Warehousing is the backbone for logistics along with the management of the supply chain, and COVID-19 dramatically changed the way we operate. Warehousing operations have not been spared in these changes, and they also impacted many other industries. Many of these changes that reshaped warehousing will last even after COVID-19.
Warehousing is way more than just storage as there are always different reasons for it. They ensure that products are protected against various conditions such as moisture, heat, wind, etc., which can further prevent wastage and spoilage. Some of the functions that warehouses provide include:
The most basic function of warehouses is to store goods. When businesses have surplus goods which they do not need immediately, they can be stored in warehouses. They can also be stored until they are ready for consumption or use after production.
2. Stabilise prices
Warehouses can be used to stabilise prices as they can serve as a time utility. Whenever products are abundant, this leads to a fall in price, but when there is a lack of products, it leads to a rise in product prices.
3. Grading and packing
Grading and packing can be done at warehouses for businesses that require this function. Business owners can request to have their goods packaged into convenient packages or have their goods branded.
4. Risk bearing
Warehouses are used to give the risks that come with the storage of goods to the warehouse keeper. Once the goods are handed to the warehouse keeper for storage, they become responsible for any loss, theft or damage that occurs to goods.
Warehousing and Corona
Warehouses were affected by the pandemic in a significant way, and here are some of the ways that warehousing operations were affected.
1. Storage shortages
Before the pandemic hit, most manufacturers made use of just-in-time inventory manufacturing practices to have lower inventory costs and have more space in the warehouse. Due to the social distancing practices that had to be followed and the different lockdowns implemented to minimize the spread of the virus, operations were put on hold for an extended period. The suspension of operations led to inventory shortages.
To prevent further inventory shortages in the future, many manufacturers have started to keep more inventory in stock. Having too much stock on hand could pose many other challenges, such as capacity issues in the warehouse. To avoid this from occurring, warehouses have had to learn to balance just-in-time and safety inventory.
2. Greater demand of warehouse operations
COVID-19 brought about new consumer habits, and online shopping dramatically increased. Many people were afraid to go and shop in physical stores. The increase in demand for online shopping also affected how warehouses handled goods. Pre-pandemic, most warehouses used to pallet in order to handle goods, but this takes too much time.
To make the process quicker, warehouses have had to invest in technology to assist in picking and packing operations required for eCommerce order fulfilment. Warehouse Management Software is now a critical system to have as it can handle high volumes and it is fast, but also leads to better eCommerce order fulfilment.
3. Need for visibility of inventory
With more customers making use of online shopping, it is essential to have complete inventory visibility; especially when handling higher volumes of online orders, which can be highly challenging. Lack of inventory visibility can lead to customers experiencing stockpiles which can damage your business’ reputation. For the reasons stated above, it has become crucial to gain real-time visibility of inventory by knowing its exact location so that there can be accurate and fast order fulfilment. Technology solutions like Warehouse Management Software can assist in resolving this issue.
4. Labour shortages due to social distancing
One of the most significant issues that warehouses have had to navigate was labour disruptions due to lockdowns and having to reduce the number of employees to effectively maintain social distancing measures that were advised by the Centers for Disease Control (CDC). To ensure that warehouse operations were maintained, voice technology, material handling, and automated storage systems had to be utilised to tackle labour shortages.
5. Demand for cold storage warehouses
The rise in online shopping was not exclusively for electronics, clothing and home goods, but it was also for food. At the beginning of the pandemic, more and more people started cooking and baking. The rise in these activities led to grocery stores running out of food such as flour and yeast. There was also a rise in demand for frozen and prepared foods. To adequately store these products, there was a greater need for cold storage warehouses to ensure quick production and delivery needed to meet customer demands. Though cold storage warehouses are essential for the safety of goods, the technology required to run them is pretty expensive.
The pandemic led to many disruptions across the supply chain, further impacting warehouse operations. Though much of the impact felt for warehouse operations led to some opportunities such as the eCommerce boom, there have been job losses suffered. It has shown the importance of preparation and making use of technology solutions.
Get to know the Types of Warehouses & Their Functions.