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The number-one topic of conversation in the material-handling business is the impact of electronic commerce and the direct-to-consumer channel, says Williams. The change has created an environment that is radically different from the traditional worlds of brick-and-mortar wholesaling and retailing. It is resulting in the presence of many more SKUs than might previously have been seen in a distribution center. And it's demanding much shorter order lead times.
Orders themselves are more frequent and often involve smaller quantities. At the same time, peak-season dynamics are changing, to reflect the transformation of order patterns based on home-based shopping.
The e-commerce era has created companies exclusively dedicated to that technology, as well as retailers selling through multiple channels, although the latter model is more prevalent. "Almost all traditional retail customers are trying to integrate direct-to-consumer and e-commerce into their portfolios," says Williams. "There's really a seismic shift in how you have to do things."
DCs must respond by offering greater storage density and picking stock more quickly. One solution lies in new automated storage and retrieval systems, in combination with work stations for picking. Often the setup will have to accommodate the distribution of both fast and slow-moving SKUs, Williams says.
The integration of multiple systems can be a significant challenge. Williams says it's important to start with an approach that's focused on data and processes, with a detailed map for implementation. "You have a lot of complexity - different flows, multiple processes and some complicated machinery," he says. "You need someone with a lot of software integration experience."
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Keywords: supply chain, supply chain management, inventory management, inventory control, warehouse management, WMS, retail supply chain, e-commerce supply chain, logistics management, supply chain planning
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