It’s been suggested that the pandemic has been a driver behind accelerated tech adoption across a wide swath of industries. It’s clear some businesses were caught flat-footed when the widespread changes brought on by COVID-19 meant higher volumes of e-commerce, a lighter workforce and intermittent shutdowns. Industry experts have been pointing to the need for distributors to optimize their warehouse operations, but just what, exactly, does this mean?
Nimble, Custom-Focused Business
For Kelly Squizzero, one of the most critical points for distributors to consider is that everything that happens in their warehouse has a direct impact on their relationship with their customers. Squizzero is Director of Industry & Solution Strategy for Distribution for Infor, a cloud software provider with a significant product suite that’s designed to help distributors achieve their technology goals.
And the goals, it seems, are changing. The pandemic brought several simultaneous challenges to warehouse operations. One is obvious: the pandemic has made for workforce inconsistency across all sectors, as team members deal with illness, quarantine or child care, forcing them to miss more work.
Another is from a customer side: growth in e-commerce is outpacing even the most bullish of prior estimates, and end users have established high standards for an omni-channel experience. “If you don't have an omni-channel fulfillment strategy, you might lose out on a lot of business,” says Vishal Minocha, Infor’s Senior Director of Product Management and Go-To-Market for Supply Chain & Warehouse Management Systems. “Having your warehouse be able to fulfill both channels optimally is key,” he explains. “And if you look at the current warehousing landscape, a lot of the WMS systems which are out there -- they're pretty old and they don't have the ability to provide this optimized fulfillment.”
Minocha believes that “optimized fulfillment” is more than just getting product out the door, on time. Distributors are also facing a critical requirement to add value, despite their inability to offer as many face-to-face services. Minocha emphasizes services like kitting as a way distributors are going above and beyond, but they need the tech foundation to support these efforts effectively.
This time of business disruption saw many distributors hunkering down and trimming the fat wherever possible. For Squizzero, a WMS system is designed specifically to keep costs streamlined, especially when it comes to inventory.
“If your inventory is managed more effectively and you know where it is located, then you're not buying additional inventory to cover yourself just in case. And we see that with distributors where the buyer is nervous about running out,” explains Squizzero. “If they had more confidence that they could meet their customer commitments, they wouldn't have this feeling that they're going to run out or have to overbuy. So we look at warehouse operations as a way to control their purchasing, and certainly control any lost inventory or inventory that's walking out the door because it's stolen because you're not properly tracking it.”
And we know that inventory control can mean massive dollar amounts. For some, this could mean the difference between laying off valued team members or buying a few months of time.
The Value of Cloud
On-premise once ruled the roost in warehouse distribution, but it’s not offering the effective flexibility needed in today’s business environment. Minocha believes that, in times of increased throughput in the warehouse, the value of cloud over on-premise has more than just data security implications. With cloud, he says, “you can figure out the increased throughput and then automatically add the additional compute power, which is needed with that increased throughput. So all the value of cloud security and reliability is there is the built-in disaster recovery if your system goes down … but to me, it's the ability to handle this increased throughput automatically, on the fly, that’s a great aspect as well.”
Squizzero adds that the pandemic applied some pressure in this area as well. “The need for cloud absolutely was escalated with COVID across the board,” she stresses, “and those customers of ours that were already in the cloud had a much easier time adapting making adjustments as needed.”
Squizzero and Minocha also stress that optimizing e-commerce isn’t as simple as streamlining pick-pack-ship. There are new variables that need to be considered, including what happens to the product once it leaves the dock. According to Squizzero, many distributors have been caught off-guard by the number of returns they’ve needed to process.
“In the e-commerce world, we might buy something in three different sizes or three different colors, and then return two of the three. I think the same thing is happening to wholesale distributors,” she explains. With WMS, “the distributor has to have a system that allows them to seamlessly accept that return and get it back on the shelf in an effective manner. So we've seen that kind of come full circle.”