In the last two years, every aspect of warehouse fulfillment has been impacted by disruptions. Port congestion, Factory shutdowns, space restraints, labor shortages, extreme weather events, trade conflicts, increasing delivery delays, tariffs, and costs have caused unheard challenges.
While numerous people are quick to blame the pandemic, the real issue lies in the inflexible, traditional supply chain models that are incapable of quickly reacting to unprecedented changes.
Though there are doubts, there are also opportunities in warehouse and supply chain management as we focus on 2022 and beyond. Those opportunities are guided by technologies, as well as by alterations in consumer behavior.
With experts anticipating many of these problems persisting, here are four ways you can improve fulfillment warehouse operations to create more energetic supply chains and succeed over disruptions in the New Year:
Supply Chain Resilience
As mentioned in the opening paragraph, it has been a tough period for warehouse fulfillment operations. The reasons are varied and include labor and material shortages, and shipping issues. Those things most likely won’t last forever, but the more general experience of interruptions has radiated a spotlight on the problem of supply chain resilience.
Creating a supply chain resilience requires a wide strategy, with agility being a necessary factor. With agility merged into your supply chain, you can move when disruption takes place. You might even be able to move before the disruption has an effect.
However, if you want your supply chain to become more agile, you need information. Information increases clarity and helps with decision-making, both of which are needed for an agile approach. Therefore, we can expect more companies to establish more supply chain resilience throughout 2022 and beyond by making digital supply chains that optimize integration at all points.
Distribution & Fulfillment Networks
The increase in e-commerce activity and supply chain interruptions is driving the want for industrial real estate, resulting in record-low vacancy rates and growing rents that are assumed to continue through the end of 2023. With warehouse space greatly limited, many business owners still rely on a single central warehouse, with 41% of business owners self-fulfilling multiple channels from one major distribution network last year.
In today’s uncertain world, it is no longer enough to operate out of a single facility. One bad weather, labor strike, or other localized interruptions can bring your whole distribution operations to a standstill. In addition to supply networks and manufacturing, businesses should explore other ways to increase their distribution and fulfillment networks, such as dark stores, micro-fulfillment centers, ship-from-store fulfillment or even subcontracting it to a third-party logistics (3PL) provider.
Delivery & Pickup Strategies
While the ecommerce industry has been facing issues with a driver shortage for years, this issue was further worsened by increased e-commerce sales and labor restrictions due to the COVID-19 pandemic. This has had a harsh impact on railway shipping as well as last-mile delivery, the most costly and tedious part of the shipping process.
In response to increasing capacity constraints and package volumes, conventional parcel carriers like FedEx and UPS are continuing to increase surcharges and rates in 2022, creating more issues and costs for shippers this year.
Despite current supply chain problems, most sellers plan to offer same-day delivery by 2025, up from the 35% that do so today, according to a recent survey. To achieve this goal, numerous business owners are exploring backup delivery providers and strategies, including on-demand delivery services like Instacart and DoorDash and in-store pickup alternatives such as buy online pick up in-store (BOPIS) and curbside pickup.
Manufacturing & Supply Networks
Business owners that depend heavily on overseas manufacturing have been hit a bit harder by current supply chain disruptions. Numerous furniture and apparel manufacturers that transferred production from China to Vietnam after the U.S. imposed tariffs on Chinese products in 2018 were left in a wobble when the second wave of COVID-19 swept through the country last fall. Port congestion, inflated ocean freight costs, and capacity shortages caused more headaches for toymakers going into the holiday season, with Hasbro reporting that $100 million worth of orders went unfilled in the third quarter of last year.
While onshoring is a heavy undertaking and might not be appropriate for all companies, it is essential to expand your supply and manufacturing network beyond one country. Unlike numerous other dressmakers, Levi Strauss & Co. fared well through interruptions, thanks to a diverse network that spread over more than 20 countries. This vast network not only allows the denim brand to move production when essential but also maximize its supply chain to reduce costs and increase delivery and production speeds.
Retail has significantly changed than it was just a couple of short years ago, thanks to the universal health crisis. The ecommerce market has grown nearly beyond recognition, placing warehouse fulfillment operations in some tough positions. All the trends on this list will help warehousing fulfillment and supply chain operations improve throughout 2022, becoming more productive ambitious, and efficient, while also increasing revenue. It is a time of transformation, and that brings issues, but there are breath-taking opportunities too.
Contact us today at Fulfillman to know more about our services. We specialize in providing excellent Drop Shipping services, Warehouse fulfillment, China sourcing, Third Party Logistics, and so forth. Our dedicated experts will be available to speak with you and discuss the options available to you. We guarantee you get quality and excellent services that gives 100% client satisfaction.