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The changing face of warehouses

Will social distancing, swipe cards and shift patterns become the new norm? Raghav Sibal, Managing Director for Australia and New Zealand at Manhattan Associates offers his thoughts on how warehouses are set to change during and post COVID-19.

We are currently witnessing a time of unparalleled polarisation within different sections of the global economy. The impact of COVID-19 on economies around the world has resulted in massive increases in redundancies, wiping out much of the positive growth since 2008. However, there are green shoots of recovery emerging, with some organisations and sectors experiencing record levels of consumer demand. Warehouses servicing the grocery sector are certainly one of the areas performing strongly.

Only last year the warehouse sector was experiencing a shortage in skilled warehouse workers, leading to fulfilment challenges around seasonal peaks such as Click Frenzy, Black Friday and Boxing Day Sales. Fast forward six months and with so much labour now seemingly available you could be forgiven for thinking that the challenges of the last decade would now be a thing of the past – not so unfortunately.
Instead, the challenges of 2019 have given way to a whole raft of new ones that COVID-19 has been a direct or indirect catalyst for, and which have fundamentally changed how warehouses operate.

Employee and technology flexibility
The restrictions and rigidity of certain systems and business models have been put under the microscope recently and there is a growing recognition of the need for flexible and agile solutions across all sections of the supply chain. But more than that, in a post COVID-19 environment, warehouse operations will likely be measured by more than just productivity and efficiency levels (while these will always remain important); they will also be measured by much ‘softer’ drivers too.

As supply chains were put under pressure due to COVID-19 consumer demands – in particular for items like toilet paper, non-perishable foods or personal protective equipment – warehouse staff had to step up their work output at the same time many others stayed at home. Now with the easing of lock down restrictions across Australia, the warehouse of tomorrow will need to put enhanced measures in place to support key supply chain workers, ensuring the right technology and conditions are in place to limit the daily risks. This may result in fundamental changes to warehouse operations, including how orders are fulfilled to eliminate the number of interactions present in the process.

Health and safety
Every organisation, big or small, will tell you that the health and well-being of its staff is paramount. Further to that, comprehensive health and safety plans while COVID-19 is still active in the community can also mean the difference between having happy, loyal, engaged staff and worried, inefficient, disengaged, workers.

There are a number of best practices warehouses can implement to manage the health challenges of COVID-19. These might include limiting numbers of worker in specific zones, adhering to strict social distancing measures while in the workplace or closing communal areas and limiting the numbers of seats per table in the canteens to avoid social interaction. Other changes could be using swipe keys rather than touch screen keypads and increasing shift rotations to maintain picking efficiency and productivity, while avoiding mental and physical health issues.

Some forward-looking organisations are even exploring the potential uses of biometric technology to monitor and manage the health of their employees and this is certainly a growth area of tech innovation that is likely to blossom far beyond the end of the current pandemic.

Businesses cannot sell what they cannot find
Online order levels grew to record highs following the recent mass retail store closures across Australia. This resulted in many businesses being simply unable to keep up with demand and struggling to find the right inventory to fulfil new orders. As a result, due to warehouse pressures, many retailers resorted to cancelling sales, or only partially fulfilling them. The common cause for these issues is that the business’ own warehouse management system (WMS) was telling warehouse managers that they had stock to sell, but because of the massive volumes going through their distribution centre (DC), often by the time orders were ready to pick-and-ship, the inventory was no longer available. This false record of inventory arises when an older Warehouse Management System (WMS) is in place that does not update inventory levels in real-time. Australian businesses that experienced this will need to evaluate their WMS in the near future and potentially look at a cloud-native system that can scale and flex with demand and instantaneously updates inventory details to ensure an accurate picture of stock on hand for sale and shipment every time.

The new form of normal
The impact of this pandemic will likely be felt in all sections of society and business long after a vaccine has been created and a new form of normal resumes. But, will we ever return to a state of ‘normality’ akin to 2019? Or did COVID-19 fundamentally change the way we look at employer-employee relationships in general, especially for key workers and core sectors like warehouses?

Whether you are an academic, warehouse manager, pharmaceutical manufacturer, head of supply chain or simply a consumer, the basic premise of supply and demand suggests that warehouses would be fully staffed and workers could expect flat wages with such large pools of potential employees currently available.

However, COVID-19 is changing accepted norms and employers are having to not only increase wages, but also to look into ‘softer’ forms of employee engagement and incentivisation too.

Much like opening Pandora’s box, I suspect it will be difficult to reverse these trends once the pandemic has passed, and ultimately it may prove no bad thing for employer-employee engagement and socio-economic balancing in the longer-term.

As we look ahead expectantly to a future free from COVID-19, warehouses and their important functions will be one of the key sectors driving economic recovery in Australia.

The last four months have certainly shone a spotlight on the vital importance of the warehouse space as the control room from which supply chains run and in turn, global commerce emanates. More importantly maybe, it has also highlighted the pivotal importance of the people and systems that make warehouses and supply chains function too.

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