Outlook 2016

As one of five industry thought leaders, I share my observations and insights on potential critical issues likely to impact the warehouse/DC sector this year in the January/February 2016 issue of the WERC Sheet.

Contributors to WERCSheet’s Outlook 2016 panel include: Steve Johnson, managing principal, Johnson Stephens Consulting; Jennifer Pazour, Ph.D., assistant professor of industrial and systems engineering, Rensselaer Polytechnic Institute; Norman Saenz, managing director, St. Onge Company; Geoff Milsom, director, enVista; and Lawrence Dean Shemesh, president-CEO, OPSdesign Consulting.

My Outlook for 2016 is provided below:

The millennial generation
Jennifer Pazour, Ph.D.

The millennial generation has a major stake in defining both what the warehouse industry needs to do, as well as who will help get it done.  Specifically, the millennial generation is the warehouse industry’s current and future customers, as well as its workforce.

From a customer perspective, millennials are eager to do everything on their smart phones, and have very little patience for non-valued added activities, such as waiting.  This has implications for the warehousing industry as it changes order profile structures and lead time expectations.  Thus, distribution and logistics operations will need to be designed to be agile and responsive.

The millennial workforce, who are interested in making an impact, skilled in technology, and natural at identifying non-valued added processes, seem like a great solution to meet such dynamic customer demands.

For a warehouse to be responsive to dynamic customer demands, as well as profitable, utilization of both physical and human resources is a high priority.  An emerging way to achieve effective resource utilization in a dynamic environment is through the use of on-demand peer-to-peer logistics systems.

These systems use a business model for the movement and storage of goods that matches resources owned by a group of independent users to demand requests.  These systems are part of the “sharing economy” and utilize technology platforms that are able to provide wide reach visibility into untapped resource capacity (such as warehouse space, transport space, and delivery services).

A variety of such companies have sprung up in all aspects of the supply chain.  These include companies like FLEXE that connects companies with underutilized warehousing capacity to companies that need space, as well as companies that facilitate crowdsourced transport and delivery, like Deliv, Instacart, Amazon Flex, and Cargomatic.

On-demand peer-to-peer logistics systems have the ability to improve resource efficiency by increasing visibility and accessibility of existing, idle resource capacities.  They can reduce the costs associated with changing resource capacity, which allows companies to be more flexible.

In addition, these system, which require supply chain visibility and security, will also influence traditional warehousing and logistics operations.   Initiatives that improve supply chain visibility, create increased transparency and security, and embrace technology, will create new capabilities and business opportunities for traditional warehousing and logistics operations as well.

As an industry, we should position ourselves as proactively leading the charge to provide increased customer service capabilities by embracing new business models, technologies, and the changing workforce.

I’m excited to continue this discussion while I moderate a panel on “Crowdsourcing and Collaborative Warehousing and Logistics” at the 2016 Warehousing and Education Research Council Conference in Providence, RI in May.  To check out the conference preview and read the other through leaders’ thoughts on 2016, check out the WERC website.