Last year, online shoppers spent more time purchasing items through online retailers than any other channel, and the 2016 holiday shopping season broke most online and mobile records. According to Champaign Williams of BisNow, the spike in online shopping leads to a 10.7% increase in the leasing of industrial space, including warehousing space. On average, e-commerce sales are growing five-times faster than brick-and-mortar retail, but today’s fulfillment distribution centers face significant growing pains. Modern warehousing technology must correspond with the explosion of technology in e-commerce and throughout supply chains for these key reasons.
Modern Warehousing Must Meet Demand From the Record-Breaking Growth of E-Commerce
2016 was certainly an incredible e-commerce year, but preliminary reports from the 2017 holiday shopping season, including Black Friday, Cyber Monday, and Cyber Week indicate that it may surpass many industry analysts’ expectations. Most people expected e-commerce sales to increase, but even the pace of growth is increasing, which is both exciting and concerning news for many outdated fulfillment models.
Modern warehousing must use the information collected through online shopping channels and hasten product cycle times. Meanwhile, brick-and-mortar stores are merging with online sales, including using a store-as-a-distribution-center to fulfill more products, faster and at lower costs, explains Keith Phillips of Supply and Demand Chain Executive. Paper-based warehousing systems are simply too inefficient to keep pace with the demands of e-commerce and an omnichannel supply chain.
A Rapidly Changing Workforce Will Strain Warehouses
The warehousing workforce is also in a state of change. As explained by Eric Lamphier of Manhattan Associates, North American warehouses face an overall personnel shortage, and the problem is only expected to get worse as more workers reach retirement age. As the system approaches a breaking point, robotics and automated systems will become the go-to solution for modern warehousing, capable of handling the workload for both inbound and outbound processes, says Steve Banker of Forbes.
Outdated WMS Lacks Coordination With Real Warehouse Activities
Legacy Enterprise Resource Planning (ERP) warehousing systems also suffer from the progression of e-commerce. These systems cannot respond to the real-time fluctuations in demand created by e-commerce. While modern warehousing has moved to meet the surging demand, the gap is growing between what these systems can do and what is required to meet omnichannel consumer expectations.
Bring Your Fulfillment and Distribution Centers into the World of Modern Warehousing With an Expert in Supply Chain Technology
E-Commerce shows no signs of slowing, and consumers are always looking for the next best deal and steal in retail. The 2017 Cyber Monday specials set a new, one-day shopping record of $6.59 billion, reports Ben Fox Rubin of CNET Magazine. This astounding influx of orders will push modern warehousing to its limits, and modernizing fulfillment centers by warehouse systems with e-commerce and supply chain technology is essential to meeting the growing demand. Don’t fall behind your competition by working with outdated and uncoordinated systems. Contact Veridian to begin the path to a modern warehousing and order fulfillment strategy.