A survey conducted yearly by Peerless Research Group (PRG) asks about operational factors at Distribution Centers and warehouses, DC network, number of employees, average annual inventory turns, retaining labor, strategies for coping with peak demand, and use of temporary labor. 144 qualified responses were received from the surveys from professionals in logistics and warehouse operations. Compared to last year, there was a higher percentage of respondents and budgets for warehouse technology and systems have increase significantly. Respondents also plan to expand in areas such as square footage and more employees.
Respondents also found it challenging to find and retain labor and this became this years top concern. Inventory turns have also been down possibly due to the supply chain disruption and the pandemic. Distribution centers are planning to apply more automation in response to disruption. Macro trends such as labor shortages has motivate to mechanize or automate more processes. Labor availability issues have been increasing year by year and automation is a source of solution to this problem. More operations are using a greater number of temporary labor during peak volume periods.
There has been a rise in case and split case up from 8% last year. This indicates that more DCs are seeing e-commerce returns and smaller replenishments as part of e-commerce fulfillment changes. With space utilization, the most congested area in a warehouse is receiving, up from 18% last year. E-commerce continues to grow and companies will need to redesign their facility to handle the growth of e-commerce. There will be a greater use of technology-enabled order filing methods due to the rise of e-commerce.
Due to the supply chain disruptions, researchers see a move away from just-in-time inventory strategies to a ‘just-in-case’ approach with inventory. With the ongoing supply chain issues, this has caused operations to focus on smaller number of SKUs.
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