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What lies in the road ahead ahead for the supply chain?

Warehousing and distribution may never be the same, predicts Logistics UK's Paul Wilson

Paul Wilson
27 October 2020
Paul Wilson
Paul Wilson

 

The global pandemic has seen supply chains react and adapt at an incredible pace, proving that our industry really is the driving force to global commerce. But it has also shown us all how fragile extended supply chains can be, with the issues regarding the supply of personal protective equipment (PPE) initially to health care facilities and then across industry as we tried to get back to work  really driving home the point that low cost supply chains may not be appropriate in the future.

The challenges and subsequent conclusions regarding the supply of PPE played out on national TV while quietly, efficiently, and carefully the troops on the ground in our warehouse and distribution facilities adapted to the distancing rules, enhanced cleaning procedures and maintained output at a time when home delivery, in particular, was asked to operate at Christmas peak levels for months on end.

It is likely that some of these tactical changes will be around for many more months to come and some things will never go back to the ‘old normal’.

In this article, I will explore the lasting impact the pandemic could have on urban operations, the high street, warehouses, and distribution.  

Planning

For many years, local authorities sought to encourage people to use public transport by limiting the availability of parking on new developments of office blocks and warehouses; in hindsight, this will cause problems in the post-COVID world. It is likely that any ongoing or future planning discussions will challenge the restrictions on parking as public transport may remain out of favour for some time.

Another likely change in the design of new facilities is the need for more space for welfares areas, such as canteens and rest rooms. These have been squeezed in to smaller and smaller areas traditionally, but with the need to social distance likely to continue, it is probable that all communal areas will grow exponentially.

Urban operations

The reduction in traffic volumes and resulting cleaner air has piqued the interest of many who may have been sitting on the fence and staying neutral regarding emissions and greener technology, but the government has seen it as an opportunity and is encouraging us all to get involved.

We will likely see an increased uptake in electric vehicles (EVs) for domestic and industrial use. Alongside this, the lull in high street shopping represents an opportunity to ‘EV’ the home delivery world, as well as the future retail environment.

The pandemic is also giving us time to pause for thought and revisit the challenges regarding the consolidation of deliveries into city and town centres. While there is clearly an opportunity for smaller retailers to collaborate, it is the local authorities that hold the key.

Many local authorities employ hundreds of people in one or two town or city centre office blocks, and, given that each office block could reduce the number of deliveries by around 50% by using a consolidation centre, it seems incredible that these local authorities and councils do not kick start consolidation in their area by providing the seed funding for an out of town consolidation point. Post-COVID-19, there is an opportunity for this to change.

Warehousing

Within a warehouse or production environment, it may be that we never return to an era without some sensible social distancing and personal protection, after all, we are all now much more educated regarding the spread of all viruses.

If this does turn out to be the case, at one end of the scale, we will see an acceleration in the uptake of mechanisation, automation and robotics, particularly in confined spaces such as narrow aisle warehouses, high activity pick zones and such.

At the more manual end of the scale, we are likely to see more wide aisle pick operations, perhaps even wider than the circa 3-metre normal, to allow for greater distancing with a return to the traditional wide aisle pick zones and separate narrow aisle bulk stock zones that was the preferred approach many years ago.

Distribution channels

The balance of distribution channels has also changed for good.  Increased use of the internet, home working, home deliveries and a smaller high street means that the number of large goods vehicles will continue to reduce whilst the already large uptake of vans and small goods vehicles will accelerate. In recent months, TNT, Hermes, DPD and others have announced huge recruitment campaigns leading to larger networks; let us hope some of this is using EVs.

An uplift in local sortation or stock points to support more frequent, smaller deliveries to homes and offices will create a further uplift in demand for small to medium sized warehouse those around 5,000 to 25,000 square feet, nationwide.  Demand for these has been growing in the last few years so rents and purchase values will rise a result of the increased demand.

At the same time, the high street will continue to change. It is likely to become a destination, almost a day out with more window shopping, or showroom style outlets, think Apple stores but for other product groups, with items being bought online or in store but delivered to homes. This will need careful thought for local boutique shops, but the innovative use of Taxis, Uber and Deliveroo by local farm shops during the lockdown period could be adapted easily to create delivery networks for towns and the surrounding areas.

Overall, we will see some significant changes due to COVID-19. While our industry has adapted and will continue to acclimate, one thing is for sure, it is very unlikely that we will return to previous levels of productivity, operating costs are, therefore, likely to rise and these costs will need to be passed on to the end customers.

Perhaps one good thing that will come out of this difficult time is that the consumer will finally understand the need to pay a true and reflective price for home delivery.

Paul Wilson is supply chain consultant at Logistics UK

For more information on Logistics UK’s Supply Chain Consultancy (SCC) service, please visit logistics.org.uk/services/supply-chain-consultancy

 
 
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