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Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

How the connected distribution centres are helping organisations keep consumer demand at bay

22-Mar-2018
How the connected distribution centres are helping organisations keep consumer demand at bay
Increasing consumer demand for fast, accurate delivery is changing the way retail distribution centre (DCs) operations are carried-out. Last year’s holiday shopping season was a key reminder for DCs – whether brick-and-mortar or e-retail – about the rate at which this transformation is taking place and what they need to do in order to stay competitive.

E-retail distribution volume has accelerated at an incredible rate over the last few years. In fact, during Cyber Week 2017, there was a 23 percent year-over-year increase in e-retail distribution in the U.S alone – and there’s no sign of this slowing down.

The pressure on retailers is only exacerbated by the rise and change in consumer demand. Whether shopping online or in stores, customers expect more product variety and availability as well as faster deliveries and value for money. The means order fulfilment is now a more complex procedure than ever; rapidly processed and creating huge pressure on DCs and their operators.

The combination of these challenges is causing DCs to reconsider operations and look for new strategies to drive efficiencies. The idea of being better “connected” has cemented itself as the first step on the road to digital transformation and being equipped with smarter DC operations. Connecting equipment to people and processes allows businesses to collect and analyse information from every aspect of their operations. Only with this, can firms make real-time decisions to ensure accurate, on-time deliveries.

But how can this actually be done? The key lies in connecting machine-level sensors within a DC via an internet of things (IoT) framework. Then, information is fed into a cloud-based platform where data can be processed and analysed. Incorporating these solutions in the DC permits retailers to drive greater levels of autonomy throughout the business and ensure that DC performance is as good as it can possibly be.

Armed with a connected DC, operators can minimise the ever-growing complexities of modern fulfilment requirements. IoT and cloud-based services enable managers to make better-informed decisions to keep operations running smoothly, irrespective of the amount of orders or the associated complexities. Furthermore, to maximise equipment uptime and achieve reliable asset performance, this connected DC framework offers predictive analytics and health monitoring services.

However, the question remains as to how exactly retailers can introduce connected platforms into their DCs. In recent years, the market has been flooded with various solutions claiming the same thing, and it is vital that retailers properly research and evaluate any offerings. Some promise to bring a tremendous suite of functionality to the table, which upon review is in fact a patchwork of custom software and controls. This will only complicate matters further down the line with new, added complexities.

When investing in the technology for a connected environment, retailers should look for a reliable, integrated software platform that simplifies warehouse execution. It should offer businesses the flexibility to get the precise functionalities they need, while allowing them to scale and extend the system to their specific requirements — without suffering the costs of third party customisations.

And above all, retailers should look for a connected warehouse system that will help them evolve and increase automation levels further down the line as their business model changes.

Grouping sensors, equipment, automation, workflows, workers, orders and enterprise data leads to a truly connected distribution centre. Why does this matter? Because organisations can increase throughput, cut down on errors, spot equipment issues, allocate resources on demand, and simplify complex operations. All of this results in more productive, happier employees (which can subsequently limit staff turnover), optimised operations and a safer work environment, and retailers transforming productivity in line with today’s rapid-fire-commerce and omnichannel requirements.

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