The Covid-19 pandemic has had a big impact on daily warehouse operations. New regulations, as well as business-driven safety protocols, have changed the way many warehouses operate and everyone has had to adapt.
The biggest ‘jolt’ resulting from the Covid-19 pandemic was the strict lockdown closures of many warehousing facilities, except for skeleton staff. Then, once these facilities started operating again, it was under strict new regulations to keep everyone as safe as possible. We take a look at how this has affected the warehousing and logistics industry, and whether some of these changes will be permanent.
1. Government regulations
As we’re all aware, government regulations around Covid-19 are regularly updated and adjusted according to the perceived threat level. Warehouse managers have had to familiarise themselves with the regulations on each of the different levels and then adjust their operations accordingly. This has been extremely challenging but has also taught many employees and companies how to be more flexible.
2. Increased warehousing demand
When borders and non-essential businesses closed, there was a spike in the demand for warehousing. Companies needed more space for longer periods as their goods were not being sold. The supply chain came to a halt and everyone needed storage space until they were required to operate again.
The catch was that nobody knew for how long the extra space would be needed. Warehousing suppliers that didn’t have the necessary extra space were either forced to outsource at a cost or had to acquire additional temporary space, which also came at a cost. In many cases, this additional cost was transferred to the client, but other suppliers could carry these costs for a limited time.
It thus became a juggling game of cost vs risk vs customer service. Now that most of us have been through the lockdown levels, it will likely be easier to predict and budget should we go into a hard lockdown again. The initial wave, however, was a big challenge in the warehousing industry as it was one of the few sectors that saw an increase in demand, but under strict regulations.
3. Limited resources
At the same time that the need for warehousing increased, government regulations also limited the number of staff that were allowed on-site. In some cases, this had little effect, especially in large digitized warehouses where limited manpower is needed. In smaller, or more niche warehousing segments, the limit placed on staff count put huge pressure on staff members and the warehousing companies in general, to handle increased volume, but with only a fraction of the staff.
Some warehouses tried to add a night shift to balance things out, but curfew quickly got in the way. If you couldn’t get a permit to operate outside of curfew hours, you quickly had to adapt to an increased workload with reduced staff.
4. Creative Solutions
In many instances, warehouse staff have been instrumental in coming up with innovative solutions during the pandemic. They are the people who know the clients warehousing needs first-hand and have been able to adjust schedules, shipments and even warehousing locations in order to adjust to the limitations that were placed on operations and transport.
The key learning here is that your most crucial resource will always be employees and training and empowering them to a level where they can adapt and still keep the wheels rolling, so to speak, is possibly the most important business decision any company can make at this time.
5. Safety and Security
As with all other businesses, the warehousing sector has had to put strict Covid-19 measures in place. This includes social distancing, the wearing of masks, and regular sanitising and fogging of the premises
In the warehouse space, however, workers are often more at risk. There is regular contact with the ‘outside’ with deliveries and collections, and in many cases, people need to work closely together when loading or off-loading. In some cases, this has forced warehouse operators to completely change the way goods are handled, which has all come at additional cost.
At the same time, if a staff member contracted Covid-19, all staff that had been in contact with that person had to quarantine for two weeks and the workspace had to be fumigated, according to government regulations.
This has added a lot of additional costs and resulted in unforeseen delays within the industry. At the end of the day, all businesses have had to place the safety of staff, suppliers and customers first, no matter the cost.
6. The positives and the future
Despite the many challenges, the warehousing sector has learned some positive lessons. Many companies have become much more flexible and this has resulted in better customer service and even new revenue streams.
The fact that there was a spike in the need for warehousing during the pandemic has once again proved how crucial this step is in the supply chain: when other links break/stop, warehousing is always the fallback. Many customers have had to re-evaluate their warehousing needs and are willing to work with suppliers to find a format that is flexible enough to withstand potential future lockdowns or delays.
7. New Technology
Many warehouse operators are switching to some form of Artificial Intelligence (AI) to streamline processes and improve picking rates and shipment. Depending on the warehouse requirements, this AI can be used from basic stock-take to creating predictive models based on previous customers needs. Some systems will prepare and ship recurring orders and can flag potential shortages before they become a crisis.
The potential for AI is endless and It all depends on the type of goods being stored, the size of the warehouse, and your customer base, something we see occurring in the warehouse operations management in the future.
While the Covid-19 pandemic has had a huge effect on the industry and there have been many challenges and pitfalls, it is encouraging to see how quickly this sector managed to adapt. This is a definite indicator that warehousing is more necessary than ever and that this industry will thrive, as long as it remains flexible.
Receive more insights about transitioning warehouse protocols for your business under Covid-19 by subscribing to the blog.