Pressures on the supply chain have changed over the years. It is partially because of these pressures that the supply chain industry has evolved as much as it has—and continues to do so.
* By Sheryl S. Jackson *
Remember when taking inventory meant manually counting everything in the warehouse? Or, when fast delivery was counted in weeks instead of hours? Or, when the latest, high-tech, must-have robots weighed as much as a car but couldn’t move and computer memory was referenced in kilobytes instead of terabytes?
Pressures on the supply chain have changed over the years, but it is partially because of these pressures that the supply chain industry has evolved as much as it has—and continues to do so. Now, thanks to e-commerce, free and same-day are challenging supply chains to be better, faster and smarter. Making decisions about which technology to adopt is a top concern and the pressure to hire competent, qualified workers is escalating.
These trends are top of mind for almost everyone in the supply chain industry, including John Rosenberger, director, iWAREHOUSE GATEWAY™ and global telematics for MHI member The Raymond Corporation. From his perspective, a changing workforce, the speed at which e-commerce demands fulfillment and maintaining the safety of warehouses and warehouse employees as the speed of production increases are the three main factors affecting the supply chain today. These challenges create the need for supply chain organizations to find better ways to manage the increasing workload as the number of people available to work in warehouses and supply chain organizations decreases.
Rosenberger’s assessment is in line with the more the 1,000 supply chain leaders who contributed to the survey results published in the 2019 MHI Annual Industry Report, where the following were identified as the top five challenges:
- Hiring qualified workers—65%
- Customer demands for lower costs/pricing—56%
- Customer demands for faster response times—54%
- Increasing competitive intensity and rising customer expectations—53%
Innovation supported by technology is recognized by survey respondents as the best way to address these challenges. In fact, survey results suggest that investment in supply chain innovation is projected to increase by 95% in 2019 following a trend of declining investment from 2015 to 2018, according to the MHI report.
How can technology address the key pressures on supply chain leaders today?
“There is no one right answer because the solution depends on the business,” says Krishna Venkatasamy, chief technology officer for MHI member Lucas Systems. “Distribution operations are configured differently to serve e-commerce customers and to supply stores, so organizations require different technologies and processes,” he said. One retailer that his company serves has configured its distribution center to handle both types of customers but uses different systems in each area—a sortation system to fulfill store orders and a put wall to fulfill e-commerce orders. “The goal is to select technology and fine-tune processes to meet different operational needs to increase efficiency throughout the warehouse,” he said.
Addressing the workforce challenge
“It is hard to find people who want to work in a warehouse or distribution center because it is physically demanding but also because companies often place these facilities in geographic areas without a large, local population,” pointed out Rosenberger. “For instance, a distribution center placed at the junction of four major highways in Scranton, PA, is ideal for transportation needs, but the overall population is between 70,000 and 80,000 people.” Realistically, the amount of land needed for a distribution center would not be available or would not be cost-effective, but the trade-off for moving away from population centers is a smaller pool of potential employees, he added.