Logistics in 2020: Warehousing
At the heart of the logistics industry is warehousing. Often dismissed as the low-tech, low-innovation ‘workhorse’ of the supply chain, warehousing is in fact the area most pivotal in enabling the logistics industry to keep up with the fast pace of change.
Optimizing the flow of goods throughout the whole supply chain remains a critical concern, with LSPs continuing to favor maintaining storage and value-added logistics (VAL) facilities that are located close to the main regional sea ports and rail terminals. Automated high bay racking systems to utilize space and improve efficiency will become more and more common.
Goods will by now be routinely brought closer to their final destination; instead of one enormous regional distribution centre, there are multiple local DCs, served by more frequent deliveries. Supply chain network planning will become increasingly important, as will days coverage planning of inventory to ensure the right stock is held at each location to maximize availability and optimize replenishment cycles while minimizing cash tied up.
Process adjustments are increasingly influenced by eCommerce and the need for flexibility to fulfil customer demand for choice in terms of product and delivery timescale and location. A relatively simple standard process for a warehouse used to be Pallets or Containers in, Parcels out, Returns in.
With value-added logistics increasingly common, goods may move from one area of the
warehouse to the other, via labelling/packaging, and may never touch the retailer that sold
them where orders are fulfilled via direct despatch.
In the early days of multi-channel, e-commerce inventory was sometimes kept separate from
normal distribution inventory. To leverage efficiency it will be increasingly important when
optimizing logistics that all unallocated inventory is pooled and visible for order fulfilment.
Cross-docking; increasing use of cross-docking to reduce inventory holding costs at different
locations and to reduce trucks running with partial loads.