You can’t get through a workday without hearing the word “disruption.” While business is ever-changing, we’ve all seen how the rate of change since early 2020 has disrupted and accelerated the evolution of business. Let’s explore three of the most prevalent disruptions that all companies throughout the supply chain must face and overcome.
The Need to Improve All Human and Automated Labor
People will always be the core of every company’s success. The past two years have taught us the importance of labor retention. For long-term success with your company’s talent, you must offer competitive wages, enhanced benefits, as well as a strong culture and work environment to take care of your permanent employees and ensure high retention rates.
And, the continued growth of robotics and automation will provide a key supplement to your labor to help boost overall productivity and efficiency. No longer solely for the domain of large companies, the price of robots for distribution centers and warehouses of all sizes can start under $10,000 for some models. Advancing artificial intelligence, lowering replacement part costs, and other factors have contributed to making robotics a near-term cost-effective option.
The prevalence of more lower-cost robotic options has caused the recent surge in sales. The Association for Advancing Automation reported that the North American industrial robotics market had a 37% increase in units sold during the third quarter 2021, with the food and consumer goods segment seeing a 43% increase. In addition, warehousing is one of the segments that A3 President Jeff Burnstein noted is an “emerging” market for robotics.
Retail operations also have high robotic adoption rates, taking advantage of benefits such as better cube utilization and improved facility redundancy.
Automation also saves time. In non-automated warehouses that approach one million square feet, up to 30% of employees’ time is spent simply traveling between work areas within the facility to do their job. Retail, health care, and high tech and other industries that have incorporated robots for picking and taking items to packing locations use what’s called a “goods-to-person” application, where people finish the process. This approach streamlines the overall logistics process.
And those investments in robots and automation are paying off for many. For example, Brazil, Dafiti Group’ LEAP 581,250 square-foot (54,000 square-meter) fashion and lifestyle warehouse for e-commerce operations has seen great process improvement by adding automation and the software to run it. For the automotive portion and its 500,000 SKUs, approximately 300 robots are incorporated into its automation system, which has made process picking time three times faster while increasing throughput per hour by 400%.
Sustainability Will Be Key
Consumers’ awareness of and concern about social issues, driven in large part by Generation Z, is spurring a focus on sustainability in every business; it’s no longer just a “nice to have” aspect.
An Oxford Economics survey found that 73% of consumer products executives have sustainability as a “major concern or top-of-mind at all stages of the supply chain process from planning, design and R&D, through manufacturing, logistics/delivery, and product maintenance – far more than the total from all industries,” according to a Forbes contributor.
For a consumer focus, sustainable packaging is growing at a compound annual growth rate of 10.3% in the US through 2027 to top $305.31 billion, says Market Research Future. The industries driving this growth are expected to be in food & beverage packaging, personal care, and medicines.
Warehouse design is another area where companies can be sustainable, as energy costs often account for 15% of the operating budget. Renewable energy can help minimize those costs and boost building efficiency, such as by installing solar panels on roofs and using renewables for heating and even power forklift trucks. Upgrading lighting to more efficient LED bulbs also is recommended.
Adding Virtual to Your Digital Transformation
While digital transformation is not new to the supply chain, many are still struggling to integrate their warehouse management and other legacy systems with current technologies to offer true end-to-end visibility for real-time decision-making.
Today’s digital supply systems need to focus on customers and be flexible to anticipate – let alone react to – changing consumer habits, government regulations, and other ongoing disruptions. A lot of this flexibility will come from having a WMS that integrates with cloud technology.
Your digital supply chain system must also be adaptable to the coming virtual realm: the metaverse. Many may simply view the metaverse as nothing more than an immersive, 3D gaming opportunity. However, metaverse technologies – transforming physical worlds into digital, virtual ones – will offer 3D representations of how products are produced, maintained and distributed, sold and delivered.
Rather than traveling for meetings or waiting your turn for quotes and input into a manufacturer’s new product, you will meet virtually directly with your upstream and downstream supply chain collaborators.
The metaverse will ensure trust and transparency among all stakeholders as they will be able to collaborate and be aware of need-to-know details such as lead times, transit times, any shipping delays, and even real-time shipping costs.
And, for that next distribution center you need to build to accommodate growth, the 3D metaverse will enable more efficient design, with collaboration from internal employees, sustainability, logistics, and other key groups. The metaverse will enable you to “build” your new center in an immersive, 3D model before ever breaking real dirt.
If recent years have taught us anything, it is that change is constant. But change is also exciting and offers fertile ground for innovation and the reminder that each of our own successes is dependent upon the need for teamwork up and down the supply chain. After all, a well-oiled supply chain will ensure your long-term success. And that is the only way we can disrupt the forthcoming disruptions.
Brendan Heegan is the Founder of Boxzooka Fulfillment. He has over 20 years of experience in transportation and 3PL distribution. Brendan started his career in logistics with Airborne Express, rising through the ranks from sales in New York City’s Fashion District, to directing international trade lanes for DHL Express between the US, Europe, Mexico and Canada. In 2014, he founded Boxzooka, a technology-focused 3PL specializing in online apparel and wholesale consumer product distribution, with a top tier warehouse management system it also licenses. Brendan started Boxzooka because he saw a need for better solutions to solve the complex problems faced by online and retail sellers.
This article originally appeared in the May/June, 2022 issue of PARCEL.
