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HomeWarehousingThe Implications of Covid-19 on Warehousing

The Implications of Covid-19 on Warehousing

A Covid-19 implementation in a warehouse will have a long-term impact. Some of the long-term effects of Covid-19 in some areas of the warehouse include wearing masks, maintaining a safe distance from others, and implementing distance learning. As Covid-19 variations continually emerge worldwide, workers and supply chains find it challenging to keep up. In order to survive in this environment, warehouses need to be flexible. While waiting for the supply chain to stabilize, several warehouse modifications are being implemented to meet customer demand. Some industries are experiencing unprecedented demand due to a volatile supply chain, while other industries are experiencing a slump. This article discusses the implications of Covid-19 on the functions of warehousing.

Social Distancing and Hygiene

Covid-19 is a disease caused by a variety of conditions that warehouse workers are exposed to. Two examples readily come to mind. A warehouse is an enclosed area with high traffic, containing many people talking at high work rates and/or at high volumes who are often working in cramped or confined spaces, often operating machinery at high speeds. Likewise, warehouses can pose challenges when it comes to mitigating Covid-19 since airborne routes of transmission present a significant challenge. The threat posed by airborne routes to colleagues is significant in airborne environments. Due to the pace of work in these settings, workers are unable to avoid exposure by repeatedly going to restrooms for handwashing. The second issue is that some workers in highly crowded environments, such as warehouses, do not always have easy access to paid sick leave, further enhancing the risk of Covid-19 transmission if workers or their families become ill. For warehousing employers, there are some science-based steps they can take to mitigate these risks. To prevent human-to-human transmission of Covid-19, employers must maintain mandatory social distancing in the workplace and encourage safe hygiene practices on a regular basis. Furthermore, employers need to promote paid sick leave so that it is clearly identified as a preventative measure. These measures are critical to keeping warehouse workers, their families and the surrounding area safe.

More Inventory on Hand

Covid-19 has hit several manufacturers, with inventory shortages and production halted due to lean manufacturing, which was common before the outbreak. Even though lean manufacturing remains a best practice, the balance between JIT inventory and safety stock will change. In order to prevent future stock shortages and production shutdowns, manufacturers will keep more inventory. Inventory on hand can be affected by a number of factors.

In addition to increasing warehouse capacity and space, this will only make the problem worse. Warehouses will need more space to manage this extra inventory than they did to create space for social distancing. The need for warehouses, picking, packaging, and distributing goods increases in uncertain markets and external environments. Warehouses play an integral part in the supply chain because they store inventory that can accumulate in the event of unforeseen fluctuations in demand. Covid-19 requires these new capabilities in order to address its challenges. Ultimately, lean production decreases and safety stock increases, but in a bad economy, the ratio of inventories to economic activity increases. As warehouse inventory increases, it becomes necessary to expand warehouse capacity, either by building larger warehouses, adding more warehouses, or a combination of the two. The impact of many of these dynamics will depend on sectors and their interdependencies.

Accelerated Growth of E-commerce

Since the increase in e-commerce orders has lasted, the warehouse’s order profile has changed significantly. Rather than picking entire cases to be stored on pallets for retail locations, warehouses will pick individual pieces into boxes to be shipped directly to customers. The full case picking system will be replaced by split case picking, drastically changing the warehouse’s material flow, processes, and storage technologies.

The impact of Covid-19 was more pronounced in certain e-commerce sectors. A growing segment of e-commerce is grocery. When Covid-19 first launched, consumers, competed for grocery pickup times online. In-store pickup is not as popular as customers are choosing online pickup, as they rarely return to the store.

Omni-Channel Distribution

Omnichannel has always been a buzzword in the fashion industry, but the Covid-19 pandemic and changing consumer expectations are forcing retailers to open up omnichannel more than ever. Combining the simplicity and seamlessness of e-commerce with in-store shopping is a challenge that many retailers are trying to solve. There is a suggestion for consumers to purchase online and pick up in-store. As warehouses shift from picking full cases for retail stores to picking individual items for end customers, they also need to manage multiple delivery options. Customers can purchase products from anywhere and have them delivered to them wherever they want. This includes product returns (shipping back or in-store return). Combining the simplicity and seamlessness of e-commerce with in-store shopping is a challenge that many retailers are trying to solve. There is a suggestion for consumers to purchase online and pick up in-store. As warehouses shift from picking full cases for retail stores to picking individual items for end customers, they also need to manage multiple delivery options. Customers can purchase products from anywhere and have them delivered to them wherever they want. This includes product returns (shipping back or in-store return). As Covid-19 accelerates e-commerce demand, omnichannel distribution is not going away anytime soon, no matter how much customers desire it. This has caused warehouses and distribution centers to develop omnichannel distribution technologies and processes.


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References

Deng Hao David, DLSM. (2021). “Key Success Factors for Implementing an ASRS System” Retrieved from https://publication.sipmm.edu.sg/key-success-factors-implementing-an-asrs-system/ . accessed 20/03/2022.

Elson Wu Wei Bin, DLSM. (2020). “Crucial Factors for Last-Mile Delivery of the Corporate Gifts Sector” Retrieved from https://publication.sipmm.edu.sg/crucial-factors-last-mile-delivery-corporate-gifts-sector/ . accessed 20/03/2022.

Joey Yeoh, PDLM. (2017). “The Logistics of Transporting Perishable Goods for Cold Chain Management” Retrieved from https://publication.sipmm.edu.sg/logistics-transporting-perishable-goods-cold-chain-management/ . accessed 20/03/2022.

Jonathan Goh Seng Kim, DLSM. (2018). “Key Strategies to Improve Warehouse Space Efficiency”. Retrieved from https://publication.sipmm.edu.sg/key-strategies-improve-warehouse-space-efficiency/ . accessed 20/03/2022.

Lai Chee Long, DLSM. (2020). “Key Considerations for Effective E-Commerce Fulfilment”. Retrieved from https://publication.sipmm.edu.sg/key-considerations-effective-ecommerce-fulfilment/ . accessed 20/03/2022.

Le Thi Khue Tu, DLSM. (2021). “Logistics Recovery Plan due to Covid-19 Pandemic”. Retrieved from https://publication.sipmm.edu.sg/logistics-recovery-plan-due-covid-19-pandemic/.accessed 20/03/2022.

Tan Xin Ting, DLSM
Tan Xin Ting, DLSM
Tan Xin Ting has substantive years of experience in the field of warehousing and logistics management, and specifically in the provision of global logistics services. She holds the Executive Certificate in Warehouse Management, and she is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Xin Ting completed the Diploma in Logistics and Supply Management (DLSM) in March 2022 at SIPMM Institute.
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