Disruptions
have affected every facet of warehouse fulfillment in the previous two years.
Port congestion, factory shutdowns, space constraints, labor shortages, extreme
weather occurrences, trade wars, growing supply delays, tariffs, and expenses
have all resulted in unprecedented difficulties.
While many
people point the finger to the epidemic, the true problem is rigid, outdated
supply chain structures that are incapable of responding rapidly to
extraordinary changes.
While there
are concerns, there are also opportunities in warehouse and supply chain
management as we look ahead to 2022 and beyond. These opportunities are shaped
by technological advancements as well as changes in customer behavior.
With many of
these issues expected to linger, here are four methods to strengthen
fulfillment warehouse operations in the New Year to generate more energetic
supply chains and triumph over disruptions:
Resilience of the Supply Chain
As stated in
the first paragraph, warehouse fulfillment operations have had a difficult
time. The reasons range from labor and material shortages to shipping problems.
Those things are unlikely to persist forever, but the broader experience of
disruptions has shone a light on the issue of supply chain resilience.
Creating
supply chain resilience necessitates a comprehensive strategy, with agility
being a key component. When disruption occurs, you can move quickly with
agility integrated into your supply chain. You might even be able to move
before the interruption becomes noticeable.
However, in
order for your supply chain to become more agile, you must first gather
information. Information improves clarity and aids decision-making, which are
both required for an agile strategy. As a result, we may expect more
organizations to improve supply chain resilience in 2022 and beyond by
implementing digital supply chains that optimize integration at all points.
Networks of Distribution and
Fulfillment
Increased
e-commerce activity and supply chain disruptions are fueling demand for
industrial real estate, resulting in record-low vacancy rates and rising rents
that are expected to last through the end of 2023. Due to limited warehouse
capacity, many business owners continue to rely on a single central warehouse,
with 41 percent of business owners self-fulfilling numerous channels from one
big distribution network last year.
In today\’s
uncertain environment, operating from a single location is no longer
sufficient. One terrible storm, labor strike, or other isolated disruption can
bring your entire distribution system to a halt. In addition to supply networks
and manufacturing, firms should consider dark stores, micro-fulfillment
centers, ship-from-store fulfillment, or even subcontracting it to a
third-party logistics (3PL) provider to expand their distribution and
fulfillment networks.
Strategies for Delivery and Pickup
While the
ecommerce business has been dealing with a driver shortage for years, the
situation has been exacerbated by growing e-commerce sales and labor
limitations as a result of the COVID-19 pandemic. This has had a negative
influence on railway freight as well as last-mile delivery, which is the most
expensive and time-consuming element of the shipping process.
In response
to increased capacity constraints and package volumes, traditional parcel
carriers such as FedEx and UPS are increasing surcharges and rates in 2022,
causing additional challenges and costs for shippers this year.
Despite
existing supply chain issues, most retailers expect to offer same-day delivery
by 2025, up from 35% currently, according to a recent poll. To reach this goal,
many business owners are investigating backup delivery providers and
techniques, such as on-demand delivery services like Instacart and DoorDash, as
well as in-store pickup options like buy online pick up in-store (BOPIS) and
curbside pickup.
Manufacturing and Supply Chain
Networks
Businesses
that rely significantly on overseas manufacturing have been affected
particularly hard by the present supply chain problems. Many furniture and
textile industries who moved production from China to Vietnam after the United
States placed tariffs on Chinese items in 2018 were caught off guard when the
second wave of COVID-19 stormed over the country last fall. Port congestion,
rising ocean freight prices, and capacity limitations added to toymaker’s woes
as the holiday season approached, with Hasbro stating that $100 million in
orders went unmet in the third quarter of last year.
While on shoring
is a significant project that may not be right for all businesses, it is
critical to grow your supply and manufacturing network beyond a single country.
Unlike many other dressmakers, Levi Strauss & Co. survived interruptions
thanks to a wide network stretched over more than 20 nations. This extensive
network not only enables the denim company to transfer manufacturing as
necessary, but also to optimize its supply chain in order to minimize costs and
boost delivery and production speeds.
Because of
the global health problem, retail has altered dramatically in only a few short
years. The ecommerce business has expanded almost beyond recognition, putting
warehouse fulfillment operations in difficult situations. All of the trends on
this list will aid warehousing fulfillment and supply chain operations in being
more productive, ambitious, and efficient, while also increasing revenue,
during 2022. It is a moment of transition, which presents challenges as well as
exciting opportunities.