The silver lining of hope for recovery through the prevailing challenges lies in adopting digitalization and automation solutions. An ideal combination in this scenario would be to couple the scanty labor resources with automation. This will be a symbiotic partnership that will bring reliability, efficiency, and safety in operations. Even in the current situation, there are digitalization and automation solutions that can be easily implemented in no time, shares Rupesh Narkar, Director – Sales for Logistics Automation MNC.
COVID-19 caused a whirl wind globally and pushed the businesses worldwide into an unforeseen crisis. In a matter of weeks, the otherwise optimistic outlook and aggressive earnings guidance for 2020 by businesses were brought to almost a screeching halt. Situation is same on the investment inflows, which is worrying. As per the estimation by United Nations Conference on Trade and Development (UNCTAD), the outbreak could cause global FDI to shrink by 5%-15%, due to the downfall in manufacturing sector coupled with factory shutdown. The negative effects of COVID-19 on FDI investments are expected to be high in the energy, automotive and airlines industries.
Rupesh Narkar
THE COVID-19 IMPACT ON OPERATIONS, WAREHOUSING & FULFILLMENT
As highlighted by Interact Analysis, different warehousing sectors are feeling the effects in different ways. General merchandizing, for example, is seeing a massive short-term spike in e-commerce demand. It is appearing that this demand is largely being unmet by retailers on account of social distancing restrictions. Crisis management and capital preservation is also leading these retailers to pause their capacity enhancement plans.
An Accenture Report highlights that while in the short-term, supply disruption will reduce manufacturing and assembly capacity, plant reopening will be further delayed by lags in component supply. Travel bans will exacerbate workforce shortages, ultimately affecting the operations and fulfillment capacities of businesses.
Due to the epidemics of COVID-19 across the globe, the manufacturers of the automobile, chemical, electronics, and aircraft are facing concerns regarding the availability of raw material. In the electronics sector, smartphones and consumer electronics companies have commenced a reduction in production operations and postponed the introduction of new products coupled with the COVID-19 outbreak, which in turn has interrupted the supply of components.
SURVIVAL & THRIVING OF TECH
While almost all businesses were hampered by COVID-19, the e-commerce sector worldwide saw record growth numbers. Revenues, user additions, sales were growing rapidly. E-com businesses reported revenue numbers to the tune of entire quarter being achieved in a matter of weeks. For many customers, buying habits have already changed. Not just for the short term, but for long term too. Driven by the popularity, convenience and safety, more and more consumers will move to e-shopping platforms. Business are transforming their sales model to cater these new class of consumers, which is nurturing their growth and survival.
NEW NORMAL AND ITS CHALLENGES FOR BUSINESSES
With E-commerce booming worldwide, online businesses are witnessing a large inflow of user additions. “Buy it online” is becoming the new normal. But growth for these businesses could not have come at a more inopportune time. Most of them, still in the nascent stage or establishing operationally, are now experiencing massive challenges to fulfill these orders, thanks to the absence of labor, lockdowns, and resource challenges. With reputation at stake in a cutthroat competitive environment, they are experiencing downpour of issues on several fronts. It is a perfect double-edged sword that brought massive growth on one hand and daunting fulfilment challenges on the other, that too at unprecedented levels.
The silver lining though is this COVID situation exposing issues and vulnerabilities by poking holes in their operations strategy, early in the game. They now have an excellent opportunity to learn, improve and build resilient, future ready operational setup that will not only recover from the pandemics but, also survive and sustain next challenges that disruptions like COVID might throw at them.
Hi-tech companies are set up for remote work more than other industries and so will suffer less of a disturbance. But, for warehousing and fulfillment operations work from home option does not apply. For that matter, any operational setup (especially manual warehousing and fulfillment) has elements where people have to interact face to face, be closer in confined space and may even need to operate together in a group. Receiving, picking, packaging, and shipping are some of the examples. Yet, businesses have tried to re-invent their operations following the prescribed cautious and safe distancing practices while resuming operations. But it could still easily expose their staff to infection risks, not to mention the hampered productivity levels and steep additions to operations costs.
PATH TO RECOVERY
Though it may seem like an uncertain future and no light at the end of tunnel, some economies and their subsequent businesses are meticulously working on a path to recovery. The focus now is shifting towards coping up and living with the “new normal”. Companies in China, Germany, few parts of USA are already resuming day to day life gradually with extreme caution. The social distancing and isolation has taught us an important lesson, that no matter how plentiful the labor resource pool may be; situations like COVID-19 could put the operations in jeopardy, especially the ones that heavily rely on labor. Warehousing and fulfillment operations in India, even today, heavily rely on labor and are largely driven by manual processes. Since these operations are considered essential services, there is very little that businesses can do as their resource are unavailable and under isolation. This is a wake-up call.
