As consumers sheltered in place during the COVID-19 pandemic, some supply chains were stretched nearly to their breaking point as people suddenly migrated online for groceries and other goods. In fact, according to website tracker Adobe Analytics, daily US e-commerce sales jumped 49% in the period between March 12 and April 11 compared with the March 1 to March 11 baseline.
Even before the pandemic, increasing technology in warehouses to maximize labor efficiency had been a key objective. However, the situation that emerged in recent months demonstrated a greater urgency to move in this direction. According to a May 4th report in the Wall Street Journal, “tools that had been low on the priority lists for companies’ logistics operations… are drawing attention in industries where thin margins have often left companies clinging to older, highly manual operations.”
As the Coronavirus curve rises and falls over the upcoming months and possibly longer, the big winners will be technology providers. Significant investment in technology and automation will be the heavy focus. In fact, according to a recent survey of manufacturing leaders conducted by the National Association of Manufacturers, 53.1% of manufacturers are anticipating a change in their operations in the coming months. For many, that change will focus on finding the ideal balance between automation and human resources that will accommodate the ebbs and flows of demand in the most efficient manner.
Elastic logistics will become an even bigger priority, especially for smaller operations. In a lean set up, operations are already set up to process inventory in order to maximize labor efficiency. However, that doesn’t allow shifts both up and down to meet changing market demand. Agility to increase and lower inventory levels to accommodate the flux in demand is key. That’s where automation comes in because it allows enhanced technologies to be utilized in combination with human resources. By implementing enhanced technologies, the human resources can shift to manage more strategic responsibilities.
With demand predicted to stay high in e-commerce, manufacturers and online retailers will also be looking at enhanced technologies to optimize their supply chain operations to most efficiently deliver a higher volume of packages to the end consumer. To be fully effective, that technology will need to empower total visibility throughout the supply chain in order to fully enable operational and logistical agility.
Technology for greater supply chain visibility will also be vital to meet the rise in direct-to-consumer expectations. Take the recent toilet paper snafu as an example. Historically, the supply chain of toilet paper revolves around moving truckloads filled with pallets to the store. The store would then break down the pallet for sale to the consumer. Recently, as consumers move online, distribution centers could have been more effective shipping toilet paper direct-to-consumer, but they were not prepared to break down pallets. With 40% of essential items now being bought online, the DC needs to shift operations to be able to break down pallets into smaller units for consumers. Additionally, if there had been total supply chain visibility, hoarding and panic buying could have been prevented.
With the surge in online ordering, other logistical adjustments have become a must in order to meet consumer fulfillment needs, resulting in an increase in "last mile" operations and more trucks on the road. In the future, demand will continue to be on delivery and last mile. Automating label printing, affixing and routing processes will become absolutely essential.
Then there are labels themselves. During the pandemic, consumers stopped caring as much about the name on the label and were happy to find any brand available of the products they sought – online or on shelves. For supply chains as well, the brand on the label may remain less important than what’s in the label, like RFID labeling for example, which enables supply chain visibility around provenance and traceability of goods.
The other implication is for packaging processes specifically in the grocery sector. Grocery chains have been seeing substantial demand and packaging has become a heavy focus as they increase the number of prepackaged and prepared food items for consumers. What they are learning is that it’s necessary to quickly and accurately label these items with mandated information on ingredients and nutrition. The good news is that this can be accomplished quickly, accurately and with minimal labor and easy-to-implement tablet-based technology.
Supply chain executives were presented with significant challenges during the COVID-19 pandemic. They will need to continue to flex their operations in the short-term to meet the needs of consumers, and simultaneously plan their long-term solutions.
Ryan Yost is vice president/general manager for the Printer Solutions Division (PSD) for Avery Dennison Corporation. In his role, he is responsible for worldwide leadership of and strategy for the Printer Solutions Division, focused on building partnerships and solutions within the Food, Apparel and Fulfillment industries. For more information, https://printers.averydennison.com/en/home.html
