Technology is at the forefront of everything these days and warehouses are no different. In fact, there are many converging forces which are granting distributors the opportunity to perform better than ever.
Customer expectation about availability and delivery is the first force. Today, distributors are dealing with the “Amazon Effect.” “Everyone wants it yesterday, and if they don’t, it can really have a negative impact on the business,” said Mike Clarke, vice president WMS Sales, Infor, at a recent webinar hosted by the Distribution Strategy Group.
Since the onset of major labor and supply shortages, how can distributors improve the supply chain to meet the demands of the customers? This, according to Clarke, will be where companies need to look toward technology as a focal point to relieve some of this pressure.
Today’s labor shortages are not just about getting labor but retaining it. “The dynamic of this labor pool is a newer, younger, smarter workforce that embraces technology better than they ever have. We look at improving that experience for the employees, which we see leads to a greater retention and it allows you to pick and choose from a greater talent pool as well. Employee satisfaction leads to customer satisfaction,” Clarke commented.
In addition, satisfaction will lead to customer demand. “If you can’t meet the customers’ needs, they call the competitor. If the competitor can deliver and fill the request, they gain a new customer and you lose a customer,” said Brian Gonzalez, co-founder and chief technology officer of Curri.
Therefore, most distributors believe it is crucial to say “yes” to their customers and they must manage their warehouses and inventory efficiently and effectively. “Our best customers say that delivery – getting material to the customers when they need it – is a superpower. Gone are the days of ‘I’ll have it to you in three days.’ It’s basically the end of the day tomorrow or bust. The expectations are changing. If you can’t make the delivery, people start to shop around,” Gonzalez added.
Distributors, as a result, need to meet these demands of their customers to perform at their highest levels. “The ease of doing business is what customers are looking for. They have lots of choices out there these days, and if your business is taking longer to deliver than it should or if you don’t have in-stock goods they’re looking for, they have options to go other places. Your customer becomes someone else’s very quickly,” Jody Phillips, senior customer engagement director, DC Perform said.
Tougher competition is the next force affecting distributors. Since many manufacturers are selling directly, distributors need to respond to this competition by raising their performances. “Speed, accuracy and flexibility are what the customers are looking for,” Phillips said. “How you can become more efficient is really driven by your execution systems – your WMS, TMS, your labor management, and as we push farther into automation and robotics, how can you become more efficient inside your four walls to satisfy the heightened customer expectations?”
The reality is that the customers can see right through the business if it is not efficient. “They see if you are not running your business efficiently because ultimately it has an effect on their experience. You need to be efficient in your own organization. Oftentimes, the customer just wants to call somebody to work in real time. Technology adoption is increasing, but you can’t throw the baby out with the bathwater quite yet,” Gonzalez explained.
Another force causing distributors to adapt is labor availability. “We monitor the job postings for all of our customers because that’s beneficial to us. We see these posts open for months and months, so we know people are having a hard time filling some of the blue-collar roles at their organizations,” Gonzalez stated.
However, each company needs to look at labor availability from the perspective that everybody has labor shortages. “From a technology or warehouse perspective, the focus is how do we help companies offset this. If we can alleviate the menial tasks by automation in the warehouse, which enables bots and machines to do that common work, then, at the same time, the simplest of the new technologies onboards quickly. It used to be two months. Now it’s 10 days,” Clarke elaborated.
“On the flipside, that labor issue is not just the attainment of labor, but it’s also keeping them. The experience of technology in the day to day, minute to minute tasks really provides a better employee experience. We are seeing the problem not being solved, but there is a way around it through automation,” Clarke noted.
Additionally, employee engagement is mammoth. “It affects retention. It affects how happy people are. Whether they are driving a forklift or pushing a cart around being able to engage them in looking at automation and looking at robotics early and often brings them into the process and lets them see there is a better path ahead, helping not only the C-suite build those visions of where the company needs to be, but you have to have everyone in the organization pulling the rope in the same direction. Being able to show there are options for adding automation, shortening the work time for an employee, can improve their personal quality of life,” Phillips advised.
When people visit and see the clean, advanced sites, the distributor will be able to hire people at a competitive rate and keep them there. This affects employee engagement and retention. “For these low-level roles, the high performers always get promoted to a different role. The low performers get weeded out; therefore, the organizations are constantly left with gaps. This becomes a constant challenge,” Gonzalez indicated.
Another item that keeps surfacing with labor availability is change management. “When we look at technology, when we look at innovation, when we look at robotics, we need to look at change management from the top down and that everybody has the end goal in mind. One of the biggest gaps we see is people are making the decision on technology without the ‘as is’ and ‘to be’ states, and where they need to be in five years,” Clarke acknowledged.
“One of our key pillars is looking at the plan and making sure that all stakeholders are brought in. It can’t just be operations. It has to be IT. It has to be the business side. It has to be procurement and demand planning. If everyone’s not involved, someone’s going to get left behind and that’s where you start losing the leverage that systems and automation and robotics can give you,” Phillips commented.
Implementations often go wrong as companies pay for software and then several months later feel that they have been sold worthless technology as it will not do what the company thinks it should do. “It goes back to the RFI process. Before you buy the software, get very acquainted with what you’re buying, know its limitations and do reference checks,” Gonzalez added.
All technology adaptions require this. “We need to take a deep dive into the business, understand all business requirements, not just operational, but IT and the business side, procurement, all of the requirements that will be put on this software or this system or technology. Take those and make sure the overall decision making is really pushing toward a goal by understanding all the business requirements and needs, and then leveraging those and providing options,” Phillips suggested.
Lastly, distributors will need to know what to look for today. “The one thing that I think is key to potentially leveraging a robotics provider is the system that they use because it is that system that is really going to bring out all of the optimization in working with your ERP, working with your WMS and being able to leverage those bots. It is their system which is, I believe, the most important part. The differentiator is their control systems,” Phillips asserted.
Furthermore, there is technology for everything. “My advice would be to look for vendors who provide middleware integration and APIs for integration from the ERP to the WMS to the MHE and that allows the multiple systems to work together effectively and efficiently,” Clarke added.
From a fulfillment and logistics perspective, Gonzalez replied, “We’re going through a global recession, and things are changing with our world and our economy. So what we’re seeing from our customers is that they’re getting back into a more wartime mentality. How do you provide better customer service to your customers? How do you increase sales? How do you increase efficiency? Do you bring in other services to offset your company value when you need it? We see people getting back to the basics.”
Therefore, distributors need to get educated and access what they need for the future. So how can this be done? “You need to leverage resources. Some of those are the vendors themselves. The audience on the phone moves the product. Meaning, at the basic level, stuff is coming in, stuff is getting put away, stuff is getting taken off and stuff is getting moved out. So how do I do this most effectively at the least level of cost? Leverage the analysts and your customer base. Speak to the vendors themselves,” Phillips said.
“The more time you spend with people, the more trust is gained and decisions become easier to make. When it comes down to looking to accomplish technologies, and what people are, each company is unique,” Clarke observed.
Some believe the best advice is to look into one’s own employee base. “You probably have a guy or gal who worked at your competitor and your competitor’s competitor,” Gonzalez suggested.
Therefore, talk to your peers. They will give the positive and negative news. “Engage with the decision makers and with all impacted parties, who give input,” Phillips concluded.