Storage and warehouses are still far behind the industry they service, even though they are the backbone of almost every aspect of the ecommerce fulfilment chain. This includes everything from initial packaging and shipping to storage and distribution at their destinations. As a matter of fact, the warehousing market in Malaysia is currently 94% smaller than that of e-commerce, with a market value of RM 2.58 billion as opposed to RM 39.8 billion.
According to Intelli-Mark, there are no indications that things will improve. Over the next five years, the e-commerce sector is expected to grow by 13.2%, but warehouses are only expected to grow by 7.1% or roughly half that rate.
To find out more, we spoke to Joey Tan, Senior Business Development Manager of Intelli-Mark about the current situation. We looked at issues such as backlogs for our packages because Malaysian warehouses cannot keep up with demand and how eventually, warehouses won't be able to provide the level of convenience to which Malaysians have grown accustomed.
What are the major gaps in the warehousing industry in Malaysia at the moment?
From what we have observed in Malaysia, the major gap contributors are limited modernization and automation which leads to a lack of technologies that empower the efficiency of the warehouse operation. Without technologies, warehouses are required to employ the traditional ineffective business ops that is highly reliant on manual processes that incur redundant and increased labour cost.
Without modern technology such as the Warehouse Management System (WMS), the warehousing industry also lacks real-time visibility into stock availability and movement which leads to inaccuracy when performing reconciliation between physical stock and account books/system.
E-commerce growth worldwide has stalled slightly post-pandemic, so are we anticipating a higher-than-expected growth rate?
Yes, in fact in our opinion from a technology perspective as an expert in WMS the pandemic has actually accelerated E-commerce growth and forced adoption.
During the pandemic, the majority of the E-commerce consumer has gone through the most challenging phase of the digitalization stage - familiarization.
With supporting statistics provided by DOSM (Department of Statistics Malaysia), the recorded spending in E-commerce for Malaysia during the first quarter of 2022 is RM264.3 Billion while for the same quarter in the year 2023 the recorded amount is already RM291.7 Billion. The increase translates into 10% growth just for the 1st quarter comparison.
Both merchants and consumers are benefitting from round-the-clock opportunities compared to the old-school culture of fixed operating hours.
How would storage businesses introduce automation?
Storage businesses can benefit from multiple angles by introducing automation into the warehousing process. With automation in mind, storage businesses require a Warehouse Management System as the Centre of data processing. WMS is able to obtain and update data swiftly (from and to) all processes in the warehouse. Instruction in the warehouse is provided through push instruction automatically to the floor to ensure governance on stock movement and accuracy of stock status.
With proper governance and accuracy in place, storage businesses also gain the capability to predict and forecast stock and space availability.
For future proofing, automation can also be further enhanced as a step for an end-to-end solution by integrating Advance Shipping Notice (ASN) for inbound and Transport Management System (TMS) for outbound.
What has been the most significant barrier to Malaysian storage businesses digitising?
As per the feedback received from numerous stakeholders in the Malaysian local storage industry, they face challenges pertaining to the necessity of independently procuring and assembling the essential components and solutions for digitalizing their warehouse operations. Malaysian storage businesses have expressed concerns regarding their interactions with vendors offering isolated solutions, particularly in the context of inventory management systems that operate in isolation, lacking integration with other critical elements necessary for a seamless and automated warehouse process. This concern extends to the essential and crucial interconnectivity with various systems and Internet of Things (IoT) devices for ensuring optimal efficiency within the warehousing domain.
What's next for Intelli-Mark?
With over 20+ years of experience as a System Integrator, Intelli-Mark's core objective has always been helping our customers to adopt digital transformation.
We are highly invested in our end-to-end solution especially our own branding 'TheScanHub' that focuses on Automatic Identification Data Capture (AIDC) solution.
As one of the AIDC solutions, the Warehouse Management System (WMS) has had continuous upgrades and enhancements since its debut. Customers can also expect extension modules as well such as Advance Shipping Notice (ASN) and third-party collaboration such as Transport Management System (TMS) to provide a complete supply chain solution.
Aside from WMS, Intelli-Mark is also offering a service solution for our Asset Tracking System (ATS) under the product ATS, software as a service (SAAS). And last but not least, R&D is already on-going for technologies in Artificial Intelligence, Machine Learning and Digital Twin solutions. With these R&D we will be able to provide our customers a one-stop solution with a seamless end-to-end experience
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