7 Supply Chain Trends to Watch Right Now
As the nation recovers from the unprecedented Covid-19 pandemic, and continues to walk a line of economic uncertainty, changes in consumer behavior are pushing boundaries for retailers, warehouses, manufacturers and any company that manages logistics or shipping/receiving.
Supply chains as we traditionally know them are reacting to e-commerce booms and looking for the latest technology in warehouse management to help them move a higher volume of product more safely, more accurately, and more quickly than ever before.
These are the top trends in inventory management:
1. Just-in-time manufacturing and on-demand warehousing need to get smarter.
Just-in-time manufacturing (also known as lean production) and on-demand warehousing helps reduce production system waiting periods and speeds up the response times between suppliers and their customers. These slim but efficient inventory management systems work well but can be vulnerable to choke points and external shocks. It’s difficult for the logistics teams to be agile when they are depending on unreliable supplies or spending valuable time manually updating and reporting on inventory or production reports.
Real-time data and shared dashboards will be necessary to keep up with the ever shortening buyer’s timeframe and troubleshoot bottlenecks more quickly.
2. Warehouses are shifting to micro-fulfillment.
Piece-based fulfillment and micro-fulfillment are growing in popularity because they allow warehouses to work at a smaller, quicker scale. Allowing warehouses to work with a more diverse offerings allows them to complete shipments more quickly, rather than wait for large and spread out distribution centers to work together to complete the order. Smaller warehouses and distribution centers can also be located closer to the customer, further shortening pick and ship times.
3. Brick and mortar are declining...
While traditional retail channels weakened in 2020, iconic brands added or expanded their online direct-to-consumer sales. For example, Nike’s digital sales grew 79% after its brick-and-mortar stores shuttered:
“Our wholesale partners largely followed the same pattern and as a result, product shipments to wholesale customers were down nearly 50 percent resulting in lower total revenue and higher inventory. During the widespread physical store closures, we accelerated our connection and engagement with our consumers leveraging the strength of our digital ecosystem.”
4. But in-store pickup and direct-to-consumer present huge opportunities.
Nike credits its success to the ability to operate with agility, focused on optimizing marketplace supply and demand, cost management and leveraging financial strength to drive long-term sustainable, profitable growth. They are building more stores (which help bear the burden of local inventory and storage) and have stated they are increasing distribution center activity.
5. Out of stock inventory means greater losses in profits.
In addition to missed opportunities in sales, there are rippling effects of “out of stock” merchandise: grievance handling, damaged reputation, detention fees and demurrage charges related to rescheduled or delayed shipping times, and supply chain adjustments.
6. Labor with physical distancing accommodations are still expensive but easier to find
Large portions of existing logistics and manufacturing facilities have undergone change in the last year in response to Covid-19 mandates and guidelines. When the need for social distancing protocols arises, companies still need to pay attention to the material transfer zone and provide for greater separation and segmentation as well as enhanced hygiene and cleanliness requirements. Read more about social distancing in the facility here and talk to your Rite-Hite Representative about Zoneworks EZ Separation Barriers.
7. Lightning fast changes require real-time data
When Rite-Hite equipment is made smart, the Smart Data and Analytics Platform delivers real-time information and historical data from the loading dock and warehouse equipment right to your dashboards. Eliminate the need for manual tasks or paper-based processes.
These are the top trends in inventory management to watch right now. While supply chains react to e-commerce booms, unpredictable choke points, and the need for shorter delivery times they are relying on the latest technology in warehouse management to keep them agile and evolving.