As the world tries to grapple with the past 1.5 years of the ordeal that global citizens went through and as they take small but significant steps towards the ‘new normal’, hope remains prevalent among the masses towards a much better tomorrow. But though people might feel that there will be a day when everything goes back to the way it was before, the same might not be the case for a lot of businesses and their logistics setup. None of the global business experts have ever thought that the predictions for the logistics industry’s next 10-year plans will be accelerated to such an extent due to the pandemic woes. Similarly, as warehouses faced the ripple effects of the pandemic, with many being left with inventory challenges due to the impact of Covid-19 on supplier countries or their fulfillment struggles due to sudden surge in e-commerce sales due to the lockdowns and much more, logistics leaders are more and more inclining towards accelerating their plans for warehouse digitalization.
But what were the main pandemic warehouse woes that fuelled this digital wave and what are the latest technology trends that the business leaders of today can look up to for eliminating those woes in the future? Here is a sneak-peek into what I feel are the major turnaround point for global warehouse operations in the pandemic.Struggles of warehouse labour shortage
In the earlier 2020 itself, warehouses were struggling with the challenge of hiring substantial workers for their daily operations. According to Zebra’s 2024 Warehousing Vision Study, labor recruitment and worker productivity were top challenges for 60% of warehouse operators. This along with the Covid-19 social distancing guidelines, worker safety rules, and upsurge of e-commerce orders, warehouses during the past months were in a lot of distress in ensuring proper order fulfilments and meeting up to the customer expectations. Though hiring of extra warehouse personnel has picked up recently, but supply chain leaders have all agreed on one point, that having enough hands in the warehouses is just a part of the solution. Productivity and efficiency-boosting technology or tools need to augment the warehouse workers of today to get the best out of the current situation, trends and to prepare them for the future.
Some of the technological trends that are garnering more interest from leaders across the globe to tackle these woes are:
Labour Management solutions: Not always are the warehouse workers working to their true potential, it’s not just about their productivity but also the lack of awareness of the optimized process execution standards, without which the execution time of activities in the warehouse is fully dependent on the worker and cannot be measured against any prevalent data. So though worker shortage is a major concern, leaders have still taken into consideration the immediate requirement of optimizing their existing workforce for well-equipped process execution standards and enhanced productivity. They are looking to increase their visibility into labor metrics, giving them enhanced scalability options and better decision-making when it comes to task assigning.
Rise of the robots and warehouse automation: This worker shortage issue has fuelled the hopes of a highly automated warehouse setup. And today’s AI and sensory guidance-enabled robots are more than just the answer for this crisis and it’s the new class of tools to augment today’s warehouse workforce, for enhanced efficiency and improved process execution capabilities. From Automated Mobile Robots (AMRs) for pick and place activities to smart robotic sorting to the intelligent robotic packer are here to augment the warehouse operators and also help warehouses tackle the labor shortages or demand spikes. As per the reports, by 2025, we can expect 50,000 robotic warehouses, with the installation of over 4 million robots worldwide. Similarly, automated storage and retrieval systems (ASRS) are now finding more usage due to their capability of recovering up to 85% of existing floor space when compared to standard shelving. Combined with integrated WMS software and pick-to-light systems, the ASRS can help warehouses tackle labor shortage issues quite skilfully. .
The pandemic has put the issue of unoptimized inventory management to the main perspective and has brought out all the challenges and gaps of global warehouses. The sudden changes in the buying patterns of the consumers with items like sanitizers, paper goods, or bottled waters flying off the shelves while significant sales drop in a lot of major high-selling products of the past years, created a lot of worries and brought out major flaws in the current inventory setups for the warehouses across the globe. Even the upsurge in e-commerce or online sales or even increase in demand for 1–2-day delivery brought forward many order-fulfillment challenges for the warehouses. But most of it all went down to the issue of improper inventory management and distribution flaws. Some of the technological trends that are garnering more interest from leaders across the globe to tackle these woes are:
Better demand planning and AI-driven forecasting solutions: Though most of the pandemic buying behavior was nothing that can ever be predicted, but many warehouses globally are still struggling with the demand fluctuations even 1 year after this happened. So, there is a certain problem with the demand forecasting methods used by most of them, they are either too orthodox and old school with no place for adjustments based on current scenarios or are lacking the correct self-learning tools to improve the forecasting model based on the current trends. Hence, business leaders today are looking for solutions that have in-built capabilities to tune in to current trends, demand fluctuations, and more to feed their AI-powered systems and giving warehouses scenario-driven approaches to demand forecasting capabilities. Thereby warehouses can be equipped with better decision-making power when it comes to inventory stocking.
Modularized WMS features and focuses on models like WIP: A recent trend that has been seen is that more business leaders now are opting for modularized and more customized versions of warehouse management systems, mostly to integrate certain business models that they need immediate help with, rather than going for full-blown system implementation. Though the nudge towards WMS adoption has been quite great, but many warehouses feel that it is a huge task and change that can somewhat disrupt their operations in these pandemic times and they are looking for modularized versions of the solution to help them fill in the immediate gaps and for a seamless transition step by step to a more digitalized warehousing structure. Due to the uncertainty of supply chains, many manufacturers realized that they were having more WIP stocks now than they are equipped to handle, due to delays of part arrivals and others. They soon realized that most of the warehouses were not ready with solutions to visibility and tracking of the WIP stocks in a more efficient way. They didn’t want an immediate overhaul of the warehouse management process but needed a more modularized version of the WMS to handle stockpiles of WIP so they aren’t damaged or lost while they wait to be completed. We have also recently seen clients getting interested in our modularized and customized versions of the logistics platforms to help them get onboarded faster and plug in their immediate gaps.
Cloud-based WMS solutions for decentralized warehouse structures and scalability: As the e-commerce/online sales have started increasing a lot due to pandemic (reports say that online sales in 2020 increased more than 70% compared to 2019), a lot of warehouse experts are focusing on a decentralized warehouse structure and introduction of more micro-fulfillment centers to help cater these customers. These are the customers who are not only focusing on online shopping due to pandemic but a good amount (almost 35%) of them are found to have permanently shifted to this medium of shopping as per the latest reports. With the rise of these consumers, there is another issue that has been troubling warehouse operators and businesses, the rise in delivery expectations. Most of the online shopping audience, expect expedited deliveries, resulting in added pressures on the order-fulfillment departments. Thus, manufacturers today are seeking to decentralize their warehouse locations. The proximity to their main consumer hubs helps them in decreasing the transportation costs, provide expedited shipment deliveries, and reduces the risk of supply chain disruptions. But most of them are now focussing on either creating satellite distribution centers (new or transforming existing assets) or are relying on 3PLs to help them in this aspect. But with all this decentralized structure, it means disparate data systems which tend to call for another chaotic structure. Hence cloud-based WMS solutions have been the pick of the wishlist for logistics leaders. The cloud-based architecture gives them the flexibility to provide access to different decentralized centers and ensure high visibility across all inventories at hand and ensure proper management.
As we settle into our post-pandemic lives, supply chain leaders are taking the experiences of these past several months into their next phase of the transformation of their warehouse and distribution center operations. They are turning to technology-based solutions to help them make their warehouses more adaptable and flexible.
What were the pandemic woes that got you worried and what are the steps you are taking to overcome them in the future? Tell us more in the comments sections.