerce and retail warehouses have begun to occupy more space in the warehousing market, valued at $77.57 billion in 2020 and expected to increase at a CAGR of 10% each year until 2028. Along with this growth, however, comes bigger challenges, especially when running omnichannel warehouses. There’s a need for innovative methods and approaches to daily operations.

Following are the top challenges that warehouses and distribution centers face in the e-commerce and retail sector.

Dealing with a lack of inventory visibility. It’s difficult to track inventory when it’s spread across a number of distribution channels. Consumers are looking for products that can be delivered the same day or, at most, within two to three days. In addition, having clear inventory visibility helps with forecasting and planning supply chain operations. Inaccurate inventory tracking can cause over- or under-stock levels, leaving some items no longer suitable for sale, and sapping picker productivity.

Running different processes in one warehouse. In an omnichannel warehouse, many processes have to run smoothly in parallel. Store delivery and online sales, which are handled very differently on their own, must coincide and coexist frictionlessly in the same warehouse, which must learn to optimize both approaches simultaneously.

Managing increased throughput. With a rise in online sales comes an increase in the number of individual orders to be picked and processed. Facilities must implement strong and efficient methods for managing the volume.

Managing inventory processes manually. Manual processing leaves room for more human error, as well as contributing to a lack of inventory visibility.

Partnering with the wrong 3PL. Partnering with an experienced third-party logistics provider can help warehouses optimize inventory and omnichannel fulfillment. Often, however, it can be difficult finding the right 3PL for achieving flexibility as order volumes grow.

Modern-day warehouse automation comes in a variety of forms.

Automated guided vehicles (AGVs) offer multiple layers of algorithms for deciding how to cluster orders and route them to the right picking station — for brick-and-mortar retail or e-commerce. There should also be an option for both picking stations to support omnichannel operations.

AGV algorithms consider robot routes, bins and their specific locations in the warehouse, according to order priority and required SKUs. A “put-to-light” system can automatically notify the picker where to place the unit for the order on the put wall. With the addition of advanced software, AGVs can even predict future routes and orders, simplifying picking and processing operations.

The e-commerce picking station handles high numbers of SKUs and multiple orders. Smart robots deliver the bins, then transport them away from the picking station once the unit is scanned.

The retail picking station is used for wholesale and bulk orders. It can handle high-volume orders with the same SKU. At this level of activity, bringing the same bin to the picking station over and over again is time consuming and lowers the efficiency of the warehouse. Instead, bins that are needed will be brought once to the retail picking station, taken away by robots, and placed in their designated shelving system. The system automatically instructs the picker on which items to pick, and in which order bin to place the item.

The hybrid picking mode combines the activities of e-commerce and retail picking stations into one. Multiple robots, whether pickers or replenishers, are needed to bring bins and participate in the outbound process. The right software is crucial to instructing the picker on when to pick from the robot and when to pick from the station shelves.

A comprehensive system enables warehouse managers to run multiple processes in parallel, while maximizing inventory visibility and increasing throughput. Because today’s technology can be deployed across a wide variety of use cases, warehouses can manage processes with ease, and understand exactly what needs to occur and when. It’s the perfect solution for facilities trying to channel multiple, complex fulfillment operations under one roof, and supply the best service to their customers.

Ulrich Toft is vice president of products with Caja Robotics.