4 Ways COVID-19 Has Impacted the Distribution Center
COVID-19 has created new pressures and challenges for the distribution center. Here's a rundown of four big changes to operations.
Even before COVID, distribution centres were being pressured to innovate and improve. Global e-commerce has been growing at an unprecedented rate — 14.9 percent from 2018 to 2019. Investment in automation was uneven — in 2019, 49% of distribution centres were primarily manually picking and packing processes, while only 23% had implemented automated solutions for packaging. The industry as a whole was ripe for disruption.
COVID-19 highlighted the need for automation and optimisation of distribution centre operations. Beyond the massive influx of ecommerce orders and disruption of the global supply chain, COVID also brought challenges for health and safety within DC operations. Companies now find themselves perched precariously on a precipice. The right response can help conquer these challenges and emerge as a vital contender in the marketplace; the wrong response risks dropping into a crevasse that will be difficult to climb out of.
Knowing how to respond requires a deep understanding of what these new obstacles are and what they really mean. What were the biggest impacts that COVID-19 has had on distribution centres, and how can they be overcome?
1. Increased E-Commerce Traffic
As stay-at-home orders were handed down from state and local government officials, consumers flocked online to purchase items, both essential (groceries and personal care goods) and non-essential (plants and home decor items). And the rush to stock up on items like toilet paper and hand sanitiser caused supplies to quickly run out.
In the post-pandemic world, e-commerce is expected to increase by another 18 percent, making up 14.5 percent of total retail sales in the U.S. Internationally, online order volume grew 77 percent just in April 2020. And this doesn’t even account for the seasonal increase in holiday orders.
The pandemic is causing long-lasting shifts in consumer buying habits, with over half of consumers indicating that they’re willing to buy groceries online - permanently. Many others will continue to purchase non-essential items online. Distribution centres will need to figure out how to process more packages with the same – or fewer – resources throughout the year, being even more prepared to handle large volumes in addition to holiday order surges.
2. Reconfigured Distribution Centre Floor and Operations
As stay-at-home orders are lifted, distribution centres will need to contend with varied social distancing requirements mandated by countries and local governments. DCs will need to implement changes in the layout of workstations and possibly reevaluate existing workflows to make sure they align with these new safety precautions.
This may mean spacing out workstations to allow for recommended distancing between workers, installing Plexiglass shields between workstations, and ensuring that materials needed for packing are within close reach. Modular equipment and integrated packaging systems that are configured specifically for fulfilment operations can help minimise packer movement, bring materials to the packer and optimise productivity while enabling employee distancing.
Updated workflows, however, will require some additional employee training. Some experts recommend using self-paced online learning or apps which can help roll out training quickly and efficiently. Though, that approach comes with its own set of challenges. One challenge is simply a lack of time. In a survey of learning and development professionals, 19 percent say employees don’t have time to complete new training. It will be important for distribution centres to set aside time and ample space for employees to complete training modules in a safe manner to become fully knowledgeable about the new processes and procedures they’ll have to follow as part of their updated job requirements.
3. Fewer On-Site Staff
New safety requirements have already resulted in staggered or split shifts at distribution centres, where employees are separated into crews with very little, if any, overlap between them. Additionally, fewer on-site staff means that distribution centre employees may need to be rotated into different roles and be cross-trained to perform additional job duties.
This presents the same challenges as training employees on new procedures, as well as an additional issue if hands-on learning is required. Distribution centres will need to plan for training that follows distancing guidelines while still providing the necessary education for employees to expand their roles and learn new skills and processes. Cross-training employees will be an important way to plug any gaps due to a shortage in labour availability, illness or a reduction in workforce.
While fewer on-site staff may make it easier to distance, it will be important to optimise workstations so that employees are able to get orders packed in the least amount of time. Auto-bagging solutions can help employees get more done in less time. Additionally, reconfiguring workstations to keep necessary materials close at hand, and using overhead delivery systems, can also maximise efficiency when there are fewer workers on the floor.
Furthermore, there are two more factors that may contribute to fewer on-site staff. One is the impact of unemployment benefits and economic stimulus payments on employee income, which may make them more reluctant to return to work.
The other factor is health concerns related to COVID-19. Employees with pre-existing conditions who are at higher risk or care for family members in a high-risk category may hesitate to return to work because they fear that catching the virus may be fatal to them or their families.
4. Increased Sanitation Procedures
Lastly, as part of enhanced safety precautions, the distribution centre will need to implement more sanitation procedures as part of daily operations. Cleaning in between shifts, with special attention paid to workstations, handrails, desks, equipment, lifts, and anything that employees touch frequently during their workdays will need to be performed. Additionally, distribution centres will want to frequently clean restrooms, breakrooms, and anywhere employees may congregate, and install touchless items like faucets, paper towel dispensers, and hand sanitiser dispensers to minimise surfaces that employees might pick up a virus from.
More personal protective equipment (PPE) will need to be supplied to employees, and hand sanitising stations and antiseptic wipes should be widely available on the distribution centre floor. Distribution centres will need to create and enforce new hygiene and sanitation processes.
In addition, employees will need to be trained on new processes and procedures for health and safety. For example, employees need to know how to sanitise their workstations before and after shifts, including the proper cleaners to use, the surfaces that need to be wiped down, and what to do with reusable cleaning products like cloths.
Protocols for maintaining equipment with the support of technical service teams provided by authorised suppliers is also a consideration for making sure there is space allocated to visitors for maintenance.
Creating a safer, healthier workplace
Ultimately, the post-pandemic distribution centre will be a safer, healthier place for workers - and if approached the right way, can become even more efficient. The precautions put into place now will help keep employees safe. Cross-training employees will make it easier to scale up or down as order volumes fluctuate, or keep operations going when other employees cannot come into work. Rather than look at this as a burden, these changes are an opportunity for distribution centres to rethink processes and procedures and create a more optimised operation that will help sustain future growth.