Virtual Summit: Continued success in the face of disruption
The modern warehouse has been dealing with double-digit e-commerce growth, persistent labor constraints, and omnichannel distribution challenges for years. When COVID-19 was added to that list of complexities in early 2020, warehouse and DC managers found themselves operating in unfamiliar territory.
Shutdowns, social distancing, and other obstacles would prevent some companies from reaching their full potential, while the work-from-home/shop-from-home trend would push others to new heights. As the market recovers and demand resumes across many industry sectors, flexibility and scalability of warehousing operations will be more important than ever.
To adapt, companies are putting a premium on the adoption of software, flexible automation, mobile solutions, and emerging next-generation technologies. For this year’s Virtual Summit, Modern Materials Handlings editorial team put together a group of sessions to help warehouse and DC managers navigate disruption and find success in our new, digital world. Here’s a synopsis of each session and the key takeaways.
KEYNOTE – Enter the new labor landscape turning crisis into opportunity
Pre-COVID, labor availability was a top challenge for warehouse and DC operators, who are no strangers to issues like high employee turnover and labor shortages. But even as automation made inroads to complement human workers and reduce perennially high turnover, the need for labor persisted.
When COVID reared its head, record low unemployment numbers were suddenly flipped upside down. This presented a once-in-a-lifetime opportunity for companies to rebuild their workforces by promoting essential, stable, and well-paid careers in materials handling, logistics, and the supply chain.
In her keynote, Sara Gordon, head of national account management at Adecco USA, explores strategies to attract and retain labor and talent in an unprecedented job market. “The COVID-19 pandemic has created an opportunity for us to reimagine the workforce,” says Gordon.
“The coronavirus has certainly been a major wakeup call for the world of work, and while economies may have slowed down,” she continues, “the pandemic itself is really that catalyst that we need to reinvent and reimagine the future of work.”
To do that, Gordon says companies should move away from standardized solutions and get more creative with their employee recruitment and retention strategies. Throughout the presentation, she hits on these key steps to success: embracing technology and innovation; creating happy and productive employees; being flexible employers; and facilitating lifelong learning.
“When developing solutions, it’s important to think about the human side of things,” Gordon points out. “Step into the shoes of your workforce and ask yourself ‘What are we doing to make sure our workers truly come first?'”
Gordon sees technology and innovation as the keys to adapting to new COVID-19 standards. For example, she says companies can leverage artificial intelligence (AI) in recruiting and throughout the candidate lifecycle when interviews can’t be held in person. Employers can also use chatbots to communicate with potential talent—a strategy that Gordon says is sometimes more effective than actual recruiters (and they’re available 24/7).
“The pandemic is an opportunity for employers to hit the reset button on traditional workforce practices,” Gordon concludes. “This sudden and dramatic change in the workforce landscape has accelerated emerging trends such as flexible working, emotional intelligence and leadership, and reskilling and upskilling to the point where they are now fundamental to an organization’s success.”
Session I – Automation: Have faith in the leap
The same automation that was already helping companies solve their most pressing pre-COVID fulfillment problems is now poised for mass adoption. Automated storage, mobile robots, cobots, and the related software play a vital role in helping operations manage disruption, support current and future employees, and preserve service levels during the recovery and for many years after.
Finding the right automation for the application requires thoughtful, upfront consideration, but time is of the essence. In this session, Ian Hobkirk, founder and managing director at Commonwealth Supply Chain Advisors, discusses how automated solutions are transforming warehouse/DC operations; explores how automation can best be applied; and offers a roadmap for how operations managers can create a plan to make sure the investment is on target.
“Pre-COVID, the business case for automation was already fairly strong, and the benefits of automation were well documented,” Hobkirk explains. “In the beginning (March/April), there was supply chain paralysis, especially as warehouses were shut down overseas. Then, it shifted to a demand problem as stores were closed and some areas were in lockdown. Now we are in a ‘cautious recovery’ period.”
