Powered by

Home Technology

Why Indian Warehousing Took To Tech And Automation In 2023

Warehouses in India have started integrating automotive technology in 2023 to keep up with booming demand.

By Zinal Dedhia
New Update
Technology integration i warehouse 2023

Two weeks ago, US-based Panattoni, an international real estate developer specialising in logistics and industry, announced the phase 1 launch of 'Panattoni Park NH71' in Delhi-NCR. This is a warehouse park that the company aims to develop by 2025 and plans to invest Rs 110 crore for it. This is Panattoni’s first project in the Indian market. 

Panattoni announced its entry into India in July last year, saying it will invest in four industrial and logistics parks to meet the rising need for warehouse space in key cities.

Panattoni isn’t the only company that invested in warehousing in India in 2023. Earlier this year, Investcorp Holdings BSC, the Middle East's largest alternative asset manager, announced that it was increasing its warehouse investment in India, hoping that the country's industrial aspirations and e-commerce development would feed demand for logistics. Warehousing presently accounts for over 16% of the firm's $350 million real estate portfolio in India, and that percentage is expected to grow. 

According to India Warehouse Automation Market Research Report 2023-2030, the Indian warehouse automation market was valued at Rs 202 billion in 2019, and it is expected to grow at a compound annual growth rate (CAGR) of approximately 13.38% from 2020 to 2024, reaching Rs 421.50 billion by 2024. 

This expansion in warehousing was by the automation of technologies. Not only did India’s warehouses — that cater to e-commerce, manufacturing and pharmaceuticals among others — become bigger, they also became smarter in 2023. By using automated storage and retrieval solutions such as vehicles, cranes and carousels to move items faster and programmes to spot and retrieve goods, warehouses in India upgraded this year to keep up with booming demand. 

Vinayak Bhat, general manager at Bastian Solutions, a tech-driven logistics solutions company, told The Core, “The Indian warehousing market is going through significant changes. When it comes to technology integration in warehousing, about 25% of the growth is driven by consumers. The companies are putting much effort into fulfilling the demands. Technologies like automated mobile robots, automated guided vehicles and intelligent warehouses is what we have seen trending. What are intelligent warehouses? There are software integrated directly with the warehouse where it can process certain warehouse activities by itself.” 

What’s Changed In 2023? 

The Indian e-commerce industry increased order volume by 26.2% year on year in FY2023, mostly driven by a 23.5% increase in yearly GMV (Gross Merchandise Volume) over the previous fiscal year.

Unicommerce, an e-commerce enablement SaaS platform, found in its study 'India E-commerce Index 2023’ that FY2023 saw customer preference shift slightly towards marketplaces, which had a 31.2% year-on-year order volume rise during the year.

Because of the increasing rise of e-commerce and the increased need for quicker and streamlined delivery, warehouses have begun to incorporate robots to enhance operations. 

Dhirendra Vashisht, director of India operations at Bastian Solutions, said "One of the trending technologies is to automate warehousing activities as well as inventory management. As a technology service provider, we are primarily concerned with intra-warehouse logistics and inventory movement. We are also concentrating on robots and automated equipment to transport things from one place to another.” 

The growing sizes of warehouses also means the need to be able to reach products faster and more efficiently as goods are being moved from one place to another. Earlier, warehouses used to be only ground floor storage. Recently, this has transformed into ground plus five or ground plus seven floors to be able to store more merchandise. 

SK Logistics, which handles pharmaceuticals and healthcare supplies, has multiple warehouses across India spanning up to 2,50,000 square feet. While the company had used minor automation earlier, in 2023 they became more dependent on tech. They have switched to an automated warehouse management system (WMS) that pinpoints the exact location of a particular package. WMS is a software and processes that allow organisations to control and administer warehouse operations.

The WMS also helps manage and control everyday warehouse operations, from the time items and supplies enter a distribution or fulfilment centre until they depart. It provides real-time insight into a company's complete inventory, both in warehouses and in transit. It helps logistics companies discern their capabilities for picking and packing operations, resource utilisation and analytics.

Along with WMS, they also use very narrow aisle (VNA), a system that helps retrieve materials vertically from all levels of the warehouse by using a battery operated forklift that accommodates one person and reaches up to level 7. This is more efficient than the previous system of a manually operated lift trolly and is supposed to be safer too. 

Dakshesh Shah, CEO of SK Logistics, told The Core, “With the help of a VNA and WMS, we are able to reduce up to 35% of the warehouse space or in other words we can optimise about 35% of more space in our warehouse. The picking job has become faster, efficient and error free. We are moving our labour skills from manpower to soft skills by utilising the automation for laborious jobs.” 

