44% of companies hesitate - retrofit in logistics: the hidden lever for massive cost savings

44% of companies are hesitant: Are they missing out on the retrofit trend in logistics?

Modernizing existing logistics systems through retrofitting presents a highly attractive option for companies to bring their facilities up to date while simultaneously achieving significant cost savings. This approach is gaining increasing importance, especially in times of economic uncertainty when investments must be carefully considered. Retrofit measures not only offer the opportunity to avoid expensive new acquisitions but also contribute significantly to increasing the performance and efficiency of existing systems.

At its core, retrofitting involves upgrading outdated systems through targeted modernization. This can include replacing control and electrical systems, optimizing conveyor technology, upgrading storage and retrieval machines (SRMs), and implementing modern digital technologies. "Companies that opt ​​for retrofitting are investing in the future of their logistics processes without having to rebuild their entire operations," emphasizes an industry expert. This approach proves to be particularly cost-efficient, as modernizing existing systems is generally significantly cheaper than constructing a completely new facility. Strategically planned investments can generate savings that often pay for themselves within a short period.

A key advantage of retrofit measures lies in increased efficiency. The integration of modern technologies enables companies to control material flow more precisely, reduce sources of error, and increase productivity. For example, automated systems and advanced inventory management software can help optimize warehousing and distribution processes. "Digital transformation in logistics opens up new perspectives for error-free and high-performance operations," explains a specialist analyst. The networking of system components also plays a crucial role here, as only a seamless flow of information between the individual modules allows processes to be monitored and adjusted in real time.

Besides increasing efficiency, retrofitting also offers a significant sustainability aspect. Reusing and upgrading existing structures not only reduces resource consumption but also lowers CO2 emissions. This aligns with the growing environmental awareness in industry and helps companies achieve their ecological goals. "Sustainability is no longer a niche topic, but a strategic necessity," says an environmental manager at a logistics company. By modernizing their facilities, companies are therefore making an important contribution to environmental protection.

Another significant advantage of retrofitting is the flexibility and adaptability of the modernized systems. In a dynamic business environment where requirements and market conditions are constantly changing, it is crucial for companies to be able to quickly adapt their logistics processes to new circumstances. Retrofitting makes it possible to modernize existing systems gradually without having to completely interrupt ongoing operations. This "open-heart surgery" of logistics—a parallel to medicine, where vital systems continue to function during a procedure—significantly minimizes risks and downtime.

Despite all these advantages, many companies are initially hesitant to invest in retrofit measures. Several factors contribute to this reluctance. A significant obstacle is the general economic uncertainty, which leads to cautious investment behavior in many sectors. In times of economic fluctuations and unstable financial markets, companies weigh the risks and opportunities of new investments particularly carefully. In addition, there are often high initial costs, which, while leading to savings in the long term, result in considerable expenditures in the initial phase. Developing customized solutions for a company's specific requirements can be costly and time-consuming.

Another critical aspect is the complexity and lack of standardization within the logistics industry. Differing processes and requirements make it difficult to develop universally applicable retrofit solutions. Companies often have to develop individually tailored concepts to modernize their facilities, which significantly increases the planning and implementation effort. Added to this are internal challenges such as staff shortages and time constraints. Many companies report that they have difficulty initiating modernization projects in a timely manner due to limited personnel resources (49 percent) and a lack of time (47 percent). “The challenge is to manage the balancing act between ongoing operations and necessary modernization despite limited resources,” notes one logistics manager.

Furthermore, many companies tend to adopt a wait-and-see approach. One study found that approximately 44 percent of respondents want to observe how the use of new technologies performs in other companies before investing in retrofitting themselves. However, this hesitant attitude can lead to missed opportunities for increasing efficiency and improving competitiveness.

Despite these challenges, retrofitting logistics offers enormous potential. Companies that have the courage to invest in modernizing their existing systems can sustainably optimize their processes and strategically position themselves for future challenges. Measures in various areas are proving particularly effective:

Modernization of the control technology

One of the key modernization measures involves the renewal of the control and electrical systems. Outdated control systems are being replaced by modern, digital controllers that impress with their high performance. The integration of new interfaces and the updating of warehouse management and operational software enable more precise process control. "By using modern control technology, sources of error can be minimized and operational processes significantly accelerated," emphasizes a technical specialist.

