Since the emergence of COVID-19, manufacturers and supply chain companies of all sizes have struggled to adapt. In many cases, shipments from overseas suppliers dried up practically overnight. Many companies were forced to shift their operations literally within weeks, as alcohol manufacturers began making hand sanitizer and clothing manufacturers began churning out masks.
At the same time, consumers’ buying habits changed dramatically, with online U.S. sales in the first six months of the year reaching more than $347 billion – up 30% from the same period in 2019. Supply chain operations are stretched thin as they struggle to meet the skyrocketing ecommerce demand.
The emergence of COVID-19 changed consumers’ delivery preferences as well, as they began to take full advantage of fast, “no contact” fulfillment choices such as buy online, pick up in store (BOPIS) and curbside delivery. The use of mobile ordering also increased this year based on the impact of the pandemic. According to Zebra’s 13th annual Global Shopper Study, 72% of surveyed shoppers used mobile ordering in the last year. This growth is likely to expand as consumers continue to find new ways to maintain social distancing and adherence to local guidelines.
Adapting has been particularly difficult for small- and medium-sized supply chain companies, many of whom still rely heavily on manual processes to support their operations. What many are starting to realize though is the value technology solutions can bring to their business. Technology has become the great equalizer that allows small- to medium-sized supply chain businesses to operate just like their larger counterparts – and set themselves up to survive and thrive in the future.
1. Improving Inventory Tracking
For instance, companies are boosting fulfillment efficiencies by managing inventory in real time and keeping an accurate count – and location – of everything from raw materials to finished goods.
Wireless-enabled inventory management solutions are giving companies real-time visibility into the exact location of each item they sell. This allows them to fulfill orders in the fastest and most cost-efficient manner possible – whether those items are still at the manufacturing facility, located in a micro-fulfillment facility at a giant warehouse, or sitting in a local store. This can significantly reduce the amount of time and money wasted due to missing inventory or inefficient order shipments.
An accurate inventory management solution also allows operators to uncover trends in the ordering process that can aid them in shielding their supply chain operations from unexpected disruptions. For example, they can quickly uncover when a supplier is not meeting its delivery dates and shift its orders accordingly.
2. Reducing Labor Turnover Costs
Attracting and retaining good employees is a constant struggle and a huge cost for small- and mid-sized supply chain companies. According to an ARC Advisory Group survey, about one-third of warehouses report employee turnover of 10% to 25%, while another third report turnover from 25% to as high as 100%.
Annually, under pre-pandemic circumstances, manufacturers and their supply chain partners were particularly challenged during the holiday months, when existing workforces included temporary workers and turnover was usually higher.
The need for temporary workers could be high this holiday season, as Deloitte forecasts that ecommerce sales this holiday will grow 25% to 35%, generating up to $196 billion in sales. That’s around double last year’s increase of 14.7%.
3. Improving Employee Training and Efficiency
Technology can also help increase employee efficiency and reduce time spent training new workers. Equipping front-line workers with wearable technologies, such as smart glasses and ring scanners, can help improve worker productivity and pick time. These devices are also ideal for reducing training time and can make tasks easier for new employees being onboarded.
Given the challenges that manufacturers and their supply chain partners have faced in 2020, it’s no surprise that two out of every three businesses are looking for greater control over their supply chains, according to a HSBC survey of 2,604 decision-makers from small to large businesses. As decision-makers evaluate the best way to manage their supply chains, considering new technologies that increase efficiencies and lower labor costs will be crucial for helping them improve their operations.
To learn more about how technology is helping warehouse operators modernize their operations and future-ready their supply chains, click here.
Mark Wheeler is the Director of Supply Chain Solutions at Zebra Technologies, where he is responsible for Zebra’s warehouse and supply chain solutions global strategy. He collaborates closely with customers’ supply chain operations teams, solution partners, and Zebra’s product development teams to align emerging technology solutions with customer needs. Mr. Wheeler has held numerous positions in supply chain execution throughout his 30-year career, including strategic consulting, automated warehouse design and build and complex systems integration. He holds a Bachelor of Science (BS) in mechanical engineering from Carnegie-Mellon University.