The need to better understand the effect of peak season on supply chain processes and technology remains paramount for freight management parties and resellers. As the world prepares for the upcoming peak season, uncertainty remains the one constant. Furthermore, supply chain and logistics providers around the globe are gearing up for an unprecedented strain on logistics resources and the uncertainty that accompanies all election-year peak season strategies. As a result, supply chain professionals need to understand the top trends driving interest in new peak technologies and how they will define success or failure for the remainder of the year and into 2021.
The supply chain coronavirus pandemic revealed major inconsistencies and problems with sourcing strategies that follow a single supplier or distribution model. Unfortunately, economic shutdowns surrounding the pandemic resulted in the complete disruption to whole supply chains, and as a result, companies are working to create a new strategy that offers limitless flexibility. For example, DHL has retuned its strategy, “providing an environment of ‘All Business. No Boundaries’ for our customers. Our people are at the forefront of that commitment. With 7,000 additional associates, we are making investments ahead of the curve in anticipation of a strong peak, and also providing welcome support to our existing workforce, which has worked so tirelessly throughout 2020.” In other words, the ability to flex to meet new changes within the supply chain network will be essential to adopting new systems and capabilities to handle changing supply chain processes.
While the pandemic created a strain on available logistics resources and did result in some out-of-stock SKUs, more retailers are experiencing challenges in handling warehouse inventory. Warehousing capacity remains relatively tight. This is especially true as retailers and suppliers look to gear up production in anticipation of the coming peak season. Fortunately, new peak technologies, including the use of robots and autonomous functions to guide order routing, will have a greater role to serve this year. Moreover, the ability to leverage all existing supply chain space, including brick-and-mortar retail locations, will have an impact in the adoption of new peak technologies too.
Customers continue to ramp up their demands for e-commerce purchases, as well as making purchases for curbside pickup and delivery. In fact, according to the Wall Street Journal, “consumers spent a record $73.2 billion online in June, up 76% from June 2019, according to Adobe Analytics, which tracks activity on thousands of websites. Online shopping is now above typical holiday levels, Adobe said.
The surge of online orders is boosting warehouse demand, especially for locations near major population centers, as companies adjust supply chains in which goods flowed mostly to stores.
E-commerce was the largest driver of second-quarter industrial leasing activity, accounting for 31 million square feet, up from 24.9 million square feet the previous quarter, according to real-estate firm Jones Lang LaSalle Inc. Logistics and distribution users, the second-largest category in the second quarter, accounted for 15.3 million square feet, while leasing for traditional retail use came in fifth, at 11 million square feet.”
This massive jump indicates a need for seamless data sharing and transmission across all supply chain centers and facilities to ensure inventory is not overlooked and orders are fulfilled on time and without error.
As the world prepares for the upcoming flu season, the importance of maintaining an adequate supply of traditional essential goods is going to become a new beast of burden. Maintaining the traditional capacity and the ability to move essential goods will set the standard for which retailers that offer an assortment of goods will be able to survive going forward. Unfortunately, the transportation capacity crunch remains a very real theat. However, peak technologies that allow for the combination of such necessities and new product orders will be key to success, giving customers and business-to-business partners more sourcing and fulfillment options.
For example, Walmart Grocery Pick-Up and Delivery allows guests to shop for common household items and products that are not necessarily considered items from the grocery supply chain. However, this ability to shop for goods that go beyond the traditional grocer product list allows for more flexibility and helps to promote business success during uncertainty. Of course, finding a way to store and move such items will place added strain on warehousing capabilities, which may result in the need to take advantage of additional warehousing functions, such as pop-up warehouses. At the same time, drag-and-drop approaches to cargo trailers and taking advantage of brick-and-mortar retail spaces will provide a way of mitigating the strain.
In recent years, the ideas of sustainability and end-to-end transparency have become commonplace in peak season planning. While these capabilities sound like the same argument, they differ and offer additional advantages that go well beyond peak season logistics.
For instance, peak technologies, including automated systems, can be applied to help route orders for faster shipping when the holiday season ends. More transparency helps to set realistic expectations for customers and reduces the risk of increased cargo loss and damage claims. It’s that simple.
Out of all peak technologies, the biggest influencers are those that offer digital management, remote capabilities, and faster service. In fact, these are the core characteristics of a transportation management system (TMS). And it’s time to start thinking about how implementing a TMS now can be the first step toward putting the right peak technologies to work in your enterprise.
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