10 Ways How COVID is changing Warehousing & Distribution Forever
COVID has grabbed headlines around the world in recent years. One of the biggest questions arises is how this pandemic situation is changing warehousing and distribution. With a massive impact not only on warehousing and distribution but also on industry processes as a whole, COVID is altering how we look at warehousing and distribution.
Warehousing and distribution has always been notoriously difficult, especially in the face of large seasonal fluctuations. This is even harder when you have to consider that weather and consumer demand are becoming increasingly unpredictable. However, while the warehouse has always been a high risk environment, these conditions can be even more precarious during COVID outbreak. Here is how:
- Increased customer demand & decreased supply: The ramifications for supply chain professionals have been monumental. Due to increased customer demand and decreased supply, many organizations were unable to keep up with demand and most scrambled to acquire inventory. A sudden increase in demand meant that warehouse managers had less time to react and plan required hiring for additional employees (human resources), training employees, capital investments for technology and modifications to support the influx in products.To combat this, warehousing and distribution organizations must find ways to anticipate consumer demand before they see it on the ground floor – and that means adopting supply chain visibility strategies that allow their warehouse management systems (WMS) to communicate effectively.As a result, warehouses and distribution centers are making changes in technology, services, and operations to avoid these pitfalls in the future. Warehousing and distribution has been changed forever by the crisis, and if the industry is to continue to grow – however slowly it is now – there’s more change ahead.
- Need for increased flexibility: As the warehousing industry faces a growing list of challenges on both supply and demand sides, the need for increased flexibility in warehouse and distribution operations becomes critical. A critical element of this increased flexibility is achieving more effective inventory management at each stage of inventory flow – picking, shipping, and receiving.
- Continued Social Distancing: Social distancing will become commonplace regardless of Pandemic. Masks and sanitizers will remain our part of daily life where physical interactions will be lesser. Thus the need for digitization comes in.
- Inventory Challenges: Today, manufacturers are taking a new approach. Instead of just-in-time inventory strategies, manufacturers are now working with their distributors to have more products on hand. Keeping more inventory on hand are the best practice for business survivalA handful of forward-thinking supply chain leaders saw the potential for using COVID as a driver for change and learned to rethink their warehouse and distribution strategy. These companies undertook massive transformation programs and emerged not only with lean supply chains, but leaner, faster, higher-performing supply chains.
- Increasing usage of Warehouse Automation: Shippers have been slowly increasing their use of Warehouse Automation Systems. Today, proponents of warehouse automation tell us: you should consider your existing warehouses as an investment and improve them with warehouse automation solutions. This is why it’s the right time to roll out warehouse automation solutions into your distribution centers.There is now increased use of automation used to automate the movement of goods on conveyor belts throughout the warehouses themselves. To keep goods moving through warehouses, there are automated pedestals, robots, and conveyor systems being used.
- Scalable Processes & Effective Strategies: The logistics and supply chain industry right now is in a state of flux as we can see the merging of generations of technologies. These changes are making their way into warehousing, logistics, and distribution to create a new breed of scalability that allows for more efficient planning and decision processes for mid-sized companies. The scale of today’s businesses is growing, worldwide especially, and they need processes that allow them to thrive but that also allow the same opportunity to branch out and grow.
- Increased Warehouse Capacity: Warehouses will need more capacity post-COVID due to many reasons. In order to meet increased demand, and keep increased inventory on-hand, Keep additional space for social distancing – all are leading to more storage locations and more capacity requirement in near future.
- Adapting to Omni-Channel Distribution:
Due to COVID, the changing nature of warehouses shifts to meet Omni-Channel distribution demands. What used to be a four walled building where workers picked cases for retailers to fill has now become an open, versatile space where items are being packaged for end customers. Omni-Channel distribution enables you to serve your consumers as per their expectation, allows them to purchase from anywhere (in-store, online) and get their order delivered where they’d like (ship to home, pickup in-store, curbside pickup, ship to return/ return in-store).
- Shift in Importance on Inventory Visibility: With the demand for faster delivery, the companies started decentralizing their warehouses or leveraging retail stores for distribution. Inventory visibility throughout the supply chain takes on new importance due this shift in demand.
- Increase in Cold Storage: The impact of the pandemic caused some sectors of eCommerce to grow at a faster rate. One of such fastest growing eCommerce sectors is grocery. Grocery is essential to all consumers. They struggle for online grocery pickup times when COVID hits first. Till today, many consumers prefer to shop grocery online, or online pick up to an in-store visit.
Warehousing and distribution centers will have to consider a multitude of factors when creating their post-pandemic plans. The status of the supply chain, public perception, and how they can be as prepared as possible will be at the forefront. This type of mindset has never been necessary before, so that means these facilities will need to think outside of the box.
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