Connecting DC Assets to Meet Rising e-Commerce Challenges
The unrelenting pace of e-commerce growth is pushing traditional distribution centers (DCs) beyond the limits of their capabilities. In this competitive environment, rising consumer expectations, high order volumes, SKU proliferation and seasonal inventory changes have introduced unprecedented fulfillment complexities.
It’s all part of an e-commerce landscape that shows no signs of slowing down. According to a report by U.S. Commerce Department, U.S. online retail grew faster in 2017 than it has since 2011, representing 13 percent of total retail sales and 49 percent of the growth. When you consider that 80 percent of DCs are manually operated, it’s easy to see why many retailers are struggling to keep pace.
Simply adding more labor to address increasing volumes, velocities and complexities is not a viable long-term strategy. Changing workforce demographics mean industry growth is quickly outpacing the labor pool, as 60 percent of supply chain jobs require skills which only 20 percent of the workforce possess. Meanwhile, labor costs are also on the rise.
What’s more, tomorrow’s fulfillment requirements will push workers beyond their own physical and cognitive capacities. To keep pace, e-retailers must quickly adopt new strategies that employ emerging automation and connected technologies, which are now available for DCs.
Enter the Connected Distribution Center
Recently, leading e-retailers have looked at the concepts of digital transformation and the industrial internet of things (IIoT) to address escalating distribution and fulfillment challenges. These retailers are recognizing the value and necessity of embarking on this technological journey — making the transitions from manual to automated processes; from disparate to connected workers and systems; and from localized to enterprise-wide visibility into all fulfillment activities.
It’s a transformation that Honeywell Intelligrated is enabling through our Connected Distribution Center offering. From machine-level sensors, connected workers, material handling equipment and robots to automated systems, cloud storage and insightful data analytics, we’re giving e-retailers the tools needed to increase the efficiencies of their operations.
Through the digitization of the fulfillment center, retailers can rise to the e-commerce challenge and lay the foundation for growth by capitalizing on information from every aspect of their operations. For many, simply beginning this transformation will help them address today’s service level challenges and allow them to do more, faster, across the entire enterprise.
The Connected Distribution Center is designed to help retailers meet the future head-on and achieve higher levels of reliability, utilization and productivity from all their assets — at a reduced cost. With each passing day, we’re gathering information that will help retailers drive greater degrees of autonomy across their enterprise — allowing them to leverage data for real-time decision making.
The next 10 years are sure to be a period of change and opportunity for e-retailers. At Honeywell Intelligrated, we’re excited to bring solutions to market that help our customers address these challenges and prepare for a future that will undoubtedly require the efficiencies that only machine learning and artificial intelligence can bring.