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On the Move Toward Digital Transformation

On the Move Toward Digital Transformation

   Pieter Krynauw

On the Move Toward Digital Transformation

In the past few years, we’ve witnessed a digital transformation taking place in a variety of industrial sectors, and distribution and fulfilment is no exception. E-commerce pressures are driving retailers, wholesalers and third-party logistics providers to accelerate their evolution to more digital, automated business operations and fulfillment processes. 

Throughout our industry, technologies like robotics, automation, data analytics, machine learning and artificial intelligence are no longer part of some faraway future, but the very tools companies are starting to integrate into their daily business practices. Not only is this evolution helping these companies deliver consistently exceptional customer experiences, it’s also introducing solutions to traditional challenges while ushering in a new era of process efficiencies. 

Today’s distribution and fulfillment operators face a perfect storm of market challenges:

  • Service level expectations: Consumers want faster, cheaper shipping and accurate, on-time deliveries of an ever-expanding variety of products, and these rising service level agreements dictate order fulfilment process improvements. Pure-play e-tailers and omnichannel retailers alike are faced with escalating speeds, volumes and complexities in their DCs. 
  • Labor challenges: At the same time, rising labor costs and workforce shortages are shared hurdles faced by most, if not all, DC operations. Labor accounts for up to 70 percent of DC operational budgets, while industry growth is outpacing the labor pool by a ratio of six to one.
  • The uptime imperative: Limiting unplanned downtime is critical to running profitable operations. Every hour of downtime results in idle workers, potential overtime costs, shipping and logistics delays, and a variety of ripple effects that can ultimately chip away at profits and service level agreements. It all quickly adds up: as much as $10,000 for an hour of downtime, and much more for extended durations.

For these reasons, “digital transformation” has become a stated business objective for most online retailers. It is necessary for ensuring survival in this ultracompetitive climate and essential for growing a loyal customer base. But the rate of progress in this transformation is as diverse as the spectrum of fulfillment operations. No two are alike, and the drivers, goals and extent of this transformation are as varied as the number of SKUs found in a typical e-commerce DC inventory. Regardless of where you sit on this continuum, you’re probably seeking guidance on how to take the next steps on your journey.

Introducing our new OTM publication

To help you achieve your business goals, we’re excited to launch our publication, “On the Move.” This periodical is an extension of our industry stewardship platform and is focused on providing insights about the most relevant trends, tools and topics affecting our industry. Our inaugural issue will address the process of digital transformation by highlighting some of the technologies DC operators are leveraging on their journeys. Among the list of topics, you’ll find: 

We hope these topics and this new resource will help you explore the tools and technologies within your reach. At Honeywell Intelligrated, we’re committed to helping our customers make the digital transformation, and we sincerely hope you enjoy our first On The Move publication
 

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