In the warehousing industry, the COVID-19 pandemic created several new warehouse problems and challenges that are putting companies under pressure. Understanding these modern problems of warehousing is key to adapting and finding a path to success.
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In this blog, we’ll cover five of the most important warehouse challenges businesses must tackle in the post-pandemic era. We’ll discuss why they are important to tackle and some solutions to help you overcome the challenges.
5 Major Warehouse Problems & Challenges After the Pandemic
1. Accelerated e-Commerce Growth
Retail e-commerce sales experienced a strong boost during the pandemic. That accelerated e-commerce growth has remained even after most in-person stores have opened back up. This suggests that the pandemic pushed customers online and they intend to continue buying products over the Internet.
But e-commerce growth should be a good thing for businesses, right? In some ways, this growth provides great opportunities for companies to reach more customers and increase their sales. In other ways, the unprecedented e-commerce growth creates problems for warehousing businesses as they try to keep up.
Companies need to boost efficiency to meet the increased e-commerce demand. If customers notice that you aren’t processing and delivering orders quickly to meet the demand level, they will soon turn to your competitors instead.
Take a look at the policies and procedures currently in place in your business. Where is there room for efficiency gains? What can you change to get your customers their products faster without compromising quality? These are questions you’ll need to answer to keep up with the growing e-commerce demand. The right tools can help you overcome this warehouse problem, like a strong warehouse management system (WMS).
2. Need for Real-Time Inventory Visibility
Another warehouse problem highlighted by the pandemic was a need for complete inventory visibility. You can’t meet demand and satisfy your customers if you don’t manage your inventory properly. And the best way to resolve this warehouse challenge is with real-time inventory visibility.
Real-time inventory visibility means you can see and track your current inventory levels at all times. You never have to wonder how much inventory you have when you have real-time visibility. And, you can check your inventory levels from anywhere since modern WMS are built as web applications, which means it can be accessed through any browser.
3. Shift from Just in Time (JIT) to Just in Case (JIC) Strategy
There are two main schools of thought when it comes to managing inventory—the just-in-time (JIT) philosophy and the just-in-case (JIC) philosophy. Companies using a JIT strategy focus on having their inventory arrive exactly when they need it, not before. They will generally replace inventory only as they use it.
The JIT strategy was very popular before the pandemic because it minimizes the cost of storing excess inventory. You only keep enough inventory on hand to meet your short-term needs. This strategy works well when companies have reliable, quality suppliers and don’t experience any significant supply chain issues. As the pandemic proved, however, unexpected disruptions to the supply chain can happen at any time. Just-in-time systems don’t hold up to these disruptions.
Companies need a way to manage higher inventory levels effectively. That’s where the just-in-case inventory strategy comes into play. The JIC strategy emphasizes higher inventory so companies are prepared for unpredictable demand shifts. Making this shift can be difficult, though, and managers must implement the right tools to manage this increased inventory.
Software like a WMS can not only make managing current inventory levels easier but also lead to better inventory forecasting. That way, businesses can find the right middle ground between keeping enough inventory for the JIC strategy and wasting money by storing too much inventory. Be sure to implement the right type of warehouse management system for your business to get the most out of the software.
4. Need for Smaller Decentralized Warehouse Locations
Traditionally, companies used centralized warehouse locations where they kept their entire inventory. This worked for a while, but it’s clear now that businesses need smaller, decentralized warehouse locations to keep up with their competitors. Decentralized warehouses allow businesses to deliver their products to customers faster and more frequently—exactly what today’s customers demand.
However, one warehousing problem that arises from having more decentralized warehouse locations is that warehouse organization and management get more difficult. Instead of managing a single warehouse, companies need a method to efficiently manage many different warehouses spread out across their operating areas.
Once again, certain warehouse management systems can help solve this issue. Some WMSs allow users to manage multiple decentralized warehouse locations from a single centralized platform. You get the benefits of decentralized warehouses without all the headaches of managing them manually.
5. Labor Shortages
It’s no secret that the warehousing industry is currently dealing with significant labor shortages. Many warehouse laborers permanently left the profession due to a variety of factors during the pandemic, and companies are struggling to fill their warehouse positions. The majority of executives believe labor shortages have hurt their ability to meet customer demand. So not being able to find and hire qualified warehouse workers is another problem that can have disastrous consequences.
The solution to the warehouse labor shortage problem is twofold: businesses need to implement automation to eliminate some of the demand for employees, and they need to increase the efficiency of the current workforce. Investing in technology and automation may also make the industry more appealing to younger generations, helping to attract more young talent.
The COVID-19 pandemic created many new warehouse problems that business leaders must address. From accelerated e-commerce growth to a need for decentralized warehouse locations, there’s no shortage of warehouse challenges to contend with. Applying comprehensive warehousing and inventory tools like a WMS is the best way to tackle these warehouse issues.
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