Optimization of conveyor technology

Significant efficiency gains can be achieved in conveyor technology by replacing outdated drives with energy-efficient models. Integrating sensor technology ensures more precise control of conveyor belts and enables real-time bottleneck detection. Modern image recognition systems, incorporated into the quality control process, further contribute to ensuring product quality. Practical examples demonstrate that such measures can increase throughput by approximately 25 percent and system availability by over 20 percent.

Upgrade of storage and retrieval machines (SRMs)

Modernizing storage and retrieval machines also reveals enormous potential for savings and efficiency. Upgrading these systems leads to increased performance and reliability, which in turn reduces energy consumption. Improved spare parts availability and optimized operating processes can result in savings of up to 37 percent. “A more modern storage and retrieval machine not only works faster but also more efficiently – this saves costs in the long run and increases competitiveness,” explains an expert from the automation industry.

Integration of digital technologies

Digitalization plays a central role in today's logistics. The use of tablets and scanners for real-time inventory data capture significantly increases transparency in warehouse processes. AI-supported analysis systems assist decision-making by transforming large volumes of data into valuable information. Networking all system components enables centralized data utilization, which is essential for optimal control of logistics processes. Modern digital technologies not only contribute to increased efficiency but also open up new possibilities in forecasting and planning.

Adjusting the warehouse layout

In addition to technical upgrades, a strategic reorganization of the warehouse layout can lead to significant improvements. Optimizing picking stations and reducing walking distances improves the overall material flow. An intelligent division of storage zones, tailored to changing product requirements, can help accelerate processes and avoid bottlenecks. "An optimized warehouse layout is key to smooth operations – it's worth investing specifically in improvements here," emphasizes a logistics consultant.

Retrofit projects are implemented in several phases, each with its own challenges and timeframes. Smaller retrofits can sometimes even be completed within a weekend. Medium-sized projects, which can take several weeks or months, require detailed planning and coordination to avoid disrupting operations. Extensive modernizations in large companies, on the other hand, can extend over six months or more, especially when large systems are being upgraded.

The duration of a retrofit project is determined by various factors. The scope of the modernization measures plays a key role: depending on whether individual components or entire systems are to be renewed, the time required varies considerably. The need to minimize disruption to ongoing operations also often leads to a phased implementation of the measures. While maintaining continuous operations during the modernization phase, often described as "open-heart surgery," does extend the project, it simultaneously minimizes risks and downtime.

A typical retrofit process is divided into several successive phases. First, a comprehensive analysis and planning phase takes place, which can last several weeks. In this phase, the existing systems are examined closely, and it is determined which measures are sensible and feasible. This is followed by the design phase, in which the future logistics system is conceived and the necessary adjustments are defined. A detailed on-site inspection ensures that all relevant parameters are taken into account before the production and procurement phase begins. The actual implementation of the retrofit measures then takes place in an installation phase, in which the modernized components are integrated into the existing system. Finally, commissioning and a comprehensive testing phase follow, in which the functionality and efficiency of the modernized system are verified.

The strategic importance of retrofit measures is becoming increasingly clear, especially when considering the long-term benefits. Companies willing to invest in modernizing their logistics systems not only create short-term savings potential but also secure their future competitiveness. Through the continuous improvement of operational processes, the reduction of energy costs, and adaptation to new market demands, they are empowered to respond flexibly and innovatively to change. “A well-planned retrofit is not just an investment in technology, but also in the future viability of the company,” summarizes an industry insider.

In addition to purely technical aspects, business considerations also play an important role. The cost-benefit analysis of a retrofit project should always take into account long-term savings and increased productivity. While the initial investments may seem high, the long-term effects – from lower operating costs to increased plant availability – usually outweigh them. Companies should therefore focus not only on short-term costs, but above all on the added value and sustainability of the modernization measures.

Retrofitting in logistics is a forward-looking approach that goes far beyond mere cost savings. It is a strategic investment that lays the foundation for sustainable, efficient, and flexible logistics. By strategically modernizing existing systems, companies can not only strengthen their competitiveness but also actively contribute to a more sustainable and resource-efficient economy. Ultimately, it is the foresight and courage to actively shape change that makes the difference – and retrofitting offers an effective set of tools for this.

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