Uncertainty is the New Normal
During this unprecedented time, the supply chain is being tested in a way that it never has before. In fact, the pandemic is revealing that the globalized supply chain that brings us many of our products is shockingly fragile. Warehouses are trying to navigate this new normal while also figuring out how to mitigate public health issues among its workers.
The first priority, of course, is to keep workers safe and healthy and to try to stop the spread of COVID-19. The government has created specific guidelines for businesses to refer to in order to plan and respond to the virus, and industry groups have also provided guidance on best practices for keeping employees protected.
As the supply chain industry works to protect its workforce, the fact is that the economic fallout from the global pandemic is very real. With many imports coming from China, disruption in the supply chain has been felt from the very early days of the onset of COVID-19:
- A report by McKinsey released in March indicates that automotive, consumer goods and retail supply chains are in danger of stock-outs by the end of March, late April and May, respectively, due to supplier delays in China.
- According to a survey released by the Institute for Supply Management, almost 75% of companies surveyed reported supply disruption, and 16% of those companies have adjusted their revenue targets downward.
Beyond supplier disruptions, at the top of the list of supply chain operations-related concerns (35%) according to those polled by SupplyChainDive is the lack of warehouse and operations labor. Even before the global pandemic, an inversion in the marketplace caused a labor shortage that made it difficult for warehouses to fill open positions. In fact, as of last fall, U.S. manufacturers reported more than 500,000 unfilled jobs, due in large part to a gap between the skills companies needed and the skills workers had.
How Do E-Commerce Businesses Deal with So Much Uncertainty?
We know now that it’s too late to be proactive for the current crisis, but you can certainly use the lessons being learned right now to plan for the next one. We’ll dig into those lessons in a minute, but for now, we are in an emergency situation, and businesses have to react immediately. But keep in mind, some actions that you take now to mitigate the impacts of COVID-19 on the supply chain can also help to build up resilience to future crises.
- Analyze – Use the best resources inside and outside your company to glean information and insight on the current and anticipated impacts to your business. It is unlikely that entire industries will suffer uniformly, thus each business must prepare for its own future with its preparedness and response while keeping an eye on the bigger picture.
- Plan – Put together emergency plans to deal with the impacts, focusing on those things that you can control. In the short-term, consider ways to make your warehouses, distribution centers, and other buildings secret weapons in the fight against infectious diseases:
- Better air quality treatment: Newer technology is making it more cost-effective to make air much cleaner in facilities.
- Fresh air: Figure ways to bring more fresh air into buildings.
- Virus sensors: Future technology will be able to do more—sensors that can detect viruses on surfaces in real time are coming, and can be used to warn building occupants or trigger air cleaning.
- Temperature Screening: Consider deploying temperature screening to identify people entering buildings who might be ill using an infrared thermometer, or alternately, utilizing thermal imaging. Some companies in China and some hospitals in the United States are doing this now.
- Act – Understanding when and where to focus can allow businesses to quickly respond and recover from supply chain disruption. A survey conducted by MITs Center for Transportation & Logistics looked at how companies are reacting to COVID-19 pandemic and found that 61% of respondents in distribution and retail, and 41% of businesses in manufacturing are largely in wait-and-see mode as they watch the news and plan for a strategy. The fact is, businesses don’t have time to test plans, but must have faith in the plan and put it into action as soon as possible.
Be Proactive to Be Prepared for the Next Crisis
E-commerce businesses are seeing a surge in order volume as quarantined customers stay home, which is evidence that they should weather this storm intact and financially viable. The warehouse pressures that were evident before the crisis, including existing automation capacity and manual labor capacity, have been greatly magnified.
While we have discussed how the supply chain can react in the short term to mitigate the public health crisis for its workers and continue its operation as effectively as possible, it’s also time to look to the future to ensure you’re not caught unprepared again.
- Address your existing automation and manual labor capacity issues – High capacity automation systems combined with a limited manual labor workforce (either due to the previous record unemployment levels or now due to public health risks to employees) create a pressure build-up in the warehouse that is causing supply chain disruption.Even before the global crisis, more and more customers were moving online to do their shopping, and the order profiles were changing just as rapidly. To alleviate this pressure, warehouses need a solution that can:
- Relieve that pressure by handling a growing number of slowing moving items;
- Perform repetitive, mundane work;
- Offer low cost and maintenance requirements; and
- Be able to grow easily over time.
- Invest now to be prepared for later – While supply chain leaders were moving towards investment in robotics prior to the global pandemic, it appears that they are even more likely to accelerate that investment as they see benefits magnified in a pandemic crisis.
The Swift Product Suite
At IAM Robotics, we have created the world’s first autonomous mobile manipulation robot (AMMR), successfully in use by retail companies to pick and transport products for order fulfillment. We are working to transform the supply chain through advancements in automation and robotics, while bringing value to businesses and a higher work quality-of-life for human workers.
The Swift Product Suite offers low cost, flexibility, and scalability, compared to other automation solutions. These robots do not require businesses to invest heavy CAPEX to buy large, fixed automation systems or to change existing warehouse infrastructure to augment their persons-to-goods fulfillment model. Our AMMR can be flexibly configured for today or the future to optimize pick, pack, and ship processes for e-commerce fulfillment. AMMRs can help you mitigate the impacts of the current crisis (and the subsequent supply chain disruption) as well as grow your business in the future, without adding labor.