Optimizing Fulfillment Warehouse Operations In 2022
Disruptions in the previous two years have influenced all facets of warehouse fulfillment. Unheard-of problems have arisen as a result of port congestion, factory shutdowns, space restrictions, labor shortages, severe weather events, trade conflicts, growing delivery delays, tariffs, and expenses.
While many are eager to place the blame on the epidemic, the true problem is the rigid, conventional supply chain structures that are unable to respond rapidly to unforeseen changes
As we go beyond 2022 and beyond, there are opportunities in supply chain management even as there are uncertainties. Technologies and changes in consumer behavior are both driving forces behind these prospects.-
Given that many of these issues are likely to endure, here are four approaches to enhance fulfillment warehouse operations to build more dynamic supply chains and overcome interruptions in the coming year:
Chain of Supply Resilience
As was said in the introduction, warehouse fulfillment operations have faced some challenges lately. Multiple factors contribute to this, including manpower and material scarcity as well as transportation problems. Although those things are probably not permanent, the more widespread experience of interruptions has shown a spotlight on the issue of supply chain resilience.
In light of the experts’ predictions that many of these issues will endure, here are four strategies to enhance fulfillment warehouse operations to build more dynamic supply chains and overcome interruptions in the New Year:
Agility is a crucial component of a comprehensive approach to building supply chain resilience. You can react quickly to disruptions if your supply chain has agility built in. Even before the disturbance has an impact, you might be able to move.
You need knowledge, though, if you want your supply chain to be more nimble. Clarity is improved and decision-making is assisted by information, both of which are necessary for an agile approach. By creating digital supply chains that maximize integration at all points, more businesses can therefore be expected to increase supply chain resilience through 2022 and beyond.
Distribution and Fulfillment Networks
The demand for industrial real estate is being driven by an increase in e-commerce activity and supply chain disruptions, which is expected to lead to record-low vacancy rates and rising rents until the end of 2023. Since there is a severe shortage of warehouse space, many business owners still rely on a single central warehouse; last year, 41% of business owners self-fulfilled numerous channels from a single main distribution network.
Operating out of a single facility is inadequate in today’s uncertain world. Your entire distribution operation could be put on hold by a single incident of severe weather, a labor dispute, or other isolated interruptions. Businesses could consider additional strategies to expand their distribution and fulfillment networks in addition to supply networks and manufacturing, such as dark stores, micro-fulfillment centers, ship-from-store fulfillment, or even outsourcing to a third-party logistics (3PL) provider.
Delivery and Pickup Procedures
The COVID-19 pandemic enhanced e-commerce sales and imposed labor constraints, which made the driver shortage which has been a problem for the e-commerce sector for years even worse.
The last-mile delivery, which is the most expensive and time-consuming step in the shipping process, has been severely impacted by this.
Conventional package companies like FedEx and UPS will continue to raise surcharges and rates in 2022 in response to increased package volumes and capacity restrictions, which will cause more problems and increase costs for shippers this year.
According to a recent survey, the majority of vendors anticipate offering same-day delivery by 2025, up from the 35% who do so at the moment, despite present supply chain issues. In order to accomplish this, a lot of company owners are looking into backup delivery options and methods, such as on-demand delivery services like Instacart and DoorDash and in-store pickup alternatives like buy online pick up in-store (BOPIS) and curbside pickup.
Networks for Production and Supply
The present supply chain interruptions have affected business owners more severely who depend largely on foreign manufacturing. After the United States placed tariffs on Chinese goods in 2018, many furniture and textile manufacturers that had relocated their manufacturing from China to Vietnam were left in a precarious situation when the COVID-19 second wave swept through the nation last fall. With Hasbro claiming that $100 million worth of orders went unfulfilled in the third quarter of last year, port congestion, rising ocean freight prices, and capacity issues generated more problems for toymakers as the holiday season approached.
Even though onshoring is a significant project and might not be suitable for all businesses, it is imperative to grow your supply and production networks outside of your home nation.
Levi Strauss & Co., unlike many other dressmakers, survived disruptions effectively because of a diversified network that spanned more than 20 nations. This extensive network not only enables the denim company to shift production as necessary but also helps it optimize its supply chain to save costs and boost delivery and production.
Due to the national health problem, retail has seen tremendous transformation since only a few short years ago. Because of how quickly the e-commerce industry has expanded, warehouse fulfillment operations are now facing some challenging circumstances.
All of the developments on this list will assist warehouse, fulfillment, and supply chain operations in 2022 in being more effective, ambitious, and profitable. There are challenges in this period of change, but there are also incredible opportunities.
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