Over the last two years we have witnessed how disruptions, both ordinary and bizarre, can ripple through the supply chain with unforeseen consequences. From a global pandemic, to supply shortages, transportation protests, and now a conflict in Eastern Europe, the forces impacting the supply chain are often out of our control. When considering the complex intersections of the entire supply chain, problem solving appears in surmountable. But solutions do exist, and we can regain order from chaos if we tackle problems in smaller, incremental ways. This is exactly what is happening in industrial distribution.
A unique link in the supply chain, industrial distributors serve as an intermediary between upstream and downstream flows, connecting manufacturers and suppliers with end users. And while most people hear distribution and can only think of Amazon or FedEx, the diverse ecosystem of industrial distributors and their role in global supply chain is astoundingly large for being so unimagined. Not to mention the added value that they can provide through their material handling activities as well their unique product knowledge that bridges the gaps between manufacturers and consumers. To remain relevant, successful, and adaptable to challenges, more and more industrial distributors are embracing automation.
So, what does automation mean? Many of us immediately imagine a Jetsons-like scenario of robots, machines, and AI. But automation is much broader and often a lot simpler. For example, utilizing a shipping software that can check carrier rates is a form of digital automation. Likewise, the use of a conveyor system, even one that is non-mechanical, is an example of physical automation. Automation in distribution pushes activities and processes to occur instinctively, independently, with minimal intervention. Any way distributors can automate operations, big or small, can help overcome challenges related to labor, space, and time.
For example, pick-bots are becoming increasingly popular to assist warehouse operations, namely by reducing travel time by employees. Rather than pay an employee to constantly walk through the warehouse picking orders, a pick-bot can travel between pickers and the pack/ship area. This keeps the human brain engaged in complex, productivity tasks while a bot does all the mindless warehouse transit. This kind of automation strategy can result in more order fulfillment without the need for added labor; or, alternatively, it can maintain fulfillment in times of labor shortages, a reality for many distributors. It can also increase warehouse safety by reducing interaction between people and equipment.
As for the frontier of warehouse space, the future is moving toward automated storage and retrieval systems (ASRS). Compared to traditional racking that is limited and inflexible, an ASRS mobilizes inventory, retrieving and presenting inventory to pickers. They can also optimize storage space, increasing vertical capacities without needing additional, bulky equipment such as order pickers and associated aisle space. As technology advances so does the capability and capacity of ASRS, with some systems being able to transport well over 1,000lbs. Again, there are inherent safety advantages of such automation including improved ergonomics and reduced interaction between people and vehicles.
Robots aside, the best way to begin automating is to invest in a Warehouse Management System (WMS). Although a WMS is nothing new to the industry, it is shocking the number of distributors that have yet to convert their operations to a location-based, barcoded system. Although there are many, some of the best benefits of a WMS include:
- Better inventory accuracy and cycle counting capabilities,
- Improved inventory management between distribution centers and branches/retail locations,
- Efficiency gains in picking and put-away activities,
- Increased customer satisfaction resulting from correct and timely orders, and
- Expanded warehouse metrics and data collection.
A WMS is an essential step in overall automation, as many other improvements depend on the fundamentals that a WMS provides, namely location and quantity data.
Industrial distributors hold a niche position in the global supply chain. Their intermediary position can significantly impact large sectors of the economy, sectors that are tied to economic development, provide necessary infrastructure, and employ thousands. With acute focus and some imagination, industrial distributors have the capacity to improve operational precision that in turn expands opportunities throughout the entire supply chain.
