For 2022, Resiliency is the Name of Game
Recent research from the National Association of Convenience Stores (NACS) suggests that procurement will continue to be a challenge into 2022, and suppliers are less than optimistic about the supply chain. In the face of so many factors a distribution center cannot control, the strongest tactic is to build a resilient operation.
In defining resilience, Convenience Distribution magazine quotes resilience expert and author Salvatore Maddi: “Resilience or hardiness is the ability to adapt to new circumstances when life presents the unpredictable.”
Unpredictability, higher costs and supply chain heartache are likely here for the long term, and the FTC has pledged to look into causes and solutions. Consider a few recent news items:
- Nearly 80% of retailers said they experienced delays in store equipment and hardware deliveries over the past year, according to Convenience Distribution’s Annual Report.
- The total on-shelf-availability rate was 94.6% in September, a decrease from 95.2% in August, according to Bloomberg News.
- The Logistics Managers’ Index that tracks overall logistics prices (including transportation, warehousing and inventory prices) reached a record in November, up 3.4% from October and a 14% increase year-over-year, according to the Wall Street Journal.
Strategies to become a more resilient distribution center
To withstand the turbulence, managers must increase their agility and flexibility in the face of the unexpected. We hear much discussion about external strategies such as near-shoring and diversifying supplier bases. Inspired by Convenience Distribution’s Annual Report, we took a different perspective and looked inward. Here we offer four key measures based on your people and your operations.
- Strengthen your team through role specialization.
While the pandemic resulted in warehouse upper management filling gaps on the floor picking or loading trucks, it’s not the most efficient way to increase sales and reduce costs. Put your most specialized professionals to work on high-value tasks with the highest return, such as developing new business. Assign lower value activities such as managing quotes to appropriately-trained staff who can accomplish those tasks efficiently.
- Conduct scenario planning.
You can’t predict every possible hurdle you’ll face, but brainstorming through “what if” scenarios can help you form a plan to recognize difficult situations quickly and be ready to respond with solid processes and capabilities. Robust scenario planning is not just for disasters such as a tornado that wipes out your operation. It should include possibilities such as product recalls, manufacturer shutdowns, and yes, freighters stuck in the Suez Canal. Work in tandem with your current suppliers to strengthen key relationships, form a response plan and re-evaluate inventory positions.
- Invest in data for greater efficiency.
Take advantage of data that can help predict needs and enable better business decisions, especially staffing decisions. For instance, ProCat’s PickRight barcode scanning technology includes robust data and reporting tools that provide insight into operations and enhance management capabilities. The analytics enable management to make more informed decisions, decide on ideal staffing levels, create optimal picking zones and delivery routes, reward productivity, and more. Data can also give employees real-time productivity feedback that helps maximize performance over time.
- Be proactive about change.
Keeping with the status quo and waiting out the pandemic’s disruptions is not an effective option. Being open to and proactive about change can help reinforce your position in the market. Seek opportunities to partner with others and adopt technology that can improve efficiency. ProCat offers modular software solutions that support all warehousing functions including Order Picking, Receiving, Loading, Pallet Building, Cycle Counting, Put-away, Replenishment and more. For warehouses that have not yet embraced hands-free barcode scanning , PickRight can increase order accuracy to 99.9%, reduce customer claims by 90%, increase picker productivity 20-40%, and improve morale to help retain workers.
Play the long game
Building a resilient business is a marathon, not a sprint. Take the steps that are necessary now to set your business up for long-term success, and don’t sacrifice long-term gain for a short-term win that may break down trust with suppliers. Working together and opening communication lines will help build trust and better relationships between distributors and customers, which will lead to increased resiliency. And that is a formula for long-term success.
Interested in learning more about how ProCat solutions can help your company?
Whether you have a question about solution features, product demonstrations, pricing structures or anything else, our team is ready to answer all your questions.
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