The silver lining of hope for recovery through these challenges lies in adopting digitalization and automation solutions. An ideal combination in this scenario would be to couple the scanty labor resources with automation. This will be a symbiotic partnership that will bring reliability, efficiency, and safety in operations. Even in the current situation, there are digitalization and automation solutions that can be easily implemented in no time.
Most of the operations have already implemented sanitizing protocols,personal protective equipment, outdoor meetings, staggered shifts & lunches, and social distancing rules, below are some additional quick transformations that can be adopted to recover operations using a combination of labor and automation:
Reducing the need for face to face social interaction: While it is true that warehousing operations need plenty of interactions, there are many opportunities to cut down the amount of face to face interactions drastically. We are very used to seeing resources operating in groups through the processes. These group interactions are driven by the need to discuss, seek answers or instructions when processes are manual. The need exists as the manual processes fail to create clarity, definite instructions and smooth procedures. A simple error in the description or qty of goods on a receipt can result into discrepancies which will drive the need for someone on the floor to walk to the supervisor and interact.
Now, imagine a Warehouse Management System (WMS/WM) that can take over all the process management. Let us rethink the receiving operations with a WMS. There could be few in-line label scanners, or handheld RF scanners with display that can send and receive information direct to a control station (supervisor). This control station broadcasts and receives all the information to relevant points in processes. Also, it has the capability to respond back with resolutions for any issues arising.
Not only you are digitalization your processes, but essentially eradicating the possible human errors out of processes which is eliminating any need for any face to face interaction. Additionally, since the WM is coordinating the show, be assured of efficient error free operations. The software is controlling all the flow of information, instructions, feedback throughout the processes. With digitization, the inherent need to interact face to face has been removed.
Safe operations with distancing: Even in the warehousing operations, it is possible to practice safe distancing. By adopting some base level automation technologies that are easy to deploy, and when used in addition to above WMS, adherence to safe distancing protocol can be easily achieved. Assembly lines in automotive, mechanized production in pharmaceutical manufacturing, beverage bottling, dairy lines have already adopted and implemented these automation solutions. We have seen that there is little to no human interaction needed for these setups.
By implementing simple automation solutions like conveyors, Automated Storage and Retrieval for inventory, wrapping, labelling, etc., the need for people to work in groups or crowd together can be reduced. Fewer people executing the processes means better chances of distancing. Also means a well spread out workforce that is interacting only if necessary, that too mostly digitally. Supervision, error recovery, control, verification, accountability is now moved to the digital platform that controls this automation. And in turn the automation executes the processes. By merely touching few buttons on the HMI (Human Machine Interface) or with a click of mouse, these systems can be kept operational and processes moving.
Reducing the number of touches: The fundamentals of improving warehouse efficiency rely heavily on the concept of reducing the number of touches. Automation solutions are based on this principal. And with COVID, this will be the most relevant topic in warehousing operations.
With solutions like Automated Storage and Retrieval, goods-to-person; the number of touches in the processes are vastly reduced. No more people shuttling goods around multiple times. Interaction of humans with goods only occurs when needed and with high precision & control. This is also tying back to the point of safe operations with distancing. Take such an example of goods picking process. By deploying goods to person technology and making the goods automatically travel to person, pickers can be placed at a safe distance in picking stations, zones or at pick ports. Add some shields and sanitization at these spots and now the operations can quickly ramp up execution adhering to the new distancing norms. This setup is high flexible and configurable. So as the volumes increase or decrease in future, the setup can be scaled or altered. Additionally, with a WMS/ WM controlling all this, a very high operational efficiency is achievable at elevated throughput rates.
Imagine doing this in a manual picking setup abiding the social distancing guidelines. Just setting up such safe distance pick stations would mean additional resources to shuttle the goods back and forth, multiple touch points not to mention the impact on efficiency and operations cost.
BUILDING FUTURE READY RESILIENT AND SUSTAINABLE FULFILLMENT OPERATIONS
Practicing safe distancing, avoiding crowding and working in isolation may very well become the new normal. Businesses will have to innovate and implement advance technological solutions with an eye out to the future. Digitalization & automation of processes is the building block of future ready resilient and sustainable operations.
The shift to working from home with the help of digital collaboration tools is likely to drive demand for high tech solution categories. Similarly, an equivalent high-tech solution is the need of the future to keep the economy pumping and operations running. By automating processes like receiving, conveyance, storage retrieval, packing and loading; operations can establish compliance with social distancing norms without compromising on productivity.
One may debate that capital conservation is prime and upfront capital cost of implementing any such solutions is high but, it may very well turn out that this is the only economical alternative to building a future ready, resilient and reliable operations capability that will sustain challenges like COVID-19. Businesses that figure out a way to cope up, adjust and adopt early to the new normal will emerge as winners. We may never be able to go back to running operations like pre-COVID era but, the future, by compelling business to transform, will unlock new potential and overall advancement of the industry.
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