Well before “social distancing” became part of the business vernacular during the COVID-19 crisis, savvy supply chain managers were already seeking to mitigate risk by putting some distance between workers in the warehouse.
At the same time, Fortune 500 companies were investing in new technologies in pursuit of greater efficiencies. The urgency for such a combined strategy has led to the inevitable, says Greg Cronin, a consultant widely regarded as “the father of warehouse management systems (WMS).”
“Greater reliance on automated solutions will be a given from here on out,” he says. “The pandemic made it clear that humans in this environment make supply chains vulnerable to failure.”
“A ‘long-tail’ business strategy is going to continue to dominate warehouse management,” he contends, “since this allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers. This will always be preferred to only selling large volumes of a reduced number of popular items.”
Long tail is made possible by the lower cost of storing and stocking, with near-unlimited potential for distributing products. Centralized warehouses are substantially less expensive stocking locations than retail chains with local stores. Winners achieve better distribution, logistics, inventory management and warehousing, and ultimately have more data to determine how to price and scale.
Until recently, however, businesses have been challenged to find and keep an adequate workforce that’s qualified to maintain the necessary distribution velocity. Cronin champions a robotic labor system, comprising robotic picking technology where the robots can function independently or alongside human workers (especially during peak periods) for as many as three shifts, resulting in increased volume throughput.
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