PARCEL May/June 2022

Page 24

By Brendan Heegan

3 SUPPLY CHAIN DISRUPTIONS TO WATCH IN 2022 AND BEYOND

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ou can’t get through a workday without hearing the word “disruption.” While business is ever-changing, we’ve all seen how the rate of change since early 2020 has disrupted and accelerated the evolution of business. Let’s explore three of the most prevalent disruptions that all companies throughout the supply chain must face and overcome.

The Need to Improve All Human and Automated Labor People will always be the core of every company’s success. The past two years have taught us the importance of labor retention. For long-term success with your company’s talent, you must offer competitive wages, enhanced benefits, as well as a strong culture and work environment to take care of your permanent employees and ensure high retention rates. And, the continued growth of robotics and automation will provide a key 24 PARCELindustry.com  MAY-JUNE 2022

supplement to your labor to help boost overall productivity and efficiency. No longer solely for the domain of large companies, the price of robots for distribution centers and warehouses of all sizes can start under $10,000 for some models. Advancing artificial intelligence, lowering replacement part costs, and other factors have contributed to making robotics a near-term cost-effective option. The prevalence of more lower-cost robotic options has caused the recent surge in sales. The Association for Advancing Automation reported that the North American industrial robotics market had a 37% increase in units sold during the third quarter 2021, with the food and consumer goods segment seeing a 43% increase. In addition, warehousing is one of the segments that A3 President Jeff Burnstein noted is an “emerging” market for robotics. Retail operations also have high robotic adoption rates, taking advantage of benefits such as better cube utiliza-

tion and improved facility redundancy. Automation also saves time. In non-automated warehouses that approach one million square feet, up to 30% of employees’ time is spent simply traveling between work areas within the facility to do their jobs. Retail, health care, and high-tech and other industries that have incorporated robots for picking and taking items to packing locations use what’s called a “goods-to-person” application, where people finish the process. This approach streamlines the overall logistics process. And those investments in robots and automation are paying off for many. For example, Brazil, Dafiti Group’s LEAP 581,250 square-foot (54,000 square-meter) fashion and lifestyle warehouse for e-commerce operations has seen great process improvement by adding automation and the software to run it. For the automotive portion and its 500,000 SKUs, approximately 300 robots are incorporated into its automation system, which has made process picking time three times faster while increasing throughput per hour by 400%. Sustainability Will Be Key Consumers’ awareness of and concern about social issues, driven in large part by Generation Z, is spurring a focus on sustainability in every business; it’s no longer just a “nice to have” aspect. For a consumer focus, sustainable packaging is growing at a compound annual growth rate of 10.3% in the US through 2027 to top $305.31 billion, says Market Research Future. The industries driving this growth are expected to be in food & beverage packaging, personal care, and medicines. Warehouse design is another area where companies can be sustainable, as energy costs often account for 15% of the operating budget. Renewable energy can help minimize those costs and boost building efficiency, such as by installing solar panels on roofs and using renewables for heating and even power forklift trucks. Adding Virtual to Your Digital Transformation While digital transformation