A scarcity of shipping containers has caused major congestion in the U.S. ports of Los Angeles and Long Beach in California. Many importers are running into the same issues—a lack of warehouse space to store the incoming freight. Insufficient storage capacity prevents businesses from fulfilling orders through an already congested supply chain.
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Warehousing Crisis Cripples Supply Chain
A scarcity of shipping containers has caused major congestion in the U.S. ports of Los Angeles and Long Beach in California. Many importers are running into the same issues—a lack of warehouse space to store the incoming freight. Insufficient storage capacity prevents businesses from fulfilling orders through an already congested supply chain. This trend is expected to worsen in the coming month because of mass incoming orders due to the holiday season. Supply chain executives have started opting for alternatives to get around this issue, such as adding temporary storage trailers adjacent to warehouses, acquiring storage space in states that neighbor California, and even diverting inbound freight to East Coast ports. Warehousing companies have also been building as fast as they can. It has been the one type of commercial construction that has been booming throughout the pandemic. Unsurprisingly, these efforts haven’t been enough to make up for inadequate storage space and a lack of warehouse workers to pick and store these items.
Inventory Management Changes Heightens Complications
Warehouses went into the pandemic already busy, with most of the warehousing space having already been taken. As the pandemic has matured, closures occurred at factories, ports, and distribution hubs. Consumers briefly cut back on shopping, and this caused orders in warehouses to pile up. As the pandemic has slowed, the economy started recovering, and order volume began going up; a pent-up rush of goods arrived. Shoppers have been spending at record levels, diverting all the money they saved by not traveling to work or to buy things. Pre-pandemic, e-commerce had grown empirically by 10% to 15%. Last year, e-commerce jumped to over 40% and has only kept growing throughout 2021. Retailers responded to the surge in demand by increasing imports to record levels.
The ongoing global supply chain disruption has also impacted inventory-keeping processes for companies. Issues about rising risks of the Just-In-Time (JIT) model have been raised. A JIT inventory model is a management strategy where a company receives goods as close as possible to when they are needed, requiring no or minimal inventory. Lean inventories kept by companies that have adopted the JIT model to limit costs have largely contributed to the ongoing disruptions. Companies are now moving away from this inventory model. Major retailers are currently maintaining inventory levels at warehouses due to shortages and the expected peak for goods during the holiday season. The need for storage space to hold inventory in order to weather the storm of demand fluctuations has led to companies’ desiring more storage space.
Indoor Tracking a Possible Solution
To overcome such storage issues, there is a growing demand for warehouse workflows to be efficient and to iron out any bottlenecks in order to utilize warehouse space as effectively as possible. Solutions that provide granular-level indoor traceability are the need of the moment. Location intelligence solutions can be leveraged by warehouse managers to enhance warehousing operations in order to allow a smoother workflow that can help accommodate a larger volume of incoming loads. Location intelligence is the method of deriving insights from geospatial data to solve business problems or to enhance operations. It involves layering multiple data sets, spatially or chronologically. Location intelligence can combine location-based data with advanced analytics to uncover new opportunities that were previously hidden. Location intelligence would leverage indoor positioning for better results. Indoor positioning is a system of devices used to locate people or objects in places where satellite technologies lack precision. Certain strategic techniques and devices are used to deliver indoor positioning, ranging from reconfigured devices already in use (such as smartphones), Wi-Fi and Bluetooth beacons, and digital cameras. Indoor positioning technology allows users to accurately pinpoint the location of people or assets inside a building using personal digital assistants, mobile devices, tracking tags, or other devices. This opens an abundance of opportunities to enhance warehousing and logistics operations. Solution providers like HERE Technologies, Cloudleaf, and Kinetica have been able to provide warehouse operators with the ability to conduct geospatial operations more quickly, to dynamically generate and infer interactive maps, to solve complex problems with graph analytics, and to combine location intelligence into other operational analytics to augment warehousing operations. As a result, there have been several use cases of improved asset utilization and better supply-chain planning that has led to shorter delivery times and enhanced customer experiences.
Crowded warehouses can cause many complications. Complex processes on the warehouse floor can lead to misinterpretation and incorrect process implementation, causing workflow issues that result in delays or stoppages. A busy floor with workers, robots, and forklifts operating simultaneously can aggravate a lot of processes and lead to mass operational inefficiencies. Warehouse workflow congestion can also result in workplace safety concerns, such as collisions and other accidents. Location intelligence can help streamline and simplify warehouse workflow and layout. As such, it can dynamically organize inventory storage, helping the warehouse to accommodate more load than it traditionally could. Location intelligence can also enhance workplace safety by enabling contactless entry sensors that can gather and transmit data to allow managers to continuously track assets and employees. This can help to identify if employees stop moving for some time, for example, because of injuries. Contactless entry technologies have also been of great help during the pandemic where limited human interaction can stop the spread of COVID-19. Managers can deploy solutions that allow end-to-end features—such as personal protective equipment detection, thermal image processing, and facial recognition—that are connected to cloud-based analytics that give managers a “control tower view” of workers’ whereabouts. Location intelligence also allows hyper decision making—ideal for deploying rapid fulfillment, enabling lean inventories, and providing an extra dimension of quality assurance to ensure customer satisfaction. Even though the issue of inadequate storage space seems to be a sustained issue that requires massive infrastructural changes, indoor traceability solutions have the potential to address these issues in the short run.