The warehouses of the future bring new supply chain risks, according to a new report from MIT Center for Transportation & Logistics. The report identifies the vulnerabilities in the warehouses of the future by categories:
Data Management
- Data quality and a lack of data security often result from transitioning to new
technologies and integrating new systems.
Software Systems
- Legacy system dependencies limit cybersecurity capabilities.
- Software bugs and vulnerable open-source libraries.
- The dynamic warehouse environment makes it challenging to establish robust
system access controls.
Automation Hardware
- Battery and charging system failures pose new fire risks.
- Sensor malfunctions and navigation errors can lead to accidents.
- Rigidity from automation reduces adaptability to disruptions.
Digital Network Infrastructure
- Cloud migration exposes operations to new cybersecurity threats.
- Systems integration creates points of failure and unauthorized access.
Physical Infrastructure
- Power and network outages can result in significant disruption.
- Physical facility security remains a primary vulnerability.
Human-machine Interaction
- High employee turnover and low technology acceptance create security
vulnerabilities and challenges to technology adoption. - The physical size of new, mobile automation equipment and the proximity of
warehouse staff can compromise safety.
Building Resilience in the Warehouses of the Future
The report offers some methods for companies to adopt a multifaceted approach to risk management. Companies need to focus on developing new detection and mitigation capabilities against technology-related risks, while maintaining flexibility in their operational strategies and building redundancy for worst-case scenarios.
The research has identified three key areas for companies to focus on. (excerpted below)
First, new approaches to technology evaluation, systems integration, and vendor management are needed to account for increasing cybersecurity risks. Robust, standardized security practices are critical, including for smaller firms adopting and supplying new technologies, which can present access points for cyberattacks on large supply chain networks. There are many examples where an attack on a key technology supplier has had devastating effects on multi-firm supply chains.
Second, high employee turnover leads to a loss of operational knowledge over time and can result in unsafe practices. The complexity of modern warehouse systems will necessitate continuous training and upskilling of the current workforce. It will also allow companies to create safer and more rewarding jobs in warehouses that can increase retention rates. Fostering a culture that embraces technological advancements while recognizing the continued importance of human expertise will be critical for the success of such training programs.
Third, there is a need for new business continuity plans. This could be done by employing high-availability approaches for critical systems. For example, companies can safeguard their warehouse management systems (WMS), which represent the brain of interconnected warehouses, with three copies: a local host, their own server, and a cloud backup. In case of a failure, the backups should allow for a seamless, fast recovery by switching systems. In terms of power and network connectivity, warehouses can also build redundancy by establishing multiple access points with different telecom providers. Additionally, companies should have manual fallback options for their facilities in case of complete system failures.
