upstream filling activities are moving downstream, Scriven says. He provides an example: a supplier ships T-shirts to large distribution center, where they’re unloaded and put into totes. From there, the T-shirts, still in the totes, move to a last-mile fulfillment center. “Loading the totes is done upstream, where rents are lower,” he says. “When shipping items downstream, they’re already pre-loaded.” DEMOCRATIZATION OF TECHNOLOGY Not only is technology playing an increasingly vital role in many distribution centers, but the “democratization of technology,” is allowing even smaller operators to implement it, says Bill Denbigh, vice president of product marketing for Tecsys. For instance, while voice picking systems have been around for years, they previously required separate terminals and systems, that together often cost well into six figures. Now, most industrial mobile devices are based on the Android operating system. Warehouse management system (WMS) vendors are able to build voice prompts into their solutions simply by utilizing standard Android API calls. Modern WMS solutions increasingly offer voice as a way to drive user efficiency, rapid system adoption, and user compliance, or following what the system says to do, he adds. Down the road, blockchain or distributed ledger technology likely will gain greater adoption. “It can facilitate better demand planning because of the openness and transparency along the supply chain, and the removal of latency periods between partners,” Montgomery says. The lack of government standards has been a big factor in holding back implementation so far, she adds. Openness, transparency, and immediacy help build resilient distribution operations that can anticipate disruptions and respond even before they occur. “Like hockey great Wayne Gretzky, they can skate to where the puck will be,” Moore says. n
so pickers can easily see where the items they need are. In contrast, employees trying to navigate a warehouse using radio- frequency guns usually need to understand an aisle numbering scheme like 10-03-04-08, or Aisle 10, Bay 3, Level 4, Slot 8—hardly intuitive or easy to learn. “A co-bot can help guide the associate to the location quicker,” Kumar says. This capability helps explain the growth forecast for the market for the AGV and AMR market. Research firm LogistisIQ predicts it will top $18 billion by 2027, with a growth rate of about 24% for AGVs and 43% for AMRs. The pandemic and related supply chain delays highlighted the risks of slashing or, in some cases, eliminating safety stocks. At the same time, amassing quantities of all products can be expensive and unwieldy. For key movers or critical products like medical devices, keeping safety stock nearby often is critical. One cost-effective way to do this is through brokered warehouses, Liebman says. Computer platforms match companies with extra warehouse space across the country so they can store, for instance, 300 pallets for three months. Visibility and connectivity enable the application of data analytics, another factor in building resilience. Technologies like machine learning and artificial intelligence can leverage data to predict demand weeks out, based on a range of factors. Instead of looking only at sales history, it’s now possible to consider social media, weather, and real-time sales data and then marry all the information together, Montgomery says. A system can also assess how potential disruptions will impact demand and in what SKU categories, so retailers and distribution centers can adjust operations. Digital twins can facilitate what-if and scenario planning, Montgomery says. This entails using data to create a digital version of the supply chain today and asking it to assess various scenarios:
Wireless headsets connected to a warehouse management system allow workers to perform tasks hands-free.
What happens if shipping ports shut down on the West Coast? What if a hurricane hits production facilities in Los Angeles? Based on the analysis, the distribution center can optimize safety stock levels and the locations used to store different SKUs. SELF-DISTRIBUTION, VERTICAL INTEGRATION, MFCs Some industries, like healthcare, have seen significant adoption of the self-distribution model as a way to gain “centralized, comprehensive control of their supply chains, from source to patient,” Brereton says. As TechTarget explains, in a self- distribution model, companies purchase goods directly from their manufacturers, store products in their own warehouses and transport them through their own networks, cutting out the middleman. “By altering their distribution management processes and going directly to manufacturers, health systems are able to buy strategically while safeguarding against bottlenecks at third-party distributors,” Brereton adds. Because last-mile facilities like micro- fulfillment centers are increasingly replenished with individual items in addition to pallets, traditional
48 Inbound Logistics • May 2022
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