Along the way, warehouse labor costs have steadily been rising along with labor-related health risks. E-commerce has become a lifeline for consumers and companies, Hobkirk adds, but not all DCs were equipped to handle the onslaught of online orders during the pandemic. “Anyone that was selling products in a store pre-COVID had to scramble to revamp their e-commerce strategies,” he says.
To companies that found themselves in this position, Hobkirk says the key technology components to consider include warehouse management systems (WMS), labor management systems (LMS), and best-of-breed slotting software. The latter helps determine the optimal bin location for every item in the warehouse, with an emphasis on grouping fast-moving products together. “If your slotting is getting too complicated on a spreadsheet,” he adds, “you should look into slotting software.”
Acknowledging that warehouse automation isn’t the “be-all/end-all” solution for supply chain transformation, Hobkirk reminds attendees that it can make a real difference in a company’s fulfillment operations. “Companies considering automation should begin by defining improved processes,” he adds, “and then deciding if automation can enable these processes.”
Session 2 – Robotics: Risk management before, during, and after a crisis
As they reimagine their operations for a post-COVID world, companies are focusing on developing stable, sustainable, and seamless upstream supply chains. One thing standing in their way right now is the availability of labor to support warehouse operations under enhanced physical distancing and safety norms.
For many companies, intelligent and interconnected automation is key to tackling short-term tactical challenges (i.e., labor volatility) while absorbing overall supply chain disruption. In this session, two of the market’s leading robotics analysts discuss how digitally enabled robotics are a critical piece of the solution and explore how organizations can enhance their efficiency and resiliency.
Jordan Speer, research manager for IDC Retail Insights, and Sampath Venkataswamy, research manager for IDC Manufacturing Insights, talk about the role of robotics-as-a-service (RaaS) as a solution to the labor crunch. They also discuss how to manage automation’s lead times and related process optimizations, and how robotics can help businesses plan for and nimbly respond to the unexpected.
According to Speer, IDC has been conducting a biweekly market sentiment survey since April to gauge sentiment around COVID-19 impacts. Overall, U.S. organizations are optimistic, and there is an even brighter picture for 2021. “This more positive outlook probably comes from the more essential industries,” Speer points out.
The speakers spent time deciphering the role of robotics and predictions for robotics in the future, noting that technology investment priorities right now include AI, machine learning (ML), Big Data analytics, and robotics.
“These four are the building blocks for automation and are expected to hold for the next two to three years,” says Venkataswamy.
When it comes to supply chain risk, the speakers say robotics is a core part of automation and supply chain technology.
“A lot of people think ‘job loss’ when they hear automation, and while it is important to consider, these robots can also make jobs easier and more fulfilling,” says Speer. “Automation often takes over dangerous and taxing tasks and frees up people for more strategic things. These technologies are made to work alongside humans and to enhance their jobs.”
Session 3 – Supply chain execution software: The full measure of a plan
Especially amid disruption, supply chain execution (SCE) software is essential to the efficiency and productivity of modern supply chains. For warehousing and distribution operations, end-to-end supply chain visibility increasingly includes software integration with upstream and downstream systems, as well as granular data analysis inside the four walls.
In this session, Bryan Jensen, chairman and executive vice president at St. Onge Company, and Howard Turner, the company’s project director, discuss how companies of all sizes can use SCE to drive efficiency and flexibility while proactively positioning themselves for success.
Turner kicked off the session by reviewing the current key drivers behind technology investments, including:
- E-commerce, evolving order structures, and customer expectations;
- Disruption avoidance;
- Shrinking warehouse labor pool;
- Reduce safety risks; and
- Big Data.
In discussing the automation systems that exist in the warehouse today, Turner points to shuttle systems, autonomous vehicles, unit sorters, and robot pickers, stocktaking, and thermal cameras as some of the more popular choices. “Each one of these pieces has a sophisticated software behind it that allows it to operate in the warehouse and among workers,” he says.
