Warehouse trends: What should be the distributors’ focus?

Warehouse trends: What should be the distributors’ focus?

Warehousing is at the core of many economic sectors. Consequently, the more efficient the entire supply chain functions, the better the chances of maintaining profit margins. However, changes related to the aftermath of COVID, emerging technologies, and external conditions, are creating a highly variable environment that affects warehouse performance. In this article, I will talk about warehouse trends and point out ways to deal with them.

Warehouse trends: Warehouse automation and new technologies

We have extensively discussed the importance of warehouse automation. We have also analyzed the impact of new technologies in a distribution operation. These are the ones that are having the greatest impact:

• AI and robotics
• Internet of Things (IofT)
• Block chain

Automation is the key response to address these emerging technologies:

• Automate warehouse processes through a Warehouse Management System or Inventory Management software aligned with the technological trends.
• Automate delivery routes
• Automate the back office by integrating your ERP or accounting software with the Warehouse Management System and Route Management software selected.
• Automate everything that you can automate by taking advantage of advances in the emerging technologies, such as AI technologies to minimize labor in the warehousing process; robots that perform picking in a warehouse, etc..

Warehouse trends: Resilience

The problem with changes stemming from emerging sectors is that they are unpredictable. The best way to deal with this scenario is to transform your operation to be as resilient as possible. In our article on “Resilient Organizations” we stated the importance of wholesalers and distributors to “lighten up” their structure as a way of coping with changes in the environment. This statement is more valid now than ever. Below we reproduce the image that illustrates the concept.

Warehouse trends: Operational Disruptions

One thing that COVID proved without doubt is the impact of a wholesale operation disruption. They can be logistic disruptions, hiring difficulties, safety threats, sales disruptions, illness, etc. The only way to counteract these events is by incorporating automation elements, redundancy, multi-channels and strategic alliances into the business plan.

Warehouse trends: Labor changes

Labor availability has changed significantly in recent years and seems to continue to do so. These changes have two sides:

One side is labor shortages. According to a recent survey from Modern Shipper, 73% of warehouse operators can’t find enough qualified labor. This represents a 26% increase over 2021.

On the other side it is the composition of the labor force. This also has two sides:

• Immigration has skyrocketed in recent years and many of them are able and willing to work at lower rates.
• Millennials (born between 1981 and 1996) are rising to leadership positions in warehouses as the older generation retires. Having grown up with the new technologies, their expectations and methods are different from those of their predecessors.

If you operate in a multilingual city you can benefit from legal immigration and, if you are in the wave of trying new technologies, millennials can be beneficial.

Warehouse trends: Omnichannels

In previous articles we have explored the addition of a B2B ecommerce channel as a new means of coping with trends and avoiding losing sales. This trend has not only continued, but has broadened. With end users demands for more fulfilment options, retailers are shifting some of these responsibilities to distributors.

Warehouse trends: Increased portfolio

Consumer expectations are driving a trend toward inventorying a larger number of product varieties. In the past, distributors discontinued slow-moving products, but nowadays they fear that, by doing so, they will lose customers that buy other high-volume items along with low selling ones. The best way to address this trend is a combination of alliances, multi-channel, partnership and outsourcing.

Warehouse trend: Cybersecurity

After COVID, work habits changed, with some employees working partly from home and partly in the office. This poses a menace to information security. An increased focus on cybersecurity will be another trend that supply chain leaders will experience in the future. The ultimate goal of all cybersecurity efforts should be to strengthen customer trust. Possible ways to deal with that:

• Review the security protocols of your suppliers. 
• Update all third-party software frequently.
• The risk of Cyberattacks can never be fully eliminated. Therefore, preparing your team for the attack can be a beneficial investment.
• Conduct cyberattack training programs.

I hope this article has been helpful to you. I will continue to post information related to warehouse management, distribution practices and trends, and the economy in general. If you are interested in this article or want to learn more about Laceup Solutions, please subscribe to stay updated on future articles.

There is a lot of relevant information on our channel. Check out this video on warehouse location.