The E-commerce ecosystem in India faced a lot of challenges, including supply chain crises, delays in shipping, unbalanced demand and flow, as well as increasing costs during the pandemic. Also, highly secured e-commerce business operations faced pitfalls and logistics struggles, with most challenges linked directly with order flow from the warehouses.
In the drastic atmosphere of failing e-commerce strategies, warehouse automation appeared as a solution and an essential tool that up scales weak operations and reduces the risk of error. It would not be wrong to say that automation enables you to meet customer expectations and deliver their orders right on time even if the order volume surges.
What is Warehouse Automation?
Warehouse automation is defined as the automated movement and record management of stocks inside and outside the inventory without physical labor or human involvement. As we know, in India most of the e-commerce warehouses rely on human labor for the movement of ordered products for delivery, even as human assistance brings along errors and chances of delay.
The transformation of e-commerce warehouses from physical labor to the utilization of autonomous robots and AI-based management strengthens all the weak points. Let’s discuss the impact of warehouse automation on the ecosystem of e-commerce in India.
Warehouse Automation Impact on E-commerce in India
According to the market survey, Indian warehouse automation was valued at more than USD 85 million in 2020, and it is expected to rise with a compound annual growth of more than 26%. The impacts of warehouse automation on the e-commerce ecosystem of India are:
1. Significant Opportunity for New Investors
Due to automation in warehouses, the delivery system has become nearly flawless. It opens doors to an e-commerce world where the failure chances are minimized for new investors. According to the economists, in 2020 the overall e-commerce businesses faced strategic failures due to Covid-19. The sudden surge in online orders caused late deliveries and wrong shipments of orders took down the reputation of many online stores. But with the introduction of warehouse automation in 2021, the e-commerce ecosystem of India recovered and sustained.
2. Improvement in Operational Efficiency of Healthcare
According to India Brand Equity Foundation, India was the largest supplier of generic drugs worldwide in 2020. With the spread of Covid-19, the sudden rise in demand appeared very challenging to manage. Warehouse automation improved the operational efficiency of the online pharmaceutical industry of India and boosts its growth in e-commerce by facilitating the smooth drug delivery and manufacturing process.
3. Increased Sales
The online buyers in India are expected to reach 220 million by 2025. Usually, one product is ordered to be delivered across different cities by different clients. Due to the increasing demand for same-day delivery, e-commerce businesses need to establish warehouses in several cities and go for the automated workflow to meet customers’ requirements and demands in time. This can lead to an increase in sales and business expansion of the businesses.
4. Amazon – Changing the Dynamics
Warehouse automation is being used by key players in India including Myntra, Amazon, Flipkart, etc. Amazon is among the pioneers of warehouse automation in India. It is not just getting automated warehouses on a lease, but also they are going to use warehouse robotic services. They have used Kiva robots, for packing and processing, and have proved that automation and robotics are a perfect duo! Warehouse automation reduces handling labor and storage costs for e-comm businesses.
5. Competitive Edge
Warehouse automation has helped e-commerce businesses to cope with delays in delivery, transportation constraints, lack of skilled workers, and other challenges. Businesses in India are securing the future of their business by adopting warehousing technologies and getting a competitive edge over other businesses.
Challenges of Warehouse Automation in India
We have discussed the positive impact of warehouse automation on the e-commerce ecosystem of India. Though warehouse automation proved very beneficial, it also comes with challenges. These challenges include;
- You need a considerable amount of money for automation setup and maintenance.
- Automation equipment such as robotic devices and computers may breakdown and require costly repairs.
- You need to set a periodic maintenance schedule to prevent maintenance issues in the system.
- You need to perform audits of the inventory for the verification of data processed by an automated system.
(Khursheed Alam is the Co-Founder of Atmos Systems)