By Gan Soon Kiat (SK), Founder and Managing Director of WoodTrees
The Fifth Industrial Revolution (IR 5.0), where man and machine work together in perfect synergy for optimal output, reads like a world that is still far away from us.
Yet, the reality is this: with the rapid acceleration in global industry science, we are quickly speeding past IR 4.0 and digitising operations, to a more complex integration of technology in our business landscape.
Coming out of the pandemic-induced boom in e-commerce, the logistics industry has had to digitise and streamline its operations in order to keep up with the demands that have resulted from a rise in stay-at-home shopping and contactless fulfilment. From inventory management to packing and processing, right down to distribution and service, the warehousing industry — as the pumping heart of the entire logistics landscape — has become an integral part of the modern consumer journey.
In turn, this puts warehousing in a prime position to be at the very forefront of the shift to IR 5.0. Despite this accelerated growth (or perhaps because of it), there are still some glaring gaps that need to be addressed, lest local logistics fall behind.
As Malaysia and the region are inevitably speeding towards IR 5.0, it is quickly becoming apparent that simply adopting technology is no longer sufficient; it is now a question of how we synergise that technology and all the wonders it brings to the table with human expertise.
The pitfalls of lacking operational knowledge in warehousing technology
Malaysia has consistently enjoyed a fairly strong reputation as an appealing destination for high-value manufacturing and global services in Asia. Yet, the local warehousing sector is progressing more slowly than some of its regional peers, such as Singapore and Japan.
The pertinent question then becomes: What is preventing this robust country from playing in the big leagues of warehousing?
An examination of the current warehousing industry will very quickly unearth the answers: many warehouses go digital simply for the sake of remaining relevant. Having the right knowledge to use that digitised technology effectively is, however, what makes or breaks a warehouse’s ability to maximise its true potential. In blindly adopting technology and lacking that knowledge, many warehouse operators end up trying to plug gaps and inefficiencies with manual labour — a vicious cycle that incurs additional cost to maintain with no end in sight.
Not only is this an added expense, the use of inexperienced labour as a stopgap measure also increases the risk of slipshod inventory control and hazardous work environments. Long hours in an industry as demanding as logistics can be detrimental to the health of both employee and business, and racks up higher chances for human miscalculations in a supply chain system where there is zero room for error.
Automation as the beating heart of modern warehousing
Years of navigating the warehousing industry has necessitated an openness to new forms of and ways to use technology, and it has nurtured in me the firm belief that the answer to this conundrum lies in automation.
Automated systems like robots are equipped to independently perform tasks with greater speed and accuracy, without the need to rest even over a “work shift” of many long hours. For instance, automated storage and retrieval systems can help optimise the overall distribution and packaging process by intelligently managing space, inventory, and equipment — amounting to an average increase of 20-25 per cent in revenue and operational efficiency.
On top of reducing actual man hours needed for recurring tasks, warehouses will also benefit from the cost effectiveness of automation. With proper use-case training for warehouse staff on how to best implement and navigate automated systems, this wealth of intelligent task-based infrastructure can then be incorporated into multiple points in the chain of operations: AI-powered conveyor systems, loading cranes, automated scanners and sorters, and even adjustable racking systems.
While it is true that this improved cost-benefit relationship and greater overall efficiency are the key reasons to adopt automation, local warehouses also need to realise that the true potential of automation does not stop here. Contrary to popular depiction, ‘automation’ itself does not mean a takeover of artificial intelligence, or a dystopian future where robots put human workers out of their jobs.
The true world of automation I envision is one that goes beyond this — where machines open up opportunities for us to do so much more, working in tandem with humans to achieve larger, “big picture” results that neither would otherwise be able to on their own.
What does this mean?
If implemented correctly, automated systems can help perform tasks that are repetitive or that demand high levels of accuracy — so that their human counterparts don’t have to. Instead, humans can focus on more complex processes that necessitate the human touch, such as workforce management, strategic problem-solving, or even value-added, personalised services that will set a brand apart from its peers in a competitive marketplace. Not to mention, being able to hone their knowledge on more digital systems!
Priming Malaysian warehouses for IR 5.0
In navigating the constantly evolving demands of the economic supply chain and changing consumer behaviour, I encourage warehouse operating directors to more consciously strengthen their uptake of integrated warehouse management systems, just like what we offer at WoodTrees.
At the heart of these systems is the combination of automated physical processes and intelligent software, which can help prime our warehouses to tackle large volumes of inventory with consistent, optimised efficiency. Besides rising to meet current local demand, this will also ensure that Malaysian warehouses remain competitive and actively continue meeting greater demand on a regional or even global level. This is particularly crucial as cross-border deliveries are steadily growing in popularity, as Southeast Asia becomes more globalised and connected both to neighbouring nations as well as the rest of the world.
I genuinely believe that automation will not only earn Malaysia a spot at the forefront of Asia’s logistics chain, but will also spearhead the preparation of local warehouses for IR 5.0 and the transformation of our e-commerce sector into an even greater economic force.