Plan for 2021? But you might think, “we’re not even finished with holiday season for 2020 yet.” Oftentimes, planning takes a backseat to current pressures or demands (like an unprecedented peak season), but starting the planning process during times of stretched capacity can highlight potential areas for improvement for the following year.

Cataloguing goals, objectives, areas of constraints, and areas for improvement can set the foundation for success in the following year. Leveraging data in the recent 3PL Central Third-Party Logistics Warehouse Benchmark Report, compiled from feedback from 250+ 3PL warehouses, five areas emerged for warehouses to focus on when planning for 2021.

Growth and Profitability Objectives

Start by setting specific goals for 2021. First, look at top level measurements like overall revenue, profitability, growth, and volume objectives, then distill from there how you plan to accomplish your business goals. Will you need to diversify your offerings to achieve the goals or can you do so with your existing offerings? For example, when surveyed about top growth opportunities in 2021, 77% of 3PL warehouses plan to acquire new customers, 65% plan to harness growth from e-commerce, and 54% plan to automate processes in the warehouse. Consider the opportunities you are seeing in the market and how your warehouse can target those areas.

Space and Capacity

Next, ask yourself, does your business have enough available capacity in your warehouse(s) or do you need to expand? If you choose to expand, in what geographies? The year 2020 saw unprecedented ecommerce order volumes. This resulted in a significant increase in demand for warehouse space. According to CBRE, warehouse vacancy rates are at a near all-time low of 4.7%. Compound that by the 41% of 3PL warehouses hoping to add more warehouse space in the next year, 2021 could prove challenging for expanding physical warehouse footprints.

Building out your space and capacity needs now may allow you to better compete to acquire additional space, better optimize your current footprint, or build out a better network for surge capacity or geographic distribution needs.

Workforce Assessment

Once you’ve set your objectives and identified any space or capacity constraints, look to your workforce to understand if you are staffed for your next phase of growth. Also consider your labor costs as a percentage of total expenses. With 47% of 3PLs citing finding qualified workers as a challenge and 58% citing that labor costs increased in 2020, this should be evaluated during 2021 planning. Build a strategy for not only where you plan to recruit new employees, but how you plan to retain and train your existing team members.

Process Automation and Efficiency

With profitability a constant concern for most warehouses, map out your technology investments and automation objectives for 2021. As rents and labor costs increase, finding technology to automate and streamline processes may offer a significant area for cost savings or create additional bandwidth to grow with your existing resources. For example, 72% of 3PL warehouses grew order volumes after implementing a warehouse management system (WMS). In 2021, 31% of 3PLs plan to implement mobile barcode scanning and 30% plan to expand billing and invoicing systems. With that in mind, identifying the areas where automation can remove manual work or improve efficiency may offer the solution to balancing cost and time demands.

Metrics and Measurement

Looking at your key performance indicators (KPIs) during peak season and comparing them to your desired performance will help you confirm whether you have the right objectives for 2021 or whether you need to adjust. Based on your KPI performance your warehouse can identify key areas of improvement. Do pick times need to be improved? Can you improve processes to decrease mis-shipments or chargebacks? Where do you need to improve workflows for increased efficiency? Your KPIs can unearth areas where you need to boost worker productivity or eliminate manual activities in the coming year.

Making 2021 Successful

Balancing peak season demands and 2021 planning may seem daunting, but once your warehouse has evaluated these five areas in your planning process, you’ll have both high-level goals set and detailed objectives to make 2021 a success. Start the new year with a clear objective that the business can communicate to your team and your customers.

Rachel Trindade is CMO at 3PL Central.