Warehouses lack the agility necessary to respond to unplanned disruptions and are paying a high cost as a result, according to new market study insights from distribution center technology company Lucas Systems.

In the study, more than half (51%) of U.S. supply chain executives said their automation systems are unprepared to deal with unforeseen changes, new requirements and disruptions that are happening. 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 meet need for responding to unplanned disruptions.

Warehouses Incurring Additional Operating Costs

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

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,” explained Lucas Systems CMO Ken Ramoutar in a news release. “If your automation can’t quickly adapt to in-the-moment shifts, then your warehouses are at a real disadvantage.”

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

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