In the supply chain of today and tomorrow, uncertainty is the one constant that companies can plan to occur.
Retail and e-commerce businesses have been in flux for years now, and volatility will likely continue for the foreseeable future. Changing consumer behaviors, dramatic volume spikes around COVID-19, and ongoing labor uncertainty have resulted in dramatic changes for warehousing and distribution center operations.
Now that e-commerce demand has cooled since pandemic highs, warehouses and distribution centers must realign their efforts around solutions that allow them to be fast, efficient, and cost-effective in their fulfillment efforts. In reacting to the so-called “Amazon Effect” over the past few years, it has become more apparent that operations need to be both fast and agile to quickly react to changing customer demands and order patterns.
Omni-channel retailers are further challenged to design and operate distribution centers that can efficiently serve retail replenishment and business-to-business needs while quickly and accurately fulfilling individual, direct-to-consumer orders.
Plus, as SKU proliferation continues to explode, warehouses must maximize storage capacity, yet at the same time, make those products easier to pick and replenish faster than ever before.
All these changes are occurring in an environment where inflationary costs make products more expensive, possibly lowering consumer discretionary spending in the near term. Some retailers remain cautious, while others recognize the need to invest in technology to reduce dependence on a scarce and expensive labor pool.
As an end-to-end fulfillment partner and consultant to those facing distribution challenges, we’ve seen how market changes affect operations differently across the country and we advise our clients to react accordingly. Fulfillment centers that streamline processes and adopt intelligent, scalable, and strategic automation technologies are setting themselves up to be resilient against continuing market dynamics.
Retailers who invest in technology – and invest in optimizing their fulfillment process altogether – will have the tools to survive uncertainty in 2023. In the coming year, we will see a dramatic difference in performance between companies that understand how valuable automation technology investments can be in driving efficient and effective operations and those that don’t.
Extreme market volatility in the past few years has taught savvy retailers to invest in technologies that boost productivity, build resilience, and enable agility. The one lasting lesson we’ve learned and can apply going forward into 2023: Uncertainty must be expected and retailers who invest in automation technologies for order fulfillment will be armed with tools to help them survive and thrive into the future.
Larry Strayhorn brings 40+ years of supply chain industry experience, having held major positions at some of the largest systems integration and MHE manufacturers in our industry. He was instrumental in the formation of KPI Integrated Solutions in 2021, bringing together Kuecker Logistics, Pulse Integration, and QC Software. In the past 12 months, KPI acquired 4 additional firms where Larry played a key role. He has served our industry: Led the MHI Order Fulfillment and Integrated Systems Councils. Has been a 14-year member of the Industry Leaders Roundtable of MHI, and the Board of Governors of MHI where he recently served as Chairman of the Board. Board member of leading robotic storage systems provider: AutoStore, Vats, Norway, 2017-2018.
