In the past several years, the 3PL (third-party logistics) industry has benefited from the evolution of e-commerce that turned the tables on the way people like to shop, causing online shopping to take the reins as the new norm. Businesses found that using 3PL providers could streamline pick and pack fulfillment functions and fast track their deliveries. According to supplychain247.com, “3PLs saw a 21.6% revenue increase between 2016 and 2018.” Not only did 3PL services help automate fulfillment, but they also began to appeal to businesses as a means to save money and reduce their labor overhead. 3PLs were revealed to save companies time and money by sidestepping the purchasing or leasing of a warehouse, staffing a warehouse, and training personnel in pick and pack and other fulfillment services. By outsourcing supply chain operations, businesses were able to handle and deliver more orders, more efficiently, thereby increasing their bottom lines. More automation meant businesses could turn more of their focus on their core business initiatives and utilize their talent as intended.
2020 will see more technology in 3PL operations
Now, as we begin a new decade, new challenges in the face of increasing online business, based on a continuing labor shortage and rapidly developing technology is pushing the 3PL industry into implementing technology innovations. Some we’ve seen coming for a while and others “may seem more like science fiction than reality today, but can be expected to prevail in the years to come,” according to David Sparkman, in his Jan 2020 MHL.com article, “Distribution Executives Spot Trends for 2020 and Beyond”. Interviewing a panel of executives from the supply chain industry, the Warehouse Education and Research Council (WERC), the panel of executives said they could see more interest in technological innovation in 2020. The WERC panel sees the long term, “developments in technology providing powerful and revolutionary solutions to helping automate and accelerate fulfillment operations in the years to come.”
Labor shortage and consumer demand driving technology
To complicate labor shortages in the pick and pack fulfillment area, consumers are demanding shorter and shorter delivery times, coupled with a ravenous appetite for more products. With these factors taxing the distribution arm of the fulfillment process, 3PL companies, such as Phase V are looking to technology to expedite their pick and pack processes, “to meet consumers’ demand for speed, agility and quality.” Focusing on making the most effective use of available labor resources, WERC said, “The labor shortage and higher turnover rates pressure operations to re-examine their strategic workforce planning, with a keen interest in technologies like robotics and connected Internet of Things (IoT) solutions, as well as more aggressive hiring and retention activities.”
Mobile Tech on the move
3PLs are already investing in systems that improve safety and productivity that enable management software users to “leverage Cloud and mobile platforms.” Mobile platform technology for warehousing, distribution, and transportation has grown exponentially in the last few years, such that the industry will see wider adoption of iOS and Android-based applications for warehouse management in 2020.”
Automated systems on the increase
WERC panelist, Aaron Wilker, believes that pick and pack sectors will see an increase in implementing automated systems, “in the areas where they increase productivity and support the bottom line” and that more companies, seeing the success of automated systems at other companies will be better able to quantify their investment capital in automated systems. Wilker says he’s seeing “more interest in automatic guided vehicles (AGVs) and autonomous mobile robots (AMRs) to interface with conveyors and move pallets or products as a supplement to the manual labor force.” Wilker predicts that technology that increases accuracy and minimizes the number of times an item is touched by labor, “such as automated storage and retrieval systems and (ASRS) and augmented reality visual headsets – will likely see more installations as well.”
Robotics augment human performance
WERC believes automated systems will also be increasingly implemented in 2020. Panelists concurred that robotic lift trucks are making an impact in the industry, getting a lot of attention recently, “for any task that involves picking up, transporting and dropping off pallets.” Offering greater dependability, robotic lift trucks also “enhance labor productivity.” This should allay the fears that robots will replace humans in warehousing and distribution centers in the near future. The panel agreed that when robotic lift trucks are included as part of strategic workforce planning, it “fosters ‘cobotics’ with humans working alongside robots.” It’s a case of robotics increasing the efficiency of human resource-strapped businesses, “to make repetitive tasks and more complex, value-added functions more efficient.”
Training and precautions in an automated environment are essential
With automation increasing efficiency and productivity in the workplace, safety compliance officers stress the importance of thorough training for those who work in automated environments. Noting an uptick in the number of OSHA violations at some companies with implemented augmentation, companies’ panelist, Chaneta Sullivan cautions that recent OSHA communications “continue to show a high focus and citation rate for workplace accidents and injuries involving machinery, machine guarding, lockout/tagout, fall protection, and more.” Preventive measures aren’t just a good idea, they’re crucial to remaining in business if companies are paying out a lot of money for compensation in injury lawsuits.
Other technologies beyond 2020
In an era when more transparency and sustainability are going to be at the forefront of business operations, alternative power sources will be more in demand. We’re already seeing indications that drones and electric cars are shaping the future. Additionally, lithium-ion batteries provide superior performance, require no maintenance to charge and last longer than traditional acid-filled lead batteries with fewer required to power vehicles. Another source to consider: Hydrogen fuel cells, once considered cost-prohibitive are coming down to an affordable price range. Producing no harmful emissions, with rapid refueling capacities of three minutes, hydrogen fuel cells significantly reduce greenhouse gasses, while maximizing production. Looking further into the future, WERC advises companies to start investigating two future transportation modes: Commercial space travel and Hyperloop rail systems. Several conferences are scheduled that delve further into automating warehouse and distribution operations, such as pick and pack processes. The WERC Annual Conference is scheduled for May 2020 in Providence, RI and the Pick & Pack Tradeshow in Barcelona, Spain January 2021.
Phase V Fulfillment 3PL will partner with you to streamline your pick and pack operations and customize your fulfillment services to help save money and grow your business in 2020! Let our investment in 3PL technology and automation pay off for your company.