As online sales become increasingly popular, the growth of e-commerce has impacted every part of the supply chain, and material handling equipment (MHE) and fleet services are no different. With more and more brands looking to develop their e-commerce capabilities, their needs for moving and handling inventory are shifting as well. For companies to meet the rising demand for direct-to-consumer orders, MHE offerings must become more innovative.
Below are three ways MHE is transforming because of the prominence of e-commerce:
#1 The need for flexibility.
With e-commerce constantly evolving, companies are looking to avoid being locked into old, antiquated equipment systems. Instead, organizations are exploring ways to create short-term solutions and build an agile system that can adapt at any given time. As direct-to-consumer orders continue to increase, this trend in purchasing behavior is also driving the push for agility in MHE. In fact, some competitors are even collaborating to operate local distribution centers to share the financial burden of meeting individual orders.
As the Amazon Effect continues to inspire innovations in the industry and elevate supply chain standards, the competitive landscape also requires organizations to be more flexible. Business must be able to respond to new developments and have the infrastructure to grow and compete with other players, especially in MHE, which is considered the “backbone” of the supply chain.
#2 The shift to a hybrid omnichannel model.
While direct-to-consumer is expanding, there is still a need to handle large volume orders. To manage both individual parcels and pallets, the hybrid omnichannel model is gaining popularity to balance the requirements of different order sizes. E-commerce has also forced warehouses to operate on an almost 24/7 basis, which requires improvements in MHE to handle more orders and increase efficiency.
Constant technological advances like automation and robotics are taking place, and it is essential to create a plan for transitioning to future models. There is a desire to reduce the amount of traditional equipment and incorporate more automated, less labor-intensive types of models. In response, many companies are evaluating the benefits of utilizing automated guided vehicles (AGV). Particularly in manufacturing, AGVs are being evaluated to take items off the line before they get into bulk packaging in response to the increase of individual orders. With that in mind, it is also important that organizations pilot AGV technology to make sure it is smoothly integrated into the warehouse workflow and the benefits are proven.
#3 The push for business intelligence.
As two-day shipping has quickly become the norm in e-commerce, data collection to increase awareness into costs and efficiency is critical. Organizations are integrating data from labor management systems, parcel tracking, and forklift operations to get a complete picture. Customized reports and personalized reporting platforms are turning this data into actionable business intelligence to drive MHE decision making.
Businesses are creating dashboards to analyze crucial fleet services data. Those dashboards track KPIs to determine program success and can identify high cost units in need of a new approach. Data analysis is used to compare maintenance costs, ensuring MHE procurement choices are cost-effective. MHE is also implementing its own tracking and data collection systems in response to visibility trends in e-commerce order fulfillment. MHE is now leveraging business intelligence tools to provide real-time data that is accessible anywhere, anytime, and on any web-enabled device. These tools are allowing organizations to make data-driven decisions on how to flex into more e-commerce orders by understanding utilization and costs.
As e-commerce increasingly impacts the industry, MHE will also continue to progress to improve the supply chain. Whether it is keeping operations flexible, transitioning to a hybrid omnichannel model, or integrating business intelligence, fleet services is adapting to the needs of direct-to-consumer online orders. To keep up, many businesses have found success in partnerships. A 3PL or outsource partner understands complex pain points, delivers innovative technology solutions, and has the data analytics capabilities to optimize MHE in this rapidly changing environment.
Russell Wells is the Director of Business Development at Kenco Fleet Services.