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Three Trends in Warehousing and Distribution for Changing Times

Supermarket employee using a tablet to check stock

As the coronavirus pandemic turns “business as usual” on its head, the world of warehousing and distribution is rapidly changing. Stay-at-home orders are fueling surges in online orders. Temporary storefront closures are forcing businesses to get online quickly – or risk going under.

The following three trends— together with practical tips on how to implement them­­-- may help your business move forward with confidence and foresight in these volatile times.

 1. Surging Online Orders Is Putting Pressure on Fulfillment and Warehousing

The pandemic has accelerated the transition by companies to buy and sell online. In fact, according to a survey by on-demand warehousing provider Ware2Go, more than half (55%) of Americans are now purchasing a wider range of products online in addition to buying from websites they didn’t spend with prior to COVID-19. Online retail purchases of products like groceries, clothes and medications have skyrocketed, according to the Ware2Go survey.

But the online trend isn’t limited to retail. In the UK, business-to-business e-commerce growth has been accelerating during COVID, according to a Wunderman Thompson Commerce survey reported by essentialretail.com. The April 2020 survey said B2B e-commerce accounted for 46% of business-to-business spends.

Expect these shifts in buying behaviors to outlast the pandemic and create opportunities for businesses to embrace digital channels. Companies may do well to invest in a robust digital strategy and fully analyze data associated with it.

For certain products, e-commerce demand is going through the roof, says Eric Dolan, UPS vice president Global Logistics and Distribution, speaking in a UPS webinar on the current state of warehousing and distribution. 

This is great news for those products in hot demand. However, amid such rapid changes and with some product categories unexpectedly taking a backseat, companies need to understand what these shifts mean in practice for warehousing and distribution. A surge in demand is little use to your business if you’re unable to fulfill the orders. 

Companies that are new to online sales often have big questions about warehousing. When you think about all the details involved, starting a warehouse program from scratch can be intimidating.

Should you own or lease? How much room do you need? How important is location and how do you know which location is best? What are the smart ways to organize your warehouse for products, workers, and transportation? Other details need to be considered such as a proper loading area and heating, ventilation, and air conditioning.

Obviously, starting a warehouse operation can be a lot to take on. The right answers to your warehousing questions depend on multiple factors that are unique to your products. However, one way to eliminate the guess work is to reach out to an expert, on-demand warehousing outfit such as Ware2Go. 

Ware2Go operates more than 35 warehouses nationwide connected by a single Warehouse Management System (WMS) that integrates your sales orders and other key commercial data in a comprehensive cloud-based platform.

For smaller merchants, turnkey services that integrate directly with a wide range of online marketplaces could be the right solution for you.

2. Don’t Put All of Your Eggs in One Basket

Changes in buyer demand, exacerbated by the disruption of COVID-19, increase the need for companies to build greater flexibility into their supply chains.

For merchants storing all their inventory within one warehouse or still doing fulfillment from their stores, COVID-related closures and staffing issues can prove highly disruptive. Many are now looking to diversify their distribution networks and spread their inventory across additional sites.

Even if your main warehouse is operating fine, UPS experts agree that it makes sense to plan for the worst. They suggest spreading inventory across multiple facilities to help guard against future lockdowns triggered by the pandemic.

Distributed warehousing also helps companies better respond to seasonal surges and other periods of peak demand.

Along with adding flexibility to your supply chain, consider cultivating a diverse base of suppliers. Identify your primary suppliers and do some research to fully understand their capabilities and weaknesses. Ask yourself key questions like: Can these suppliers quickly shift production to other locations? How reliable is their transportation system? Do your suppliers effectively use tools that allow them to closely track all shipments in real time? The answers to these questions will help you develop a supply plan you can quickly put in place when your industry faces disruption.

3. The Rise of Automated Warehousing Technology

From optimized storage to streamlined packing, technology has long had a role to play in the modern warehouse—and recent events may only be accelerating its adoption.

Watch for the continued automation of such common features as put walls, where picked items are assembled for packing, and pick carts, says Dolan at UPS.

Expect an increase in lights-out warehouses—highly automated facilities that require few staff to operate—alongside an uptick in flexible robotics. Mobile robots, by being re-deployable, offer the benefits of advanced warehouse technology without the need to install fixed hardware.

As always, everything comes back to visibility. Whatever technology solutions are deployed within your warehouse, knowing exactly what’s happening on a real-time basis is key to improving operations.

“By truly understanding what it costs to move and store product, customers can become more effective in choosing their sourcing providers and even setting pricing," Dolan says.

Be aware of other warehouse management issues, such as staying vigilant on staff health protocols like temperature checks, masks, gloves, and physical distancing.

Nobody can fully predict how the pandemic will change space, labor, and transportation costs, says Dolan. His UPS Global Logistics and Distribution division operates a network of distribution centers in more than 120 countries worldwide. “With a trusted partner like UPS we can help you work through your options before you settle on an alternate supply chain strategy."

Plan for Success

The modern marketplace is more competitive than ever. To succeed in an increasingly direct-to-consumer world, your company needs a compelling digital presence as well as the ability to efficiently manage inventory and quickly fulfill orders.

Now's the time to revisit your fulfillment strategy and ask the hard questions when it comes to your supply chain. Watch the webinar and learn how to get more out of your warehousing and distribution.

Watch the Webinar Now

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