For example, autonomous vehicles rely on software that learns the environment and ensures the most logical route while updating inventory in real-time. For unit sorters and robot pickers, software helps the machines learn to handle products and fill orders accurately.
“All of these tools are great, but they need to all be on the same page and working together,” says Jensen, who points to warehouse execution systems (WES) as the “orchestra conductor that brings it all together.”
Turner ends the session by giving advice on how to undertake an initiative to expand the use of warehouse automation and plan for the future. He also tells why organizations fail in this area. “You can do everything right and pick the right solution and implementation,” he explains, “but it will fail if the people involved aren’t on board.”
Session 4 – Mobility and voice at the edge
In today’s fulfillment environment, mobile technology and edge computing offer the enhanced performance needed to improve responsiveness. Voice technology plays a valuable role as well, enabling rapid onboarding, high accuracy, and optimal productivity.
In this session, David Krebs, executive vice president of enterprise mobility at VDC Research shares the trends that are driving the use of mobile devices.
Krebs also outlines the applications best suited to mobile, voice and wearable technologies, and explains how warehouse/DC operations are leveraging insights from the edge to track productivity, improve accuracy and accountability, and streamline inventory and the flow of goods.
In assessing the impacts of COVID-19 on warehousing and logistics, Krebs says these five trends stand out right now:
- Permanent behavior shifts to online and delivery across all customer segments.
- Greater emphasis on workforce management and the connected essential warehouse worker.
- Growing emphasis on automation to offset labor challenges.
- Continued Android migrations (warehouse is lagging behind other sectors).
- Harmonization of labor and technology to optimize productivity.
“There’s a lot of pressure being applied through the logistics industry,” says Krebs. “With the COVID-19 disruption, companies with the most visibility were best positioned to pivot effectively.” While labor will continue to be a focal point for companies, Krebs says other priorities will include fulfillment flexibility, same-day shipping, and inventory visibility and accuracy.
“These have led to a greater emphasis on workforce management and the connected essential warehouse worker,” says Krebs. This, in turn, has pushed more companies to invest in mobility and voice within the four walls of their warehouses and DCs. In return for those investments, companies get better speed, accuracy, and visibility; access to overall technology modernization; and improved labor optimization.
Session 5 – Hyperlocal fulfillment takes flight
Already underway pre-COVID, the push to bring fulfillment centers closer to the customer-and effectively whittle away at any “last mile” gaps-is now ramping up to new levels.
Known as micro-fulfillment or hyperlocal fulfillment, this emerging concept relies on a network of small fulfillment centers located very close to consumers (or inside existing retail locations) that can profitably complete same-day orders.
The concept was developed in response to growing e-commerce fulfillment and shrinking brick-and-mortar sales. COVID accelerated the movement, which is now taking flight.
In this session, Dwight Klappich, vice president of supply chain research at Gartner talks about the fundamental groundwork for developing proper, profitable, and sustainable hyperlocal networks.
Klappich also discusses how the “Amazon Effect” has created a new standard for consumers in terms of price, speed, simplicity, assortment, and delivery. “Amazon has fundamentally changed the way people think about interacting with businesses today,” says Klappich.
For example, people expect free shipping and fast deliveries-an expectation that’s impacting businesses across industries. Some companies are responding by setting up hyperlocal fulfillment sites that significantly cut down on the time it takes to deliver orders and the amount of money it takes to ship and handle those orders.
For example, automated micro-fulfillment centers can use robots to fulfill orders and also comply with social distancing. Klappich talks about two companies that are already doing this and gives a glimpse into how this approach could play out in the future. He also notes that hyperlocal isn’t just for retailers, and gives examples of how the strategy is working in the food and beverage, telecom, and third-party logistics industries.
“Hyperlocal is the new normal, especially as we move from the analog generation to the digital generation,” Klappich concludes. “This is not a temporary phenomenon; we see the potential for a lot of continued innovation in this area.”
This article was written by Bridget McCrea from Modern Materials Handling and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.
