Tech-Enabled Transformation: This is One of the Best Ways Distribution Centers Can Improve Efficiency to Meet Demand

Many brick-and-mortar retailers and their supply chain partners are converting facilities, optimizing labor and re-engineering processes to support new omnichannel warehouse, distribution center (DC), and in-store fulfillment operations – with much of the transformation occurring on the fly in spite of, and in response to, COVID-19 impacts.

Consumers’ appetite for online shopping was already growing in many regions of the world before the virus was on anyone’s radar, and numerous investments were being made to enable same day (or near same day) delivery and returns, as needed.

In fact, 82% of retailers surveyed for Zebra’s latest Warehousing Vision Study were already working to implement hyper-local fulfillment centers to get closer to their customers. They had anticipated an increase in the volume of orders shipped, the number of SKUs in their inventory and the number of value-added services offered by 2021.

In all reality, the global pandemic just forced many retailers to accelerate projects that were already in motion and jump-start modernization plans that had been slated for further down the line, such as the establishment of micro fulfillment centers. Customers are no longer shopping online for sheer convenience. It’s a necessity for many who need contactless purchasing choices due to hygiene concerns. Therefore, e-commerce fulfillment is no longer a value-add service for brick-and-mortar retailers. They must offer buy online pick up in store (BOPIS), curbside pickup and home delivery services.

As such, retailers must critically assess – and take action to optimize – utilization of all assets, not just infrastructure.

Buildings Don’t Fulfill Orders. People Do.

Retailers’ omnichannel execution strategies are quite mixed. (Some are establishing dedicated fulfillment centers or leveraging their current store footprint as fulfillment centers while others are just planning to fulfill out of the same DCs used for brick-and-mortar stores.) However, their goal is the same: do whatever it takes to increase fulfillment speeds as online shopping rates rise.

But it’s not enough to move fulfillment facilities closer to customers. You must also empower your workforce to move through them faster, while adhering to new COVID-19 regulations. That’s why it is key to have the right technology to help streamline communications and automate activities that can improve workflow conformity and policy compliance. The more you can free up associates and managers to focus on higher-value tasks, the more diligent they can be in meeting growing demand without issue. It will also become easier for your team to collectively and “skillfully balance day-to-day responsibilities with longer-term modernization plans.”

Now, I realize that 80% of the organizations surveyed in Zebra’s Warehousing Vision Study were planning to utilize task interleaving by 2024 and that many probably hoped to use their existing warehouse management system (WMS) to guide workers through their days. However, any retailer wanting to absorb the shock of increased DC workloads and optimize fulfillment operations should really be incorporating more modern workforce scheduling, task management, and inventory management solutions into their software mix.

By simplifying new and increasingly involved tasks and workflows, these types of prescriptive tools empower and engage employees in a very personal and timely manner based on the current situation – not just forecasted models or historical trends. They can also boost efficiency across a number of administrative and logistical workflows in your warehouses and DCs, saving significant money and time, and enabling your conversion to hybrid fulfillment models to be smooth, streamlined and successful.

In fact, existing retail workforce management solutions have demonstrated the following benefits:

• $100 million in savings in labor costs over seven years while continuing to improve labor scheduling (even during the pandemic).
• A $5 million reduction in annual payroll costs, along with enabling greater efficiency and accuracy in budgeting and forecasting and improved alignment of hours to sales activity
• A 4-hour reduction in weekly time for managers in writing employee schedules
• A reduction in staff turnover by 8%.

A Closer Look at How Omnichannel Demand Affects the Workforce (and Should Influence Your Technology Utilization Decisions)

Today’s consumer commerce models demand a new mix of flexibly available associates in warehouses and DCs, along with improved merchandising, fulfillment, and customer support skills to support agile processes. Paper- or Excel-based workforce scheduling and email-only employee communication fall short in this high-speed, data-driven and ever-changing environment as do outdated technology tools that limit workers’ access to actionable information about their responsibilities. Such systems lead to over-burdened associates and managers, low employee morale, and, in turn, a poor customer experience.

