WERC,the Warehouse Education and Research Council, is a really fantastic organization that has done a lot to help educate professionals in the distribution industry. Easy Metrics was fortunate to be able to present at a WERC conference back in 2014. Since then, our industry has gone through a massive transformation, and WERC invited us to present again in May 2018. Here is a link to the video of that presentation.
I would like to highlight some of the changes that we have seen these last five years, their impact, and future impact.
Labor Market and Robotics:
The booming economy and other demographic factors have created a major labor shortage for supply chain talent. The market is responding by creating new technologies (robotics, autonomous vehicles, etc.) that help companies reduce their labor requirements per unit produced. But it is not happening fast enough, and the tight labor market is forcing wages higher. This stands in great contrast to 2014, when the economy just started emerging from a prolonged recession, and labor was much more abundant. The tight labor market should continue for at least another year or two until the next business cycle downturn. These new technologies will begin to have a positive impact on the labor shortage, but their adoption will likely be slower than the current hype cycle predicts.
A common theme throughout the Easy Metrics blog is data is everywhere. In 2018 we have seen Big Data arrive firmly in the supply chain industry. Major upgrade cycles in warehouse management systems combined with major system upgrades have created an explosion of new data sources. Lift trucks and wearable telematics are making strong inroads, as are GPS-enabled technologies. The big question now is what to do with all of this new data. At Easy Metrics, we are excited to integrate and work with all of these new data sources. The datafication of the warehouse should continue unabated.
Cloud services have gone mainstream and are frequently the preferred choice over traditional enterprise solutions. Infrastructure investments have made latency rates to the cloud almost the same as those within an internal network, so the hardware and system management cost advantages of the cloud are quickly becoming apparent. Hybrid cloud solutions are also gaining traction. We think the cloud will continue to replace traditional on-premise solutions.
E-commerce has become the 1200-lb gorilla thanks to Amazon. It is currently 9.1% of retail sales and growing over 15% a year. Fast, cost-effective parcel delivery is now an expectation and, thus, a competitive advantage for those that can deliver. Omni-channel distribution will become the norm and not the exception, and it will require substantial system upgrades, investment, and training. E-commerce will continue to displace traditional retail over the next few years.
WERC continues to attract and present thought leaders in the distribution industry. If you have not attended one of their education conferences, I highly recommend it.