Ecommerce: “The industry was unprepared for this rapid shift to B2C”

Barcelona, December 14, 2022.- Inbound Logistics magazine has published an analysis of the logistical consequences of the ecommerce boom. Reflections for the present and the future:

Inbound Logistics: Kent says, adding that many organizations had to “compress their digital roadmap timeframe.” Along with transportation backlogs, the rapid shift to e-commerce also upended distribution center operations. Retailers and manufacturers had to quickly shift from managing pallets to working with parcels and smaller orders. 

“That fundamentally alters the flow of product through your warehouse, as well as the supporting laboring systems,” says Kaitlin Peterson, senior director of product marketing with Locus Robotics. Adding to the complexity is the unpredictability of consumer orders. 

“That’s a demand planning problem that I don’t think anybody has figured out, and yet it completely changes how product comes into a warehouse,” Peterson says. Retailers are used to volatility, Kent notes. Historically, however, the volatility has been relatively predictable; typically, it’s seasonal or driven by promotions. Now, retailers are confronting both volatility and unpredictability. Moreover, the traditional solution of stockpiling inventory comes with a cost.

Similarly, few distribution centers (DCs) were designed to accommodate the jump in volatility in the flow of goods moving in and out, says Mike Sansone, associate partner in the consumer practice with global strategy and consulting firm Kearney. One indication is the drop in compliance with dock-door appointment times, which fell from about 85% to 60 to 65%.

Companies can make these 5 moves to help ensure any technology deployments are as effective as possiblein boosting distribution center efficiency:

  1. Rethink current processes. Simply applying new technology to old processes likely won’t boost workflow efficiency and effectiveness, says Neil Bentley, product management director at Locus Robotics.
  2. Know your products. Understanding your product mix, customer demand by item, and supply chain flows will help in pinpointing where to begin implementing any solution, says Spencer Shute from Proxima.
  3. Consider allocations and layout. Review warehouse product allocations and map the floor plan andtypical product pick patterns to identify ways to reduce redundant movements, Shute says. This can also help identify products that should be grouped together.
  4. Develop consistent measures of productivity. For companies with multiple sites, developing consistent measures of productivity in like-for-like operations, while fostering transparency and sharing best practices,can have a tremendous impact on performance with limited investment, Kearney’s Mike Sansone says.
  5. Think holistically. Taking an expansive view of distribution center operations helps in identifying wherechallenges are and the drivers behind them. “Collect data, employee input, and align performanceexpectations to ensure your solutions tackle the root cause,” Shute says. “This unlocks the potential to drive efficiencies that improve operations.”

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