Shah’s company has also installed variable flow (VRF) air conditioners that conserve power and bring down costs. Once the warehouse has reached the appropriate temperature to keep the pharmaceutical items safe, the VRF air conditioners automatically turn off and ensure that the same temperature is maintained in every part of the warehouse.

In 2023, more companies also implemented the use of robotics for loading and unloading goods into vehicles to move them. 

Sandeep Bansal, chief business officer of Falcon Autotech, a logistics automation solutions provider, told The Core, “We observed a trend this year that robotics were used in trucking for multiple reasons and one of which is to shorten the time trucks spend on the dock. Another reason is to improve efficiency and reduce staff. Where four or five labourers took around 1 hour 30 minutes to unload a 40-foot-tall parcel truck, the telescopic container and robotic technology now takes only 30 minutes and just two labourers.”

The telescopic container can load and unload goods from trucks, sort packages and help operators work at a constant and continuous pace.  

Also Read: How Locals Are Misusing Political Party Symbols To Run False Loan Waiver Campaigns In Punjab

Why Now?

Automation is no longer a luxury for logistics. The year 2023 has been marked by the implementation of warehouse technology. According to an industry report, the worldwide warehouse robots market increased by 40% over the previous year. This increase can be linked to the growing need for supply chain efficiency, precision and speed.

Robots carry out a wide range of tasks that were earlier carried out by humans such as selecting and packaging to sorting and shipping. Flipkart, for example, has robots that can sort over 4,500 items in an hour, 10 times more than a single human could do at the same time.

One of the major factors driving more companies to automate their systems is the cost of labour. While countries like the United States saw the adoption of such technologies much earlier and are now in the process of advancing them, India is only now warming up to it. 

Mehul Kapadia, chief revenue officer at Locus, a tech solutions company for logistics, told The Core, “The ease of availability of labour and people versus now being able to do that more efficiency with technology and reducing your dependency on people, I think is one of the critical factors.” 

According to a McKinsey analysis, AI-enabled supply chain management has reduced logistics costs by 15%, inventory levels by 35%, and service levels by 65% for early adopters as compared to ‘slower-moving competitors’. AI in supply chain and logistics can help supply chain managers make better decisions. They now have the opportunity to learn not just what has occurred, but also what will occur in the future. 

Kapadia said, “Earlier the mindset was if I integrate technology in my business, people won’t like it and I won’t get the attention needed. But there has been a change in mindset so I think the way we are adopting technology across spectrum and warehouse being one of it, which is more led by manpower, our general sense of adoption for technology has gone up.”

Time and speed is another factor leading warehouses to adopt automation. Bansal said, “Customer expectations are one of the causes for incorporating automation since they demand immediate delivery of goods, such as a refrigerator, which a person expects to be delivered within a day. These are some of the common trends shaping the sector. We have the technology to meet the labour cost challenge, but meeting the estimated delivery has been a challenge in an ecosystem that extends from the manufacture of goods to the whole supply chain till it reaches the ultimate client.”

A Win-Win For Companies And Customers 

The expansion of e-commerce industry, multichannel distribution, e-grocery penetration with rapid delivery services, and worldwide supply chain network all contributed to massive growth in the warehousing sector. The notion of same-day/same-hour delivery has posed a new challenge to the global logistics business. 

Kapadia believes that automation in warehousing is not only beneficial for the warehousing sector, but is also an advantage for customers. For example, when a fast fashion brand receives an order for a particular product with size and colour specifications, and has three warehouses in a particular city, technology helps figure out where the product can be found and how fast it can reach the customer. 

Kapadia said, “This entire process can be smooth and faster with technology as all the information is in the software, rather than manually calling warehouses and understanding the situation.” 

Technology is also helping warehouses scale their business and save money, increasing profits. Shah of SK Logistics said, “Our revenue increased by roughly 8-10%. In terms of intangible benefits, our errors have gone down. The employees' physical hard work has now shifted to more soft skills.”

What Are The Drawbacks? 

According to a report by Nimbus Post, warehouse automation is not a new concept. However, it is expected to become more prevalent in the coming years. This is because businesses are increasingly looking for ways to reduce their operating costs. Automation can help companies to achieve this by reducing the need for manual labour. 

Technology integration provides advantages, but it also has drawbacks that must be addressed.

Shah said, "It is a challenge to train people when moving towards optimisation, especially when changing their mindset towards technology acceptance. We must devote significant effort to educating individuals to use technology effectively and to modify their perspectives. Also, because so few people are well-educated, it is difficult to initially train personnel on how to utilise technology correctly.” 

Also Read

Last-Mile Logistics Boom: Companies Are Racing to Deliver Despite Losses

Revamped Outlets, More Sections: Why Retail Brands Are Focusing On Physical Stores

login-icon

The Core brings you exclusive reporting, insights & views on business, manufacturing and technology.

ALL OUR ARTICLES ARE FREE TO READ.