The distribution market has gone through significant changes over the past few years, and will continue to do so in 2016. Let’s look at the top trends in this industry for 2016 and how you can prepare your business to meet these game-changing challenges.
Trend 1: E-Commerce Growth
Customers are becoming increasingly comfortable with buying products online, which means distributors must be able to quickly develop an e-commerce presence or risk losing potential business and customers. Today’s consumers expect a seamless purchasing experience and want to be alerted if there are any issues that arise with their purchases. Distributors need to work more collaboratively with suppliers, manufacturers and retailers to gather, utilize and share real-time order information, shipping schedules and inventory levels to make sure customers’ expectations are met.
Trend 2: Different Fulfillment Options Needed
To meet their growing e-commerce needs, distributors will add more distribution centers closer to customers to meet quick delivery requirements. Material handling systems will be important within these DCs to move products faster through fulfillment. More and more retailers will fulfill orders from stores, allowing customers to either pick-up in the store or direct ship from stores. Having organized shelving within shipping areas means orders are picked faster and more accurately, therefore getting out the door on time.
Trend 3: Centralized Inventory Repository
To meet different sales channels (brick-and-mortar, e-commerce, etc.) requirements and to avoid out of stocks or too much merchandise at one location vs. another, companies need visibility into a centralized inventory. When one location looks for a product to fulfill a customer’s order, they will know immediately where the product is – and the inventory is accurate, so it really is there! Fewer out of stocks means more sales to the bottom line.
Trend 4: Focus on Sustainability
According to experts, the global population will reach 8.3 billion by 2030, with demand for natural resources increasing by 50%. This increase will tax available supplies, causing production costs to increase. Using green technologies within your distribution operations will help to lower energy costs and decrease your carbon footprint to address consumer concerns about sustainability.
Trend 5: Mobile continues to rule.
Warehouse managers are constantly on the move, so the ability to use mobile devices to check order status, picking rates, inventory levels, machine availability, etc. means more work can be completed as interruptions are preempted and issues solved in real time.
Trend 6: The Role of Robots
The use of robots will grow as companies imitate Amazon’s use of robotics to increase efficiencies. Other efficiency boosters include bringing the “goods to man” using conveyor-type systems so that pickers travel less, improving picking times for faster order fulfillment.
Trend 7: Increased Traceability
As new government regulations on pharmaceuticals, food and beverage increase, tracking products from raw materials to end customers is a growing requirement for manufacturers and distributors. Traceability will be essential not only where the product is in real time as it moves, but also where it came from, how it got there, how long it has been in route, etc. Data collected as products move through the supply chain can be analyzed to interpret consumer trends and to develop strategies for improving customer service.
Trend 8: Labor Shortages
We’ve all heard and dealt with the driver shortage, but there is also a growing shortage of supply chain talent. The warehouse is typically one of the most labor-intensive facilities. Adding systems and equipment to help pickers speed picking operations, improve productivity and ease physical activities speeds the fulfillment process. Using equipment that improves pick accessibility by minimizing reach helps workers avoid awkward and strenuous picks, allowing them to pick faster and more accurately.
Trend 9: SKU Proliferation Continues
The growth of e-commerce has created an exponential growth of SKUs, creating more complexity in warehouse operations and a need for expansion and space. As you can’t just go out and economically add a new wing to your warehouse, you can maximize space with UNEX SpanTrack, which allows distributors to house 10 times or more products in the same footprint.
The future of distribution will be quite dynamic and challenging in 2016. Working with experts in distribution, like UNEX Manufacturing, helps you to face these issues head on with state-of-the-art equipment – preparing your business for growth this year and for many years to come.
