Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Warehouses throughout North America are stocked to the rafters. The space crunch comes as e-commerce orders have exploded and companies stockpile inventory to avoid running short of goods amid disruptions like pandemic surges and labor shortages. The consequences are significant: Real estate specialists say the run on space in distribution centers is driving vacancy rates to new lows and rents to record highs.
The lack of storage space is making it tough for shippers and logistics service providers to manage their inventory, but some are getting help from the warehouse management system (WMS) software that controls the daily flow of goods through their facilities.
MOVE ’EM OUT, MAKE SOME ROOM
In traditional applications, retailers use WMS software to manage material flows solely “within the four walls” of a building, says John Santagate, vice president for robotics with Körber Supply Chain. That approach balances variables like labor, slotting locations, inventory levels, and fulfillment schedules in order to efficiently funnel goods into individual channels, such as e-commerce orders or store replenishment, inside a single facility.
However, that traditional approach may not be sufficient to keep product moving and free up storage space when the building is at capacity, a condition more and more companies are experiencing right now, Santagate says. With too much inventory in the building, goods that languish on the racks can quickly go out of style or pass their freshness dates, leaving warehouse managers with obsolete inventory taking up space that could be used for new inventory.
One response to that challenge is to minimize the amount of outdated product in storage by using a WMS that tracks and manages items not just by their stock-keeping unit (SKU) codes, but also by a wider range of attributes, such as expiration dates, sales history, or location while in transit, says Dave Williams, vice president of technology solutions at Westfalia Technologies Inc., which makes the Savanna.Net WMS product. By taking that fuller profile into consideration for each product, a WMS can help ensure that products are moved out of the warehouse before they become obsolete. One way it does that is by being “aware” of saleable inventory that may be located at other points in the supply chain—such as suppliers’ stocks or goods in transit—and allocating those items to fill orders, thus allowing organizations to get by with fewer goods within the DC.
A WMS can also help DCs make better use of storage space by deploying more efficient slotting strategies—for instance, by helping them configure their warehouses so that slower-moving products don’t interfere with faster-moving ones, Williams says.
To obtain these benefits, users enter precise data about each type of inventory they hold. “You have to know when a product is going to sell,” Williams says. “Then you can set the density of storage, avoid unproductive moves, incur the least amount of re-warehousing, [minimize] product damage, and utilize as much of your real estate as possible.”
OMNICHANNEL OPPORTUNITIES
Another way companies can leverage a WMS to more fully utilize precious warehouse space is to maintain the inventory used for both e-commerce and store replenishment orders under a single roof, says Adam Kline, senior director for product management at software developer Manhattan Associates. By leveraging the ability to manage goods for multiple channels in a single pool, an intelligent WMS can create “opportunistic” workflows, such as assigning multiple tasks to a warehouse worker in a particular row or aisle of the DC, according to Kline.
“In the old world, retail and e-commerce [operations] were in different buildings, sometimes even with different [enterprise resource planning] systems. But now it’s [all in] one building, [with] one software,” Kline says. “That allows you to understand who’s busy in the warehouse, where space is available, what’s the most intelligent way to get all the goods out on time, and keep that demanding customer at their keyboard happy.” Together, those improvements can lead to more efficient use of space, he says.
When merchandise for multiple channels is stored in the same DC, the WMS can create a “hybrid pick cart” that allows for multiple tasks on a single trip—not unlike asking a spouse to pick up a jug of milk while out running errands. In the warehouse, the software might assign a single employee to pick certain items into totes for retail replenishment, place other items directly into a shipping carton for an individual consumer’s order, and then move a third batch of goods back onto storage racks to replenish inventory for the next shift. Doing all three jobs in a single trip allows for more efficient use of a worker’s time, thereby helping companies move goods through the building more quickly.
EXTEND YOUR VIEW
Yet another way a company can leverage a WMS to help manage overcrowded warehouses is to use a cloud-based platform that extends its view over multiple DCs in different locations. With a multilocation WMS, users can manage inventory that is spread across several sites, reducing the need to carry every item in every DC, says Brad Wright, CEO of Chunker, a startup that provides a short-term warehouse marketplace for owners, tenants, and third-party logistics service providers (3PLs). Accessing inventory stored at different sites also helps users avoid congestion by allocating overstocked goods to be shipped out first.
Perhaps surprisingly, Wright argues that even in today’s tight real estate market, there is a lot of underutilized space available. That’s because vacancy rates are measured from the landlord’s perspective—whether they have leased the entire building or not—but individual tenants frequently have pockets of unused capacity in their own DCs, and they are eager to lease that space for extra income.
There’s no denying that DC space is a hot commodity in 2022, but the right software can help retailers and 3PLs rotate their goods, get orders out on time, and make space for those new pallets that just arrived at the dock door.
