Lucas Systems New Market Study Explores the Cost of Inaction

Warehouses lack the agility needed to respond to unplanned disruptions and are paying a high cost as a result, according to insights released from Lucas Systems, a distribution center technology company providing software to workers in more than 400 warehouses worldwide.

In the study, more than half (51%) of U.S. supply chain executives said their automation systems are unprepared to handle unforeseen changes, new requirements, and ongoing disruptions.  And warehouses haven’t done what it takes to be adaptable, as 77% of respondents admit that at least half of their hardware or software systems are too rigid to respond to unplanned disruptions.

Supply chain executives are paying the price for a lack of agility. About 60% of those who reported rigidity say they’ve incurred between 11% and 25% additional operating costs or losses due to a lack of automation adaptability when dealing with disruptions or new requirements.

The statistically significant study, conducted by Lucas Systems in partnership with Wakefield Research, polled 114 U.S.-based supply chain executives to examine their automation adaptability.

Disruptions such as system downtime, equipment failure, labor shortages, and unexpected demand spikes can paralyze a warehouse. The rate of these disruptions does not appear to be slowing down. The study showed that 85% of respondents experienced up to 10 significant, unplanned disruptions in just the past year. And another 7% experienced more than 10 of these disruptions. About 51% of the study’s respondents report more unplanned operational disruptions than three years ago in the aftermath of COVID.

“Unplanned warehouse disruptions are on the rise since the COVID pandemic,” explains Lucas Systems CMO Ken Ramoutar. “If your automation can’t quickly adapt to in-the-moment shifts, then your warehouses are at a real disadvantage.”

Ramoutar says unprecedented events such as the pandemic heightened awareness about the need for adaptability, but many distribution centers still haven’t deployed self-optimizing automation.

Other insights from the market study:

• 86% of supply chain executives said adaptable warehouse tech is critical
• 72% of those surveyed said it would take considerable effort to reconfigure their automation in response to disruption
• More than 1 in 4 (26%) of survey respondents said adaptable automation helped reduce their operational costs by more than 25%.

Lucas Systems outlined its vision for creating an agile warehouse in its report, The Transformational Promise of the Dynamic Warehouse. The company has recently been investing in software solutions that enable agility, such as its self-optimizing Dynamic Work Optimization, Dynamic Slotting, and Dynamic Pallet Building.