Amidst foggy and uncertain times such as the Covid-19 pandemic, the business ecosystem across the globe had to make permanent changes in order to sustain and survive. But every cloud has a silver lining as entrepreneurs and business owners are gradually experiencing more seamless operational success whilst they continue to restructure their supply chains to prevent further crises.
Thanks to the pandemic, the world is greeted with the accelerated adoption of e-commerce. Having said that, however, how sustainable or scalable is a business if it has loopholes in one of its key aspects- its distribution strategy?
To answer that question, we must first identify the different distribution channels utilised by businesses to ensure that their customers have enjoyable retail experiences.
Rise in Business Distribution Channels
The impossible in the past has now been made possible through digitalization. With warehouse modernization, businesses can now smoothly and efficiently cope with the rising needs of consumers through a plethora of distribution channels that has to be managed concomitantly:
- Store-to-customer
- Warehouse-to-store
- Store-to-store
- Warehouse-to-customer
- Customer-to-warehouse
- Warehouse-to-alternative pick-up location
- Customer-to-store
In a dynamic era where customer trends can change rapidly and without warning, warehouse modernization is the solution for businesses to stay on top of omnichannel fulfilment. This is to ensure that various demands can be met succinctly through its automation prowess.
Channels which have always been important but were often under-utilised by the public such as Customer-to-store (e.g. customers returning products) or Warehouse-to-alternative pick-up locations (e.g. customers receiving the parcel at another pick-up point) are now conventional ideas embraced by the generic customer. The ability (or inability) in implementing such channels can dictate a business’ legibility in the customers’ eyes.
However, having diversified channels of distribution is also a double-edged sword in the sense that businesses will inevitably have a harder time trying to locate stocks for each channel given the additional layers of management that the warehouse would then have to carry. On top of that, warehouses that still rely solely on manual processes will experience unnecessary inefficiencies and time wastage due to the cumbersome process of communicating and relaying information in regards to the following procedures to take for each of those stocks. In order to prevent said issues, warehouse modernization - which is a concept that has already been popularly adopted in other markets, is slowly gaining traction among the South East Asian business scene.
Warehouse Modernization and The Role of Warehouse Management Systems (WMS)
The reason warehouse modernization has been neglected for the longest time can be attributed to pre-pandemic times where e-commerce had not yet had the opportunity to flourish. Many ‘modern’ businesses nowadays are still relying on traditional systems of record-keeping for their warehouses such as the utilisation of Excel spreadsheets or even handwritten documentations. This inevitably invites room for errors and ultimately, inefficiencies due to its nature of necessitating manual input.
In implementing warehouse modernization solutions, businesses are essentially adopting a contemporary approach through working collaboratively with different technologies to achieve optimised work automation in warehouses. One of those technologies - warehouse management systems, or WMS for short, is a key element in defining warehouse modernization. WMS acts as a system of record (SOR) that provides visibility into a business’ entire inventory and effectively manages operations across its multitude of distribution channels.
Effectuating warehouse modernization using WMS does several things for a business. Out of the many achievables of WMS include heightened stock control and accuracy; omission of data entry that ensures data collection is accurate; real-time tracking of stocks resulting in faster inventory turnover; and optimization of warehouse space. With the centralised data and information, WMS can take a further leap and provide calculated suggestions and guidelines for each inventory. In resolving the fundamental warehouse issues that have plagued them over the last few years, businesses will be able to enhance their customer service and workflow given that manpower and resources can be allocated to perform other tasks.
Besides WMS tracking every single movement of each piece of inventory, it also adds visibility to the day-to-day operations within the warehouse itself (e.g. shifting of items), automates the inventory handling processes (e.g. devising the optimal route/next step to go through for each inventory), and acts as a point of integration for all the latest technologies (e.g. RFID, Barcodes, BLE, IoT devices).
Into The Future of Warehouse Modernization
Automation is a vital aspect of warehouse modernization, and could perhaps be the ultimate goal of many existing warehouses of this day. Having day-to-day operations performed by an AI or robotic system essentially makes each warehouse a self-sufficient and self-functioning contributor to the overall supply chain.
Warehouse modernization comes in stages and each phase a business goes through to achieve that addresses a problem or need at the specific interval. As long as technology continuously evolves, a ‘completion stage’ in warehouse modernization is just an abstract ideal. For instance, a warehouse may have achieved modernization to a certain degree by installing 2D barcode technologies but that is not a future-proof implementation as technological advancements in the future necessitate novel improvements to the overall process of warehouse management
In the foreseeable future, warehouse modernization will involve enhanced data intelligence systems interlinked simultaneously with their respective companies to provide data analytics that uncover deployable methods to improve warehouse functions (e.g. updating warehouse design; changing employee workflows). The kind of data collected will also be more insightful and relevant, providing companies the ability to identify or predict changes that may be of concern to the overall profitability of the business such as potential supply shortages and changing buyer habits.
Essentially, warehouse management is comparable to building a house in that there will be foundational consequences that tenants have to face in the future, should the parties involved refuse to invest in appropriate building materials. Similarly, investing in WMS as part of achieving warehouse modernization serves not only as a means for businesses to acquire operational and sustainable growth models, but also to ensure that their warehouses are well-equipped enough to endure sudden tidal shifts such as the Covid-19 pandemic.
