Effects of COVID on Warehousing: 5 Changes That Are Here to Stay
Global supply chains have taken a heavy hit during the pandemic. But even now, nearly 2 years later, supply chain disruptions continue to impact retailers, manufacturers and warehouses in a myriad of ways. As a result, everyone is being forced to adapt quickly to changing circumstances. Here are 5 ways COVID is impacting warehousing in supply chains everywhere.
1. Warehouse Automation and Greater Scalability
COVID has facilitated the adoption of many different types of automation technologies in warehouses across the country. Automated storage and retrieval systems have proven to be particularly helpful in maintaining fast deliveries to customers, even as companies struggle to adjust their inventory to labor shortages and production disruptions.
Newer material handling technologies like RFID and voice picking are being implemented on a wider scale. Additionally, warehouse management software solutions like DATASCOPE WMS and other scalable processes are being used to manage unpredictable demand and keep picking strategies flexible.
3. Growth of E-commerce
Online consumer spending has increased exponentially since the pandemic began and companies have been forced to update their e-commerce capabilities to keep pace. Warehouse order fulfillment has shifted from case-based picking to unit-based picking for the sake of speed and efficiency. Ultimately, for better or worse, regular lockdown cycles have pushed Direct-to-Consumer (D2C) e-commerce technology ahead by nearly 5 years, according to the estimates of many supply chain experts.
3. Increased Warehouse Capacity and Space
Manufacturers and distributors have learned (sometimes the hard way) to keep more safety stock on hand in case of material shortages, staff shortages and other supply chain disruptions affecting production and deliveries. As a consequence of increased inventory levels and more space needed throughout warehouses to comply with social distancing guidelines, warehouse layouts are changing to accommodate these needs. More storage locations within the warehouse translates into greater storage capacity for the warehouse as a whole.
A related yet often unconsidered consequence of COVID is the growing desire for shorter contract terms for clients wanting to rent or lease warehouse spaces. This also extends to 3PL partnerships and contracts. As shorter contract terms become more common, expect to see longer contract terms being incentivized.
4. SOCIAL DISTANCING POLICIES
Worker behavior in the warehouse has been one of the most notable effects of COVID, with social distancing policies being enacted and strictly enforced. Don’t expect these policies to change anytime soon. Even if we ever approach something close to the “end” of the pandemic, many companies will likely continue to enforce some form of social distancing practices in an effort to keep their workforce healthy and safe.
5. Changing Supply Chain Structure
Finally, one of the biggest effects of COVID on warehousing has been the restructuring of entire supply chains. For starters, many companies have decided to bring their manufacturing operations closer to home. These “reshoring” initiatives, while requiring additional warehouse capacity and efficiency, have provided much-needed alternatives to warehouses dealing with all of the supply chain disruptions created by the pandemic.
There is also a growing need to provide same-day or next-day delivery service to customers. To reduce transportation costs and risks, manufacturers want to move closer to their customers and this can only happen through decentralized warehouses and distribution center systems. This phenomenon has also served to increase the use of 3PL providers.
Get in touch with us to find out how DATASCOPE WMS is helping our clients through the pandemic and schedule a demo of our WMS to see how it might be able to help you!