Increased use of data in the supply chain has a number of exciting potential implications for companies hoping to speed up their fulfillment processes. In addition to enabling decision-makers to act more quickly and decisively, a stream of information from the internet of things also enables the further expansion of automation.
Warehouses and fulfillment facilities run with heavy automated components, including industrial robots. This internal change will have serious implications for supply chain experiences and expectations, as well as the physical spaces associated with high-speed sourcing and fulfillment. One of the most exciting aspects of the technology is how much potential for growth still remains.
How do today's fulfillment centers work?
A recent Architect's Newspaper piece looked at the current supply chain from a unique angle: When automated technology becomes the driving force of the industry, how is the design and usage of warehouse space changing to accommodate this fact? According to the source, the trend, being driven by large retailers such as Amazon, is toward huge spaces.
The focus on direct-to-consumer sales, with reduced need for retail shops and a need to keep a huge variety of goods ready to serve customers' whims, has caused facilities to balloon to impressive sizes. Amazon's warehouses begin around 300,000 square feet and can top 1 million. Architect's Newspaper also noted that within these spaces, large areas are set aside for functions such as box compression.
Of course, due to its multifaceted product lineup, Amazon hasn't turned entirely to computerized mega-centers. The source pointed out that the company divides up its facilities by item type. Some are staffed by individuals picking and packing products, while others are based on giant shelves patrolled only by robots. Other companies are following Amazon into setting up new fulfillment networks, with the news provider naming Wal-Mart, Target and Home Depot among the firms that have altered their approaches.
Data's predictive power
While e-commerce's rise seems to incentivize huge warehouse spaces holding every conceivable piece of merchandise for customers, the increasing presence of data has had other effects on the supply chain, helping organizations offset the potential inefficiency of such a maximalist approach to inventory. As RFID Journal contributor Uwe Henning explained, data analysis is becoming so strong within today's supply chains that companies are using it to make predictions about what they'll need and where.
These projections can cause retailers to cut down their stock amounts, whether they work primarily in brick-and-mortar realm or online. Henning started that a German online seller has reduced its on-hand products by a fifth, all through the power of better demand forecasting. Crunching real-time numbers may be especially helpful in industries such as fashion, where items come in many sizes and colors, and ordering should be especially precise.
It's clear that better information technology hasn't yet had its greatest impact on the supply chain, but the two trends above represent two poles of its effects thus far. Between robotic pickers patrolling shelves full of every item imaginable and companies cutting down on the items they keep on hand due to better predictive data, there are multiple actionable strategies being put in place today.