It may be hard to believe - but the holiday season is right around the corner! What is typically one of the largest peak seasons of the year for the material handling industry is now even more heightened, with some supply chains still trying to catch up from the increased demands resulting from the COVID-19 pandemic.
According to a recent study, 2020's holiday season is expected to start earlier and last longer than usual, as retailers attempt to disperse consumer demand and prevent straining their supply chains.
By now, those in the material handling industry understand that the effects of COVID-19 aren’t going away anytime soon. What began unexpectedly in March has continued to impact the supply chain with no clear end in sight, becoming one of the most significant disruptions that the global supply chain has ever faced.
At HAWKER®, we’ve been monitoring the material handling industry while adjusting our practices to supply our customers with top-of-the-line products, all while keeping our employees safe. As material handling companies prepare for another wave of demand with the holiday season approaching, we need to keep our supply chains productive, profitable, and efficient.
First, it’s important to note that COVID-19 has impacted every aspect of the material handling industry - from manufacturing to delivery. Many companies have had to dramatically change how they do things, as well as adapt their service offerings on each spectrum of the supply chain.
While supply chains were previously slow to integrate digitization, material handling companies are now recognizing the urgent need for digitization. The necessity of supply chains being flexible despite disruptions has accelerated digital supply chain technology in the workplace, such as AI and robotics.
Supply chains must continue to innovate and recreate industry best practices as demand continues to increase in the coming months. As we enter the peak season, we need creative solutions for fulfillment centers, order management techniques, contact-less delivery options, and more. Overall, material handling companies must leverage unique strategies and advanced technology to manage consumer expectations and keep the distribution channel and products on time.
While e-commerce was already on the rise, it has only continued to increase as COVID-19 has swept across the world. More and more consumers began ordering goods online, such as essential items and groceries. Those numbers will swiftly increase again, as consumers plan to shop for holiday gifts.
This year, sixty percent of consumers do not plan to shop in-store this holiday season due to concern of COVID-19 exposure. This move from brick and mortar stores to online shopping affects not only supply chains, but also the retail business sector as a whole. For the material handling industry, this shift will necessitate careful preparation so that companies can plan how to manage inventory while controlling shipping and delivery costs.
While online ordering demand has risen, there is something that has declined - consumer expectations for delivery time. In 2018, over a third of consumers expected to receive packages in two days or less. According to a 2020 study, up to fifty percent of consumers now believe that five days for delivery is reasonable. With this fact in mind, supply chains have some flexibility to focus on their operations (with recent COVID-19 safety precautions) and manage the influx of orders during the holiday season without pressure for a 2-day delivery timeline.
Many supply chains are still trying to keep their head above water and figure out which problems they need to solve first. However, the effects of COVID-19 on the material handling industry are not just bringing in a passing trend, but ushering in a new normal that is likely to stay.
While companies in the material handling industry need to make responsive, adaptive solutions to meet current demands, they also need to be actively considering proactive long-term solutions.
Currently, material handling companies must leverage a flexible supply chain as a strategic asset. Supply chain digitization, omnichannel fulfillment strategies, and nearshoring are all long-term approaches that companies are pursuing to strengthen their supply chains. Additionally, companies are creating a more regional approach and diversifying suppliers to increase their ability to react quickly and positively to unexpected disruptions.
Ultimately, the 2020 holiday season and beyond are difficult to predict using historical data in light of COVID-19. With increased consumer demand and long-lasting effects from the pandemic, the material handling industry will remain consistent as long as it strengthens and adapts its supply chains to be flexible, powerful, and reliable.
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