Additionally, DC managers can’t quickly and easily adapt to new program rollouts using legacy technologies – or if they’re lacking technology completely. Corporate needs visibility into meaningful key performance indicators in order to make smart labor decisions and proactively monitor output. If productivity declines for any reason, and nothing is done to address it, what you will start to see is employee turnover go up, orders get delayed, and customers increasingly shop elsewhere.

Fortunately, retailers can adopt modern workforce scheduling, task management, and inventory management solutions with great speed and efficiency. Once they are live, these applications can facilitate a gamut of operations, including: warehouse auditing and compliance, operational checklists and intelligent forms processing, and inventory scanning and routing. They can also be broadly applied for task execution management – both in the warehouse or DC and front of the store, which is favorable for those who value the simplicity of managing a standardized technology architecture across the entire operation.

When shopping around for these types of software applications, look for cloud-based, mobile-enabled solutions that can be rapidly rolled out and adopted. Also confirm that the technology solutions (meaning the software and delivery hardware together) can provide such capabilities as:

• Integration with existing third-party systems: These should include equipment maintenance and warehouse and transportation management applications; core transactional systems, such as an enterprise resource planning (ERP) backbone; and labor-related systems such as payroll solutions. This will allow you to reach full solution utilization as quickly as possible, without having to craft your own interfaces or workarounds.

• Real-time communications and notifications: With mobile-delivered alerts and messages, managers and front-line associates can manage by exception, reacting in real time to a fast-developing problem (such as a missing order). They can also execute with agility on new directives and tasks, including recalls, equipment maintenance reminders and alerts from Internet of Things (IoT) technologies (such as sensors)—boosting compliance and reducing the number of open/late tasks.

• Workforce management tools: This allows managers to create accurate labor budgets, forecasts and schedules anytime, from anywhere. The right mix of skilled and trained associates will always be present to support customers and fulfill their orders accurately and on time.

• Employee self-service capabilities: This empowers associates to easily see schedules, swap shifts, request vacation time and more, all from their mobile devices. The solution should also embed corporate rules and route requests to managers for such things as time-off approvals, to ensure the right mix of employees who are up to speed on new processes. This will boost morale and employee engagement, while reducing burnout and turnover.

• Checklist/auditing and documentation functions: These support compliance and enable corporate-regional visibility into front-line activities. Just be sure to give associates mobile access to standard operating procedures, training guides, maintenance request forms, and operational checklists. This will promote safety and security, along with operational excellence.

• Cutting-edge retail inventory management: These enable such things as real-time visibility into assets, people, and processes in each relevant operational area, including the DC. Specific technology platforms to consider include: predictive supply chain analytics as well as mobile computing, scanning, sensing and printing. Just be sure to select solutions with 1D or 2D barcode scanning and RFID read capabilities. These will make employees more efficient in their jobs and keep the DC processes running with optimal efficiency.

The Takeaway

No matter when, why or how retailers decide to modernize their warehousing and DC operations, it is going to be a huge undertaking. And executing such a significant operational overhaul while adhering to new COVID-19 regulations makes the effort even more challenging, especially for front-line associates and managers charged with maintaining business continuity amidst the chaos.

If you want to improve fulfillment efficiency and accuracy without adding more complexity to your workflows, take a close look at your task management, workforce management and inventory management software solutions. Though the WMS may be able to push job-related data to employees, it may not be as actionable as you need it to be. Employees need to know the best next step to take every second of the day, especially given the fluidity of processes, expectations and regulations.  

If you’re interested in learning more about how technology can both ease and accelerate your DC transformation, visit our website or contact our team. We’ll be happy to discuss ways in which software can be applied within your current hardware architecture to help address current challenges and get you closer to your goals.

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Related Resource:

• Overcoming Labor Scheduling Challenges in Retail Warehouses and Distribution Centers