With the worst of 2020 behind us all, we entered 2021 with a vague sense of hope for a better year and a wish to return to some sense of normality. Now, although vaccines have been approved an insidious element of global economic volatility remains lurking in the wings. While we are hopefully over the worst of it, January 2021 recently witnessed the UK enter its third national lockdown with similar measures being adopted in Scotland and Wales.
As the joint force of a Christmas eve Brexit deal and worsening pandemic conditions continue to shape the traditional economic and business landscape, just what can business leaders do to ensure the sustainability and security of their businesses throughout the changes of 2021 and beyond?
As of 7 April 2020, over one-third of the world’s population was under some form of lockdown. This change meant that across many industries, people were forced to work from home, socially distance, and adopt shopping online as the norm. With retailers’ doors closed, many were forced to shop online and accept e-commerce and socially distanced deliveries to the door as the new normal. This rapid shift in commerce dynamic greatly altered the traditional high street and left the retail sector experiencing new pressures from the sudden changes in consumer behaviour.
The rise in online commerce, in turn, increased the pressure put on warehouse technology meaning the supply chain industry has been no stranger to adjusting to significantly increased order fulfilment. Acknowledging expectations for quick demand and fast shipping amidst requirements for social distancing, it appears that warehouse automation will not be the only tech trend predicted to surge throughout 2021. The Supply Chain Network team here explore what other changes may follow:
Continuation of a rise in eCommerce and introduction of urban warehouses
Prior to the pandemic, many warehouses such as those of Ocado had already introduced robots and automation as part of their everyday fulfilment operations. With predictions for peaks in eCommerce to continue, it is proposed that this future demand will result in the introduction of robots to supplement human staff and increase picking rate, accuracy to achieve higher fulfilment rates.
Impacted by the rise in demand for warehouse space over retail premises, urban warehouses are likely to start making an appearance. Small facilities controlled by central inventory systems may become preferable over traditional walk-in stores, and even prove to be more efficient than bulky centralised warehouses. Potential sites for these urban warehouses could replace defunct retail parks and shopping centres.
Opportunity Vs Sustainability
Five key drivers were recognised as factors behind driving global trade and business transactions over the coming year. These were identified as Covid-19, US-China trade relations, US-EU trade relations, rising non-tariff protectionism, and taxing digital trade.
Whilst the supply chain industry has adapted very quickly and effectively to sudden consumer and supply changes, ongoing operations do also need to be consistent and dependable. Sustainability, therefore, is currently at the forefront of all supply chain managers’ minds at this time of great uncertainty.
For many, this era of disruption has witnessed many business operations bring reconfigured and priorities being reviewed. Many companies - more out of necessity than choice - have even restructured their operations to synchronise with new conditions. Whilst the pandemic and Brexit have interrupted most traditional trade, for some, it has also provided a much-needed catalyst for change and introduced new processes and techniques to companies which have made them more agile than ever before.
A report from The Economist Intelligence Unit found that as a result, many businesses have improved their sustainability whilst others have ultimately been made more impervious to disruption than they were ever originally thought to be.
Digitisation and Warehouse Modelling Technology
Although introducing the vaccine is working to combat the virus, social distancing still needs to be followed. This poses an issue in warehouse facilities where workers usually operate quickly and close to each other. Virtual technologies, such as Digital Twinning, however, allows virtual yet accurate copies of facilities to be constructed, to test the impact of proposed new changes to the layout, equipment, and workforce of a warehouse without any financial or physical risk.
In the wake of the disruption of Covid-19, the supply chain industry has also witnessed a sudden global prioritisation of introducing robotics into warehouses to mitigate against the virus's impact on supply chains through the restrictions of the movement of people. In China, some operations such as Cadillac’s Shanghai plant, employ circa 400 robots and two fully automated production lines that do welding and painting. In this sense, digitisation of supply chains can quickly help companies to realise their businesses’ resilience against supply chain disruption.
Virtual modelling technologies, alongside supply chain data analytics tools such as Big-data, Cloud-Computing, and IoT, are increasingly being adopted by firms across the globe to better manage and control supplier relationships, worker safety, and fulfilment efficiency across businesses’ logistics and shipping processes, worldwide.
New opportunities in 2021
Want to start your new year the right way? The Supply Chain Network team is expecting a busy 2021 and is keen to hear from Warehouse Consultants looking for Associate work. Specialising in all aspects of warehouse and network design, check out www.scnuk.com to learn about the work that we do. If you feel you could fit into our team then e-mail Ian Maughan at firstname.lastname@example.org.
Ensure you are ready and future-proof your business plans and warehouse design. Email: email@example.com or call: 01423 815 941