Winners and losers

Some businesses that promote “social distancing” and help people stock up for eating, drinking, working, and staying entertained at home are actually thriving during the Coronavirus pandemic. There will be clear winners and losers over the long term and the supply chain of the future will need to evolve as a result.

This outbreak has been an unprecedented disrupter and has very quickly shifted demand into eCommerce and home delivery channels, challenging the capacity and capabilities of almost every distribution center operator. Many companies are touting “contact-less” delivery and those with delivery capabilities are gaining market share over their competitors who do not. Ship from store and store pickup options have also surged in importance.

In the short term, operators have scrambled to manage the channel shift, meet order fulfillment demands, and maintain revenue flow while implementing social distancing and other measures to protect workers. As a result of this outbreak and to mitigate the impact of possible future outbreaks, we will see new norms for how people interact in the workplace. Long term, how do we achieve expected DC productivity and efficiency while adopting new workplace safety standards?

What is the broader impact on operation sizing and business process design if distribution associates can be no closer than 6 feet to one another? What does it mean to maintain social distance in a distribution environment? This will certainly cause a shift that will force operations to rethink material handling design and fulfillment processes.

“Pandemic proofing” your DC

Business function and ergonomics will continue to be the primary design focus, but now, associate proximity and safety must also be considered bringing with it a new infrastructure, processes, and regulations. This will impact everything from space allocation to the sizing of functional areas and the need to reexamine common area layouts and requirements for shared areas.

This may require some processes to be ‘one way’ down an aisle (similar to what Walmart is doing in their stores); some processes may require personnel to be replaced in a tag team fashion to allow an employee to break/lunch to match the ‘new maximum’ a break area can accommodate; office areas and the ‘open office’ may be best to be ‘walled off’; how to sanitize equipment which is shared (lifts, handguns, control panels) … all this time we are trying to get more output out of less space and now we are turning this on its head.

Designs of the future should have, at a minimum, contingency plans which would allow the operations to be quickly configured for a future incident, and may become a standard design element to “flex” operations, much like peak planning contingency has become part of the eCom business cycle.

“This will affect everything from space allocation to the sizing of functional areas with the need to re-examine common area layouts and requirements for shared areas such as security entrances and break rooms. Will employee entrances need to have thermal scans linked to the turnstiles? “

Companies that utilize goods to person technologies or have picking processes that utilize “pick zone” concepts will be in a better position to adapt, so it becomes a question of expansion/contraction nimbleness and ability to scale.

Even in the environments where goods to person and high-speed automation are being utilized, there will typically be functional areas where piece work is being done by a large number of associates in a densely packed layout. The mega-fulfillment centers may also need to assess their ability to repurpose high-speed automation in order to spread associates to an acceptable distance.

We may well see a catalyst for an increase in the adoption of robotic picking as a result, with business case justification, will now needing to include a more rigorous consideration of contingency for business stoppage measured in terms of weeks or months, instead of hours.

It is not uncommon for a larger, high volume DC to employ 1000’s of people during peak conditions, so the egress/security and common area issues are amplified. Shift scheduling and space/asset utilization must be reevaluated – in a situation where pack stations are currently too close together to accommodate the “standard” social distance, they would either need to be moved, creating the need for more space, partitioned or staffed differently, half as many stations working twice as many hours.

A critical eye on recovery from the pandemic

Now is the time to assess your operations reaction and performance to this recent crisis and to evaluate business contingency/resiliency plans. The time to take a critical look at things you would like to change and begin to make any necessary adjustments before the flood gates open again and contingency planning becomes a back-burner issue.

This will change the game in the future, will you be ready?

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There is much to consider during recovery. Let us help you figure out how to come back strong in the coming months.

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