The pressures and sky-high expectations placed on the average distribution center are only expected to intensify in the coming years. A global economy means more persistent competition than ever before.
Just about all the ways warehousing has evolved over the last 10 or 20 years is about doing more work with less money and fewer resources. One of the key pieces in that seemingly impossible puzzle is data: more of it, easier access to it and more actionable takeaways from it.
And yet, the traditional warehouse remains alive and well in America, even if modern economic trends mean they rely more on temporary labor now than they have in the past. The globalization mentioned earlier also means larger volumes of freight arriving on American shores from overseas — and those products need to be moved and stored.
That means fairly steady employment in this sector, no matter where your average consumer product is manufactured. Moreover, warehouses are frequently used to store any number of materials — like waste products or raw manufacturing materials — that aren’t directly destined for consumers’ hands.
So how else has warehousing been changing? Some of the adjustments have been too slow and gradual to be obvious, but others represent real sea changes for how things are done in this sector.
Here’s a quick crash course on some of the major moving parts in the industry and how they’re shifting with the times.
The cost of doing business out of a warehouse has dropped to the point where many businesses, both large and small, are shifting a number of their operations to a warehouse setting, including packaging, pricing, labeling, and — as we’ll discuss more in a moment — manufacturing.
Networks are operating more and more efficiently these days as distributors and retailers take a hard look at how slow-moving products or parts are dispatched, and whether there’s any waste or redundancy that can be trimmed from “traditional” network setups. Again, data is king here.
Warehouses are still quite likely to be located near or just outside the nation’s large population centers. In other words, not a lot has changed here over the years. This gives easy access to quality labor and lowers the cost of transporting goods.
Many warehouse-based businesses are seeing labor shortages if they do business in an area with a labor pool more saturated than the current average. Job titles are also changing, with warehouses increasingly in need of technologically proficient employees to design, implement, or supervise new and more efficient machines and computers.
The ever-wider availability of data and information technology has lessened some of the performance pressures on warehouse-based companies by helping them do business more effectively. This might include improving cycle time, keeping a leaner inventory, and reducing costs generally.
Between 2001 and 2014, the U.S. shed more than 3.2 million jobs, most of which were in the manufacturing sector. The migration of warehouses and manufacturing plants from U.S. soil overseas continued apace in 2016, continuing a long pattern since NAFTA was signed 23 years ago with broad bipartisan support in the House and Senate.
Supply chain metrics
As warehouses become even more entwined with supply chains and the business climate grows more competitive, data becomes more important than ever for observing trends and ultimately improving performance. Third-party warehousing operations will need to juggle these assessments and metrics for multiple clients with potentially very different definitions of success.
Then and now
A more global and far more competitive economy has kept the warehousing industry on its toes for many years now, and it’s proven itself surprisingly resilient. Employment has been pretty steady in the last couple of years, even as new technologies have threatened fewer job opportunities.
Nevertheless, new developments in machine learning, robotics and industrial design will continue to put pressures on bottom-line-focused corporations to phase out human workers and automate wherever they can. Since an almost dizzying assortment of business types are already automating their operations, we’re asking questions like: “Should robots pay taxes?” far sooner than expected.
The game-changing technology we know as 3D printing is also going to have a ripple effect in the industry. Because businesses are performing so many of their various services out of their warehouses, it’s quite likely warehouses will proliferate 3D printing technology as it comes of age to even further reduce complexity in their operations, and produce only the physical inventory they need at a given time. That means potentially smaller warehouses — and yet another part of the operation where the human touch is on borrowed time.
Don’t be discouraged, though — the challenges described here are the same ones a great many industries are facing right now. Global, economic, and technological trends might change all the time, but warehousing is one of the most stable industries out there, and should continue to thrive as it always has.
This article was written by Megan Ray Nichols. If you enjoyed this article, please visit her page Schooled by Science.