Impact of COVID-19 on Warehouses & DCs
The coronavirus pandemic has affected millions of people across the world, with major economic consequences for months and years to come. With each passing day, the impact of COVID-19 is being felt profoundly on the social, economic and political fronts.
Despite the extraordinary measures and concerted efforts of governments, companies and individuals to curb its development, the virus continues to spread uncontrolled across the globe, causing loss of life and impacting businesses across industries and verticals. Policies designed to deter further transmission of the virus, including travel bans and quarantines, have the unintended consequence of upsetting global supply chains, which in turn disrupt the availability of goods & services.
Given the steady increase in the world’s dependency on China over the last 20 years, the COVID-19 outbreak in Wuhan created devastating effects throughout most supply chains. Hyundai reported that it “decided to suspend its production lines from operating at its plants in Korea, due to disruptions in the supply of parts resulting from the coronavirus outbreak in China”. American retailer GAP said it is facing a “period of uncertainty regarding the potential impact on both supply chain and customer demand”. The Swedish giant, Volvo Group, too was forced to shut down production because of similar reasons.
Need for resilience
The pandemic has highlighted the need for complete prevention of such disruptions to the supply chain. It is indeed an ambitious goal, yet one that much be sought, since pandemics, wars and other high-impact events are bound to occur. The inventory operations at large, global businesses need to be resilient too, by building the ability to recover from unplanned lockdowns as soon as possible.
To bring resilience to the supply chain means to bring resilience to each of its elements – labor, capital, transportation infrastructure, regulatory policies, global relationships, and acts of God. Every element has its own KPIs and challenges when it comes to handling disruptions.
Need for automation
Labor is an (if not the most) important element of the supply chain operations. Warehouses employ a sizeable workforce for their daily operations – for shipping, receiving, stocktaking, quality control, and overall management.
In lockdown situations such as the current pandemic, warehouses using manual picking or inventory counting have no choice but to halt their operations, thus severely hitting their topline and bottom line. For example, 30 employees of an Amazon warehouse were recently tested positive for COVID-19. Further problems emerged over the week in the form of employee walk-outs at fulfillment centers in New York, Chicago and Detroit, with the staff seeking to shut down some Amazon facilities for thorough sanitisation.
To avoid such disruption, and enable 24x7x365 business operations that match the supply chain velocity, warehouse automation is inevitable. This is becoming evident in cutting-edge warehouse operations, in the form of automated robots and drones that provide a high level of resiliency, maintenance, and performance regardless of uncontrollable external factors such as a pandemic.
Warehouse automation has been synonymous with the use of robots for the indoor and outdoor transport of pallets, cartons, cases and other inventory. Automated storage and retrieval (AS/RS) systems and ‘cobots’ have also developed and deployed at large distribution and fulfillment centers, especially those that enable e-commerce.
3PL service providers must conduct stocktakes at a frequency mandated by their customers, while publicly listed companies must do them as required by auditors and regulators. Both these inventory operations have been hit by the shortage of staff due to mandated lockdowns.
Even in normal times, manual inventory counts can be erroneous, prone to safety incidents, and require expenditure on overtime, not to mention the possibility of pilferage. In the absence of cycle counting staff during lockdowns, manual inventory counts turn out to be even more problematic than usual.
Role of drones
Drones are finding their way into innovation-oriented warehouses for automated inventory counting, thereby reducing the reliance on the manual workforce. Apart from the cost & time savings achieved, and improved productivity, aerial inventory scans make warehouse operations far more resilient to disruptions such as the one we see today. Autonomous drone solutions for inventory also serve as excellent complements to automation technologies such as goods-to-person robots and automated fork-lifts.
While inventory counting has always been considered as a worthy target for automation, the COVID pandemic will force inventory managers and continuous improvement teams to accelerate enterprise-wide drone adoption.
Equipped with autonomous navigation, artificial intelligence, and computer vision techniques, inventory drones for stocktaking enable fully automated, faster, frequent, cheaper and safer inventory counts.
Remote deployment of inventory drones
FlytWare drones can operate fully autonomously and scan front-facing barcodes on one-deep full pallets or case stock, stored in racks. Aerial inventory scans can be done on weekends, at nights, and in-between shifts; this minimizing the impact of pick-and-put-away activities.
The rich inventory data collected by FlytWare can be seamlessly integrated with warehouse management systems. Video, image and barcode data can be transmitted, securely, over the cloud – enabling remote stakeholders to track warehouse inventory in near real time, even during pandemics.
- Coronavirus: Hyundai stops production in South Korea over shortage of parts – https://www.business-standard.com/article/automobile/coronavirus-hyundai-stops-production-in-south-korea-over-shortage-of-parts-120020400850_1.html
- Gap Inc pegs coronavirus losses at $100 million and counting – https://fortune.com/2020/03/13/gap-coronavirus-impact-lost-sales-covid-19/
- Truckmaker Volvo to temporarily halt production at plants in Gothenburg, Ghent – https://auto.economictimes.indiatimes.com/news/commercial-vehicle/mhcv/truckmaker-volvo-to-temparily-halt-production-at-plants-in-gothenburg-ghent/74677802
- Factbox: Coronavirus cases reported at 19 of Amazon’s U.S. warehouses – https://www.reuters.com/article/us-health-coronavirus-amazon-com-warehou/factbox-coronavirus-cases-reported-at-19-of-amazons-us-warehouses-idUSKBN21I0FA