Warehousing is just one of the many industries that has been impacted by coronavirus. Despite the devastation the pandemic is wreaking across the world, we are adapting and overcoming every challenge we face.
It’s always a shame to have changes forced upon us by negative events but some of those changes are for the better. They are also likely to last much longer than the pandemic itself.
We think the following changes to warehousing brought on by the pandemic should make warehousing stronger than ever going forward.
Just in time deliveries and lean manufacturing are all very well but even the smallest interruption within the supply chain can impact production. The increase in inventory we have seen across warehousing during 2020 alleviated many of these interruptions.
While holding inventory can be expensive, it prevents interruption to production which is often much more expensive to contend with.
Some warehouses embraced automation as soon as it became viable. Others were a little more reticent. We have seen significant uptake in autonomous technology over the past year.
Whether it’s robots or automated storage and retrieval systems (ASRS), more warehouses than ever have been actively exploring automation and we think that will continue well into the future.
Conveyor systems are nothing new but more warehouses are making use of them for efficiency and to reduce manpower requirements. This has obvious benefits during a pandemic and going forward once things recover.
Used in conjunction with simple but effective Euro stacking containers, conveyors are a relatively low cost, easy to maintain solution for efficient movement of goods in a warehouse.
There is an obvious benefit with having large, well-staffed and equipped warehouses as a central hub. But there are also downsides. Staff shortages, shipping problems and even simple interruptions with picking and packing can have a detrimental effect further down the chain.
We are seeing more, smaller warehouses being planned and developed to help manage that. They will be less prone to significant issues and, if planned correctly, should have overlapping coverage with other warehouses to pick up the workload should something happen.
Significant Rise in 3PL Partnerships
We have seen a gradual increase in 3PL partnerships over the past couple of decades but there has been an acceleration of late. Whether that’s to streamline an operation or take advantage of decentralized or automated warehousing, using third parties for storage and transportation will continue apace.
There are downsides to 3PL partnerships but for now, at least, the benefits far outweigh the costs, especially if you’re one of the lucky few scaling up manufacturing to meet demand.
It wasn’t just the pandemic that increased the appetite for omnichannel distribution. The rise and rise of eCommerce also contributed to it. From picking and packing, shipping to business customers, or shipping to end customers, warehouses have had to adapt to a changing model for supply.
Coronavirus has seen the growth of eCommerce explode with more online stores opening and existing stores doing a lot more business. While the rate of growth may slow after the pandemic, online is the future of retail.
Better Inventory Tracking
We have also seen an increased demand from retailers and manufacturers for much better tracking of inventory. They want to know what’s in stock, what’s on order, when new stock is arriving, and have a much clearer picture of the overall stock situation.
Recent events with computer component shortages are just one of many situations that have driven consumers and businesses to want to know much more about product availability.
We see this trend spreading throughout the industry and continuing long into the future.
Onshoring, nearshoring, reshoring, call it what you will, we see the return of manufacturing and warehousing returning home. It wasn’t just the pandemic but a combination of factors behind this move.
Higher wages in Asia, higher transport costs, delays in shipping, manpower shortages, increased fuel prices and other influences are driving a move towards bringing warehousing home, or closer to the manufacturers they supply to minimize costs and delays.
Better Contingency Planning
Warehousing has always been at the forefront of planning for its own benefit and the benefit of the business it supplies. The rise in demand and the supply chain challenges we have faced over the past year has highlighted the need for better flexibility and planning from the industry.
Planning for excess inventory, abandoned production, paused production, inventory shortages, manpower shortages and other situations will all have to be thought out much more clearly. They also have to be communicated more clearly with customers.
Closer Relationships Between Warehouses and Customers
We have strong, close relationships with some customers but remote, purely transactional relationships with others. We foresee future relationships to be closer going forward.
Warehousing will need more from customers and customers will need more from their suppliers. That demands a closer relationship between the two to facilitate this way of working.
It’s a real shame that it takes a global pandemic to push our industry so far forward so quickly. Yet here we are.
The good news is that these changes can be taken further forward after the pandemic to drive innovation and efficiency and transform warehousing so it can better meet the challenges of tomorrow!