Peak season is here, and typically businesses across retail, e-commerce and logistics industries will ramp up fulfillment operations, look to hire more workers and rely on their supply chains to get customers the products they want fast. Now as the world works toward economic recovery — even with the looming threat of COVID-19 variants — businesses recognize that they must transform their supply chains from a state of reactive response to one of true resilience.
The pandemic forced businesses to quickly react to changes in labor availability, shifts in customer demand, new safety regulations and gaps in their supply chains. Some companies had already developed the infrastructure to respond to the uncertainty, achieving business growth during the global crisis. Others developed innovative business models that both met changing consumer demand and kept their workforce safe. And, many others simply survived.
As peak shopping season gets under way, business leaders must be able to navigate the unexpected and equip their supply chains to meet increasing consumer demand for fast order fulfillment with low-cost or free shipping. Artificial intelligence (AI)-enabled robotic automation is the cornerstone to building resilient supply chains that will not only help companies weather uncertain times, but also enable their businesses to grow.
Hiring plans offer short-term fix
Retailers and their logistics partners often turn to seasonal workers to manage the anticipated uptick in orders. For instance, this peak season sees major big-box stores hiring extra workers for the holiday season, even offering bonuses to those working through the holidays.
Still retail, e-commerce and logistics industries historically have a difficult time finding and retaining employees across their warehouses and often have to incur the costs of high turnover rates as workers seek other employment options. Even after surviving peak 2020 at the height of the Coronavirus disease (COVID-19), third party logistics providers remain concerned that this peak season could be worse.
A recent survey of 200 3PLs found that 79% are concerned that a resurgence of COVID-19 will negatively impact their businesses’ supply chain operations, and nearly half (47%) plan to pay higher salaries to attract and retain employees in 2021. More than 30% reported that “having enough resources to meet the demand of consumers and keeping deliveries to end users on-time is more challenging this peak season than in 2020.”
Now more than 18 months into the pandemic, industry watchers still warn that there is “no end in sight” for the supply chain disruptions brought about by COVID-19. Labor shortages and supply chain disruptions will continue to impact revenue projections.
When the labor pool is shallow and employee turnover rates are high, business leaders need to look at other ways to alleviate the pressure on their supply chains. Worries around COVID-19 lingering will require ongoing safety requirements, limit staff in warehouse spaces and demand safety precautions. These concerns can be addressed with robotic automation.
Robotic automation is the strategic, long-term solution
Robotic automation in fulfillment operations is set to explode in the coming years, in large part due to the surge in e-commerce order volume coupled with labor shortages further exacerbated by the pandemic. ABI Research forecasts that worldwide commercial robot revenue in warehouses will have a CAGR of more than 23% from 2021-2030 and exceed $51 billion by 2030. While industry watchers forecast increased adoption of robotic automation, many businesses have already invested in the technology — and for good reasons.
Some companies are building supply chain capacity and deploying automation technology to stay ahead of consumer demand and increase productivity. And, the number of retailers embracing automation to address increased e-commerce continues to grow.
Businesses need supply chains that can pivot in the face of uncertainty. To do that, they must embrace AI-enabled robotic automation now as a fundamental component of an advanced fulfillment center and a resilient supply chain. Automation technology using robotic systems addresses the challenges incurred by operations that rely too heavily on manual processes and inefficient workflows.
All sorts of businesses must respond to these evolving online shopping habits by transforming their supply chains to manage high volumes of orders and exceed customer expectations not only during peak, but also year-round. AI-enabled robotic automation is already helping businesses achieve the productivity gains needed to handle increased order volume across their supply chains, respond quickly to unplanned events, and exceed customer expectations.
With a trusted partner offering a consultative approach to transformative robotic automation, businesses can start evolving their fulfillment centers to meet demand today and into the future. Robotic automation will power the resilient supply chains needed to meet ever-increasing demand.
