Last week I had the opportunity to speak with Markus Schmidt, President of Swisslog Americas, about warehousing in today’s environment of rapid and often unpredictable change. The coronavirus pandemic exerted widespread impact on order fulfillment operations. But even prior to the pandemic, warehousing and fulfillment were evolving rapidly due to a number of factors, most notably the transition to direct-to-consumer fulfillment. I asked Markus for his insights on a few targeted topics. First off, I asked Markus for his perspective on the pandemic’s long-lasting impacts on supply chains. How about all the buzz around grocery delivery? Is that trend expected to continue? Secondly, labor shortages were a major factor prior to the pandemic, but has the coronavirus change that dynamic? Third, rapidly evolving fulfillment needs are now evolving even more rapidly. How can warehouse operators make sure they choose technology that will fit their needs well into the future… to be “futureproof.” Finally, what wisdom can you provide to companies embarking on their automation journey today? Below are some key points made in the discussion. Watch the attached video for the full interview.
The Pandemic’s Long-Lasting Impact on Supply Chains
Trends that were emerging before the pandemic – ordering more online, smaller order quantities, and faster fulfillment needs – accelerated enormously, because customer behavior was forced from going to the store to ordering online. That acceleration occurred with general merchandise e-commerce but most notable was the acceleration in e-grocery. Furthermore, this growth in e-grocery is likely to continue due to secular changes in the grocery customer’s preferences, as well as grocery’s operational and financial pressures.
Labor Shortages Then and Now
Prior to the pandemic, labor shortages were a driver of warehouse automation investment. But has slack in the labor market due to the pandemic relieved these labor pressures? Markus said that the warehouse labor market hasn’t changed notably – a labor shortage still exists. However, automation is also being adopted to bring down lead times and to be able to flex to changing demands. Further, labor risks have also increased due to social distancing and quarantine requirements.
Innovation, Selection, and Futureproof Investments
Warehouse automation investments are a ten-plus year decision. An appropriate decision involves the right automation for one’s needs, as well as the right level of automation. Flexible technology that can adjust to needs that aren’t even known at the time of implementation is an important consideration for optimally aligning a warehouse automation investment with facility requirements as they evolve over time. For example, some technologies allow for scaling of throughput and inventory needs independently. Additionally, an automation investment should be aligned with a company’s culture and labor practices, as well.
Words of Advice for Companies Evaluating Warehouse Automation
Look for a partner interested in providing a solution to your organization’s specific needs, and that will meet your needs for a number of years while providing a strong return on investment. To learn about Radwell International’s automation of its extensive inventory of spare parts, click the link below to register for the Radwell International / Swisslog session at ARC Advisory Group’s Digital Supply Chain Forum.