1. IntroductionWith ever-changing customer demand, retailers who focus on end-customer-oriented operations are faced with several challenges in terms of warehouse operations. Shanghai retailers, dealing with a large amount of foreign competitors and a relatively low level of technology adoption, are facing serious challenges in warehouse operations.2. Two current warehouse operational challenges faced by retailers in Shanghai. 2.1 Warehouse Operational Efficiency With increasingly paying changes in customer purchasing preferences, warehouse operational efficiency is highly required to reduce new product introduction times worldwide and ensure rapid market penetration. In recent years, product introduction times have been reduced by nearly 50% (on average) every five years. While in some sectors this rate of change has been less drastic, in others the rate of change has been even more rapid. In the automotive industry, for example, new product introduction times went from around 60 months to a target of around 18 months – a steep reduction of around 70% from the mid-1980s to 2003! In several industries, the total time taken to bring a new product to market can be the critical difference between a successful product and a poorly performing new product. Therefore, retailers who take the responsibility of providing products and services to consumers for personal or family use play a crucial role in saving time. Shanghai retailers, facing stiff competition from foreign counterparts, are grappling with the challenge of operational efficiency. It is not unusual for us to find that when we shop in some relatively smaller supermarkets in Shanghai, some categories of new products are not present and even worse is that it is not known when these types of products will be available in stock. However, the same circumstance in some foreign counterparts, such as Wal-Mart and Carrefour, is completely different: as long as you want, you can find any kind of product with various choices and abundant supplements. This embarrassing situation highlights a serious challenge for Shanghai's retail sector, says the warehouse's high operational efficiency. Defects, transportation, human movement, waiting, four wastes say, are prevalent in today's warehouse operations. “Many retail operations continue to suffer from significant inefficiencies, as forklift operators waste time and resources hunting and digging, because they do not have adequate information on the location of items and the optimal route for put-away actions, replenishment and recovery,” says Michael Giuliano, the President of Meridian. Imagine that 2.5 minutes are wasted during the average recovery cycle and that figure is multiplied by hundreds or thousands of cycles per week.