For the past seven years, third-party service provider ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
Photo courtesy of Dematic
For the past four years, automated solutions provider Dematic has helped support students pursuing careers in the STEM (science, technology, engineering, and mathematics) fields with its FIRST Scholarship program, conducted in partnership with the corporate nonprofit FIRST (For Inspiration and Recognition of Science and Technology). This year’s scholarship recipients include Aman Amjad of Brookfield, Wisconsin, and Lily Hoopes of Bonney Lake, Washington, who were each awarded $5,000 to support their post-secondary education. Dematic also awarded $1,000 scholarships to another 10 students.
Motive, an artificial intelligence (AI)-powered integrated operations platform, has launched an initiative with PGA Tour pro Jason Day to support the Navy SEAL Foundation (NSF). For every birdie Day makes on tour, Motive will make a contribution to the NSF, which provides support for warriors, veterans, and their families. Fans can contribute to the mission by purchasing a Jason Day Tour Edition hat at https://malbongolf.com/products/m-9189-blk-wht-black-motive-rope-hat.
MTS Logistics Inc., a New York-based freight forwarding and logistics company, raised more than $120,000 for autism awareness and acceptance at its 14th annual Bike Tour with MTS for Autism. All proceeds from the June event were donated to New Jersey-based nonprofit Spectrum Works, which provides job training and opportunities for young adults with autism.
The logistics process automation provider Vanderlande has agreed to acquire Siemens Logistics for $325 million, saying its specialty in providing value-added baggage and cargo handling and digital solutions for airport operations will complement Netherlands-based Vanderlande’s business in the warehousing, airports, and parcel sectors.
According to Vanderlande, the global logistics landscape is undergoing significant change, with increasing demand for efficient, automated systems. Vanderlande, which has a strong presence in airport logistics, said it recognizes the evolving trends in the sector and sees tremendous potential for sustained growth. With passenger travel on the rise and airports investing heavily in modernization, the long-term market outlook for airport automation is highly positive.
To meet that growing demand, the proposed transaction will significantly enhance customer value by providing accelerated access to advanced technologies, improving global presence for better local service, and creating further customer value through synergies in technology development, Vanderlande said.
In a statement, Nuremberg, Germany-based Siemens Logistics said that merging with Vanderlande would “have no operational impact on ongoing or new projects,” but that it would offer its current customers and employees significant development and value-add potential.
"As a distinguished provider of solutions for airport logistics, Siemens Logistics enjoys a first-class reputation in the baggage and air-cargo handling areas. Together with Vanderlande and our committed global teams, we look forward to bringing fresh impetus to the airport industry and to supporting our customers' business with future-oriented technologies," Michael Schneider, CEO of Siemens Logistics, said in a release.
I recently came across a report showing that 86% of CEOs around the world see resiliency problems in their supply chains, and that business leaders are spending more time than ever tackling supply chain-related challenges. Initially I was surprised, thinking that the lessons learned from the Covid-19 pandemic surely prepared industry leaders for just about anything, helping to bake risk and resiliency planning into corporate strategies for companies of all sizes.
But then I thought about the growing number of issues that can affect supply chains today—more frequent severe weather events, accelerating cybersecurity threats, and the tangle of emerging demands and regulations around decarbonization, to name just a few. The level of potential problems seems to be increasing at lightning speed, making it difficult, if not impossible, to plan for every imaginable scenario.
What is it Mike Tyson said? Everyone has a plan until they get punched in the mouth.
It has never been more important to be able to pivot and adjust to challenges that can throw you off your game. The report I referenced—the “2024 Supply Chain Barometer” from procurement, supply chain, and sustainability consulting firm Proxima—makes the case for just that. The company surveyed 3,000 CEOs from the United Kingdom, Europe, and the United States and found that the growing complexities in global supply chains necessitate a laser-sharp focus on this area of the business. One example: Rightshoring, which is the process of moving business operations to the best location, means companies are redesigning and reconfiguring their supply chains like never before. The study found that large numbers of CEOs are grappling with the various subsets of rightshoring: 44% said they are planning to or have already undertaken onshoring, for instance; 41% said they are planning to or have undertaken nearshoring; 41% said they are planning to or have undertaken friendshoring; and 35% said they are planning to or have undertaken offshoring.
But that’s not all. CEOs are also struggling to deal with the rise of artificial intelligence (AI) and its application to business processes, the potential for abuse and labor rights issues in their supply chains, and a growing number of barriers to their companies’ decarbonization efforts. For instance:
Nearly all of those surveyed (99%) said they are either using or considering the use of AI in their supply chains, with 82% saying they are planning new initiatives this year;
More than 60% said they are concerned about the potential for human or labor rights issues in their supply chains;
And virtually all (99%) said they face barriers to decarbonization, with 30% pointing to the complexity of the work required as the biggest barrier.
Those are big issues to contend with, so it’s no surprise that 96% of the CEOs Proxima surveyed said they are dedicating equal (41%) or more time (55%) to supply chain issues this year than last year. And changing economic conditions are adding to the complexity, according to the report.
