An answer to these challenges is innovative technology applied strategically along the supply chain: a worthy investment, given the existing – and projected – global e-commerce market share.
Move to omnichannel retail
While “retail” refers to the “offline” sale of products from a physical store, “e-commerce” concerns sales made exclusively online, fulfilled through door-to-door-delivery. With “omnichannel”, these two methods are collated together.
The customer benefits from omnichannel through more choice: how to place, fulfill and receive their order. At the same time, businesses can offer more options and reduce barriers to sales. The result? A faster, cheaper, and more seamless buying experience. However, this also generates new challenges for the supply chain which need to be addressed quickly to remain competitive.
Retail and e-commerce used to be fulfilled by separate sites, specializing in either bulk or smaller “convenience” orders. With the rise of “click and collect” and the likes as part of omnichannel retail, “retail” and “e-commerce” as fulfillment methods are becoming harder to distinguish.
However, emerging technology can help ease the pressure – no matter what the channel.
The challenges
Seasonal peaks
Seasonal peaks affect every industry, although throughout different times of the year. Some experience multiple peaks throughout the year. Retailers can often forecast when and how each peak is going to occur. This affects how they handle inventory for that period of time. To cope with these, additional seasonal workers are usually needed. With a small talent pool, recruitment and training costs and high turnover rate, companies face many challenges, including time spent on onboarding. On average, it can take up to four weeks to onboard a new team member to reach full productivity – there’s every chance peak has passed by the time this has happened. More new workers also increase the likelihood of mistakes which raises costs in terms of time, resource and capital for the employer.
SKU proliferation
An increasing number of different products combined with seasonal changes can create challenges when determining how to properly slot products. Popular products are placed near the packing area to reduce travel time for the team, less popular ones are moved farther away. This means less movement during peak, making operations more efficient.
Once peak is over, the warehouse needs to be rearranged to accommodate either the next peak, or “business as usual” movement of products. Apart from this process being labor-intensive, a large amount of space is also taken up by products which only sell during their specific seasons.
Returns
Hand in hand with the increase in e-commerce goes the rise in returns. This is more prevalent as omnichannel becomes the norm. In 2019, total merchandise returns accounted for $309 billion in lost sales for US retailers.
Unfortunately, the ever-growing, labor-intensive returns process is also difficult to automate. Returned items must be inspected by a person and assessed for its suitability to be resold. Another challenge, especially given the labor shortages.
This process also takes up space in the warehouse, such as tables for people to stand at to inspect the products. This space could be used more profitably.
The technology solutions to tackle those challenges – pt. 1
Voice-directed work
Voice-directed work makes operations faster and more accurate with hands and eyes-free operation. Directions are sent to the worker’s headset and confirmed verbally by them once completed. Their responses are being sent back to the system and a new direction can be given. So, how does voice-directed work address the challenges mentioned above?
Labor shortages: Thanks to a streamlined and standardized process every worker is following as part of voice-directed work, workers can be more productive. This leads to productivity gains of up to 35%. This means you can do more with your existing staff and potentially alleviate the need for temporary workers.
These productivity gains lead to significant decreases in the time it takes to complete tasks, freeing up workers to take on different processes. Parts of the returns process, for example, can be handled with voice-directed work as well. Workers receive and give voice commands opposed to reading and inputting them using a screen. So, during the returns process, all hands and eyes will be focused solely on the products themselves.
Onboarding and training: Voice is incredibly easy to pick up, which reduces training time for new staff significantly. That means you can get them up to full productivity from as little as the time of a single shift, freeing your most valuable team members for other important tasks, rather than taking time out for onboarding activities.
Cost-management: With voice-directed work, the reliance on temporary workers decreases, resulting in less outgoing costs on recruitment and training. Plus, using voice also increases accuracy, ultimately leading to fewer mispicks. That also means your customers are less likely to receive the wrong item, which ultimately decreases the likelihood of a return.
Other options
Of course, voice-directed work is not the only technology solution that can support you in your operations. In part two of this blog, we will address the benefits of automation and robotics in your warehouse which can work alongside your workforce and also be combined with voice-directed work.
