Amidst the raging pandemic and the reinstatement of the new normal, the year 2020 pushed the panic button for warehouses and supply chains globally. In May 2020, the volume of international trade and logistics dipped by 17.7% affecting small and mid-scale businesses the worst. It was time to rethink the norm and refigure the role of warehouse and inventory management in businesses.
WMS has already been trudging on the automation and AI route to attain better efficiencies, no doubt. But the unprecedented rise of e-commerce and the failure of supply chains during the pandemic has pushed the need for robust mechanisms and tech integration in WMS. Resilient and effective solutions have become essential for bridging last-mile deliveries in not only the retail sector but also the healthcare and pharma industry.
As the warehouse management industry is still settling with a new outlook in place, we, at Barcode India, ask what significant trends would rule the year 2021. Here are our top picks in 2021 WMS trends:
#1 Improved Warehouse Management Systems
The en-masse discovery of ease of shopping via e-commerce coupled with the ever-increasing consumer wants during the pandemic has made inventory management and warehouse space requirements almost delusional for companies- whether SMBs(Small and medium businesses) or multinationals. Warehouses just aren’t any space enclosed within the four walls now; they are transforming beyond geographical, logistical and aesthetic factors.
A single company can have a number of SKUs (Stock Keeping Units) located across states and nations. These SKUs can be interlinked and consolidated using advanced Warehouses Management Systems such as BCI’s MobiVue that helps to identify and trace inventory movements in real-time for increased location-wise visibility, order fulfilment rates and guided labor management.
#2 Automation and Robotics in Warehousing
Warehouse automation continues to remain one of the leading trends to cut labour costs and boost productivity via efficient technologies in place, like automated guided vehicles (AGVs) and automated storage and retrieval systems (ASRS). Over the next five years, the warehouse automation market is expected to grow at a CAGR of 12.6%. With automated solutions in place, WMS solutions can help improve customer service and space optimization in the wake of increased demand, the complexity of operations and multiple SKUs. MobiVUE solutions also help in real-time tracking of assets between locations via seamlessly integrating with ERPs and AIDC technology.
Source: Interact Analytics
Automation goes beyond hardware or robotics when we talk of warehouse and logistics management. It is seeping into multiple tasks as an add-on in asset management tasks such as labelling and recording, transport and shipping solutions, consumer demand predictions, etc.
#3 Greater Reliance on Machine Learning and Artificial Intelligence
Knowledge-rich warehouse management systems such as BCI’s Item Level Intelligence are another emerging tool to tackle customer demand and preferences, especially during current times. SMBs can save a lot on capital and space using machine learning to study the patterns of consumer demand. Amazon fulfilment centres in the US already have barcodes and RFID scanners in place that provide valuable information about the origin, destination, price, stock levels of a product through a single scan of the barcode of a particular product. Organizations can streamline their operations and balance their inventory turnover ratio by integrating Big Data and machine learning.
Many major SCM and WMS companies are working to embed their existing processes with AI and machine learning to differentiate themselves from the pack. AI algorithms when applied to the mines of historical real-time data provide valuable predictions for unique customer case forecasting.
#4 Increased Focus on Omnichannel Management Solutions
The pandemic has made it pertinent for companies to diversify their potential in varied channels like physical retail outlets, wholesale, e-commerce, DtoC solutions and other such platforms. Lockdown restrictions and safety regulations had a huge impact on the physical marketplace. With an omnichannel management solution in place, companies can consolidate demand, increase service levels, reduce cost and earn profits by interlinking each chain.
The usual brick and mortar environment makes inventory management easy due to the immediacy of transfer of ownership. While online platforms might suffer from management issues. Due to the time gap between the transfer of ownership and the actual delivery of products and multiple distribution channels, the task of managing the inventory becomes herculean. Under a robust omnichannel management solution, regular inventory reconciliatory exercises can omit to stockpile, while order routing and shipment automation can help address multi-distribution centre management.
#5 Blockchain Integration in SCM and WMS
Blockchain has proved its umpteen utilities in reshaping supply chain management to track and trade real-time delivery of goods. Companies are, next, vouching for blockchain adoption in warehousing use cases. Via disintermediation and the use of smart contracts, logistics solutions can be made more cost-effective, transparent, scalable and efficient. Being a decentralized tech, it can easily rise up to the current requisites of the warehousing industry across borders and processes such as production, procurement, storage, transportation, etc. The journey of each item, with its unique node on the blockchain, can be studied and tracked in real-time No wonder, the worldwide spending on blockchain solutions is expected to cross the 11.7 billion mark as per a DHL and Accenture report.
#6 Increased Demand for Temperature-sensitive Pharmaceutical Drugs
WMS is becoming a much sought after panacea to tackle the supply-demand equilibrium in the pharma industry as well. The cold warehouses have become essential for stocking temperature-sensitive vaccines and medications, for instance, Insulin that needs to be stored at a particular temperature only to retain its efficacy. At other times, some vaccines must be stored at a temperature of minus 70 degrees celsius. Companies face the challenge of supply chain monitoring and product traceability across nations.
An enterprise network platform providing both the utilities of WMS and SCM can help in timely delivery of such drugs in times of emergency. Such systems can assist the governments scrambling to gather necessary drugs and provide essential healthcare facilities. The severe shortage of pharma drug Remdesivir during the pandemic can be taken as an example of severe management crisis on part of the government and pharma companies. The origins and authenticity of a particular drug can also be tracked using such systems.
#7 Enhancement in Production of Vaccines, Biologics and Hormone Medications
Currently, many government-run vaccine supply chains struggle to maintain the quality and availability of vaccines through the supply chains and at delivery points respectively. Governments, owing to a lack of resources and availability of skilled personnel, often look for alternatives to outsource the responsibility of production and supply chains to the private sector.
The outsourcing can be done at two levels- one where the service provider manages one or more functions in the supply chain as per well-established global standards and other where the service provider provides vehicles or cold chain equipments or manages them under a pre-defined maintenance contract. In 2008, the US vaccine supply chain process was outsourced to a private distributor that had best practice in supply chain management. The changes reduced the delivery time from up to 4 weeks to 3 to 8 days and an overall ROI of around $400 million.
#8 Greater Investments in Direct D2C Channels
A WEF report estimates that by 2030, 60% of the earth’s population will be living in cities. This statistic added to the growing e-commerce needs means the logistics industry would have to channel its major investment in last-mile initiatives. Also, a shift towards experiential shopping is a growing trend in DtoC channels given the meteoric rise of e-commerce portals.
A 2021 Mordor Intelligence report says that last-mile delivery costs account for more than 50% of the overall cost of logistics. Businesses would, therefore, need to optimize their direct-to-consumer channel to counter competition. Expansion of e-commerce channels that can handle multiple choices and variations in items, streamlining the management of returned inventories would be the few essentials of a robust DtoC inventory management solution.
Each year, the warehouse and inventory management solutions are transforming businesses and getting transformed in the process. We witness new technological innovations lending themselves to optimize systems and operations across industries often. It wouldn’t be wrong to say that WMS solutions are becoming pertinent to the success of any product-driven business, provided they keep themselves updated and in tune with the latest trends and tech innovations in WMS.