“As inflation fell throughout last year, there were glimmers of markets stabilizing,” the authors wrote. “The reality, though, has been that global market dynamics are shifting. With no clear-set position for them to land in, CEOs must continue to navigate their organizations through an ever-changing landscape. Just 4% of CEOs foresee the amount of time spent on supply chain-related topics decreasing in the year ahead.”
Simon Geale, executive vice president and chief procurement officer at Proxima, added some perspective.
“It’s fair to say that the complexities of global supply chains continue to have CEOs around the world scratching their heads,” he wrote. “The results of this year’s Barometer show that business leaders are spending more and more time tackling supply chain challenges, reflecting the multiple challenges to address.”
Perhaps the extra focus on supply chain issues will help organizations improve their ability to roll with the punches and overcome resiliency challenges in the year ahead. Only time will tell.
Investing in artificial intelligence (AI) is a top priority for supply chain leaders as they develop their organization’s technology roadmap, according to data from research and consulting firm Gartner.
AI—including machine learning—and Generative AI (GenAI) ranked as the top two priorities for digital supply chain investments globally among more than 400 supply chain leaders surveyed earlier this year. But key differences apply regionally and by job responsibility, according to the research.
Twenty percent of the survey’s respondents said they are prioritizing investments in traditional AI—which analyzes data, identifies patterns, and makes predictions. Virtual assistants like Siri and Alexa are common examples. Slightly less (17%) said they are prioritizing investments in GenAI, which takes the process a step further by learning patterns and using them to generate text, images, and so forth. OpenAI’s ChatGPT is the most common example.
Despite that overall focus, AI lagged as a priority in Western Europe, where connected industry objectives remain paramount, according to Gartner. The survey also found that business-led roles are much less enthusiastic than their IT counterparts when it comes to prioritizing the technology.
“While enthusiasm for both traditional AI and GenAI remain high on an absolute level within supply chain, the prioritization varies greatly between different roles, geographies, and industries,” Michael Dominy, VP analyst in Gartner’s Supply Chain practice, said in a statement announcing the survey results. “European respondents were more likely to prioritize technologies that align with Industry 4.0 objectives, such as smart manufacturing. In addition to region differences, certain industries prioritize specific use cases, such as robotics or machine learning, which are currently viewed as more pragmatic investments than GenAI.”
The survey also found that:
Twenty-six percent of North American respondents identified AI, including machine learning, as their top priority, compared to 14% of Western Europeans.
Fourteen percent of Western European respondents identified robots in manufacturing as their top choice compared to just 1% of North American respondents.
Geographical variances generally correlated with industry-specific priorities; regions with a higher proportion of manufacturing respondents were less likely to select AI or GenAI as a top digital priority.
Digging deeper into job responsibilities, just 12% of respondents with business-focused roles indicated GenAI as a top priority, compared to 28% of IT roles. The data may indicate that GenAI use cases are perceived as less tangible and directly tied to core supply chain processes, according to Gartner.
“Business-led roles are traditionally more comfortable with prioritizing established technologies, and the survey data suggests that these business-led roles still question whether GenAI can deliver an adequate return on investment,” said Dominy. “However, multiple industries including retail, industrial manufacturers and high-tech manufacturers have already made GenAI their top investment priority.”
Regardless of the elected administration, the future likely holds significant changes for trade, taxes, and regulatory compliance. As a result, it’s crucial that U.S. businesses avoid making decisions contingent on election outcomes, and instead focus on resilience, agility, and growth, according to California-based Propel, which provides a product value management (PVM) platform for manufacturing, medical device, and consumer electronics industries.
“Now is not the time to wait for the dust to settle,” Ross Meyercord, CEO of Propel, said in a release. “Companies should approach this election cycle as an opportunity to thrive in the face of constant change by proactively investing in technology and talent that keeps them nimble. Businesses always need to be prepared for changing tariffs, taxes, or geopolitical tensions that lead to unexpected interruptions – that’s just the new normal.”
In Propel’s analysis, a Trump administration would bring a continuation of corporate tax cuts intended to bolster American manufacturing. However, Trump’s suggestion for spiraling tariffs may benefit certain industries, but would drive up costs for businesses reliant on global supply chains.
In contrast, a Harris administration would likely continue the current push for regulatory reforms that support sectors like AI, digital assets, and manufacturing while protecting consumer rights. Harris would also likely prioritize strategic investments in new technologies and provide tax incentives to promote growth in underserved areas.
And regardless of the new administration, the real challenge will come from a potentially divided Congress, which could impact everything from trade negotiations to tax policies, Propel said.
“The election outcome is less material for businesses,” Meyercord said. “What is important is quickly adapting to shifting policies or disruptions that address ‘what if’ scenarios and having the ability to pivot your strategy. A responsive manufacturing sector will have a significant impact on the broader economy, driving growth and favorably influencing GDP. One thing is clear: the only certainty is change.”