In part 1, we discussed the imperatives that cultivate great customer experiences and advance logistics operations to tackle omnichannel challenges. In this part 2 of this article, we will continue to explore some more imperatives.
Managing Labor Shortages Means Working Smarter, Not Harder
It’s certainly no secret that the global logistics industry, like many other industries, is closing out 2021 in the midst of a true labor crisis. According to the US Bureau of Labor Statistics, the pandemic resulted in a loss of 6% of the pre-COVID truck transportation workforce of about 1.52 million employees. While some recovery has been made, employment levels are still short of February 2020 levels by 33,000 jobs.
Headlines are filled with dire predictions about how 2022 will be characterized by continued shortages of drivers, warehouse associates and other critical logistics professionals.
In their 2021 State of Supply Chain Execution Report, Blue Yonder and Reuters Events found that 63% of retailers and manufacturers have been affected by the availability of labor over the past year. The most common way companies are attempting to optimize their human resources is via the deployment of warehouse labor management solutions.
Twenty-five percent of respondents are using warehouse robotics, a trend that Blue Yonder expects to continue. Robotics and task automation make the most of limited human resources, while also freeing available employees to focus on strategic work instead of manual labor.
But perhaps the most promising way to maximize the contributions of the workforce is to leverage advanced technology, including AI, to allow human employees to work smarter, not harder. The entire world owes a huge debt to the drivers, warehouse associates and other essential logistics workers who kept supply chains moving during the worst months of the pandemic. But state-of-the-art technology can help automate decision making, reconfigure processes, support more efficient workflows and implement best practices that significantly amplify human efforts. Technology can relieve some of the burdens of overtime and excessive stress that logistics team members have been experiencing since early 2020.
Explore Digital Systems to Advance Toward Seamless Omnichannel Fulfillment
Because warehousing and transportation operations represent great opportunities to improve competitiveness but at the same time they are significant cost centers, intelligent logistics decisions are critical. And, more than ever, these decisions have to be made on the fly, in real-time. How can these operations move at digital speed?
1. Digital Warehouse and Labor Management
To enable faster omnichannel fulfillment, retailers, manufacturers and 3PLs are actively (and even frantically) improving physical and operational logistics footprint and the supporting processes and systems. A large percentage of distribution centers being built are micro-fulfillment centers and forward distribution centers. In the network of distribution centers, complex or simple, operations are handling smaller omni-channel orders. They are adopting robots and co-bots to supplement warehouse labor. They need better network visibility to handle with disruptions.
Going digital in the warehouse and the distribution network is an irreversible trend. Warehousing and transportation are significant cost centers. In additional to service-related performance, improving cost to serve, throughput, and profitability are additional motivations to accelerate the digital journey. The new logistics solutions including warehouse management need to provide:
- The means to better resource assignments for human labor and robots/co-bots
- Seamlessly integration integration with automation and robotics systems
- Extensive order and network inventory visibility, delivery status, and the means to handle disruptions and returns
- Real-time decision-marking for unified warehouse and transportation processes and exception-handling
The warehouse has grown in strategic importance but, at the same time, it has been challenged by extreme global labor shortages and high turnover — with no apparent end in sight. It is imperative that warehouse operations make the greatest possible use of its limited labor resources to deliver high service and drive financial outcomes. The new labor solution provides a real-time, granular view of workforce performance, providing a basis for coaching and continuous improvement.
2. Digital Transportation Management
New customer realities have changed business, and transportation management. It is delivery speed, not loyalty that matters most. Immediate availability outweighs product range. “Delivery on my terms” is an expectation. As a result, shippers and logistic service providers must make their transportation network more:
- Visible and transparent, even outside their own walls
- Predictive when inevitable disruptions occur
- Autonomous, for significant speed and cost savings
- Responsive to changing real-time conditions
Digital transportation management provides intelligent orchestration of a wide range of shipping assets, nodes and network designs. Digitization is delivered in an easy-to-consume cloud delivery model that supports an easy, rapid implementation – and an accelerated return on investment. Reimagine the shipping network with flexible multi-modal delivery model across the traditional supply chain network with expanded carrier connectivity. Continually identify the most efficient and lowest-cost network to satisfy business needs.
For example, Traxion, Mexico’s largest logistics provider, brokers services and optimizes loads, capacity, freight and routes via an AI-enabled optimization engine that gathers real-time data and autonomously makes the best decision on the fly, without human intervention. This dramatically cuts down on the physical and analytical demands placed on supply chain professionals every day.
And the entire transportation network can course-correct in real time, updating network-wide plans to provide better business outcomes. With integrated transportation planning and execution, logistics operations can benefit from:
- End-to-end exception visualization, prioritization and autonomous resolution
- Dynamic re-planning, based on real-time changes in order, shipment and inventory status
- Unified inbound and outbound logistics
- Seamless access to the extended carrier and supplier network
We will explore other top logistics imperatives in subsequent articles.