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New Year DC Resolutions: 4 Operational Considerations for a Smoother Year Ahead

Mike Senuta | 6 January 2021

As we close the door on a year of tremendous challenge and change, it’s a good time for distribution center (DC) leaders to pause and reflect on how to apply the hard-won learnings of 2020 in order to make course corrections for 2021 and beyond. Despite how early it may seem, now is the time to prepare for the second half of 2021, by which time the COVID-19 pandemic may be substantially behind us.

Supply chains will also begin the transition to a new post-pandemic steady state. Already there has been much discussion about both the short and long-term impacts of the pandemic on supply chain operations. Specifically, discussion surrounds the implications of ecommerce and DC automation trends, which were accelerated by coronavirus safety tips and precautions that urged social distancing, among other tips, to slow the spread of infection.  

As you chart your distribution operation’s path forward consider a few key questions that take into account your business needs, workforce, trends and technologies. Not only will this help prepare your operations for a smoother process but will help you assess your capabilities as external factors continue to change.

1. Current Operations that Support Business Change

Do current DC layout, technology and systems support the changing needs of the business?

Changes in order profiles (lines and units per order) may have accelerated with the dramatic shift to ecommerce from bricks-and-mortar distribution. These changes often require different approaches to picking, packing and replenishment flows and processes to support picking and shipping eaches rather than full cases and pallets.

Picking from pallet racking and carton flow modules may result in sub-optimal space utilization and productivity for picking of e-com orders, while automated goods-to-person technologies can offer substantial benefits and strong ROI.

2. Workforce Flexibility

Will the workforce be available to meet those needs?

Competition for DC labor will likely remain intense through and beyond 2021, especially during peak periods. Temp agencies will also likely continue to be challenged to meet peak demands with productive, reliable resources.

This means that scarce labor will continue to push wages higher, and it’ll exacerbate the challenges of staffing less-desirable shift schedules.

All these factors make it crucial to have the ability to flex in order to handle peak periods and volume variations while maintaining increasing customer service expectations. With increased ecommerce activity and less instore purchases, next-day delivery will be critical as it remains the norm.

3. Future Possibilities

Is the operation prepared to handle the range of possibilities that may be in store over the next few years?

We are headed to a “new normal” in society and the economy. While we can anticipate some elements of this future state, there are many unknowns related to the economy, supply chains, and consumer preferences and habits for which DC operations need to be prepared.

DC operations systems and workforce need to be nimble and prepared for a range of business requirements scenarios and challenges. In 2020, facilities scrambled to adjust schedules and rearrange workstations in order to implement safety and social distancing best practices that kept their workforce safe and kept business moving.

Uncertainty requires flexibility in all aspects of the process – the flexibility to scale, shift to new and different distribution channels, as well as manage ongoing safeguards to contain and prevent contagion.

4. Make the Right Investments

Do we have the latest info about trends and technology needed to make sound decisions about tech and capital investments to set the DC and the business up for success going forward?

Distribution center automation technologies have developed rapidly over the past 5-10 years, with initial investment costs decreasing and ROI increasing.

In some cases, conventional technology may be the best option to gain additional productivity and flexibility at a modest investment. In other cases, investment in complex automated systems involving goods-to-person picking and robotics may be warranted.

There is also a growing number of mid-range options, some of which can be implemented relatively quickly without a huge capital investment (i.e. pick-assist autonomous mobile robots). New technologies can provide capabilities to pick small direct-to-consumer orders for next-day delivery while controlling DC operations and transportation costs.

Prepare Now for What’s to Come

Many organizations do not have the capabilities to properly assess these complex and rapidly changing factors and choices. Bastian Solutions is here to help – we have extensive capabilities and experience to help you assess and analyze your current operation, to chart a course based on industry and business trends, and to design and implement a turnkey solution for any budget and level of size and complexity.

Author: Mike Senuta

Mike Senuta is a Senior Consultant with Bastian Consulting Indianapolis. In this role, he works with customers across North America to come up with innovative solutions to a broad range of distribution and material handling challenges. Mike has extensive experience in DC engineering and operations.

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