As we enter a new year following repeated shocks to global supply chains, analysts are listing the supply chain trends they expect to dominate the near future of industry. Many of these trends are focused on the promise of artificial intelligence and other digital technologies — blockchain, robotic process automation, growing data visibility.
Other experts (including a few at the New York Times) point to a deeper change. They’re challenging the decades-old procurement status quo — just-in-time systems and lean inventories — which stumbled when faced with pandemic-related disruptions. By late 2020, some 37% of manufacturers, retailers, consumer brands, and life science operators said they planned to abandon just-in-time sourcing as long as they could control costs. Shockingly, an additional 34% said they were moving away from just in time even if that means “significantly higher costs,” according to research from Capgemini.
This broad movement away from just-in-time strategies will have a significant impact on material handling professionals from manufacturing plants to distribution centers to frontline retailers. That’s why, rather than focusing on broader supply chain trends for 2022, we want to take a close look at material handling trends in specific. After all, without material handling, supplies can’t move along the chain. We could be poised for serious shifts in operation as 2022 unfolds. Here are the material handling trends — an important subset of supply chain trends — we’ll be keeping an eye on this year:
1. Inventory levels at manufacturing plants and local distribution centers may rise.
The alternative to lean inventory is, of course, more parts and products on the shelf locally. That could require additional capacity in existing warehouses — or even the construction of new facilities. More micro warehousing facilities will come online, allowing 3PLs and their customers to keep inventory close to its destination point, and further decentralizing inventory systems. From a material handling perspective, these developments will require operators to get more value out of every square foot.
There are a few ways to free more space in an existing facility. Electric forklift users can save considerable square footage by moving to vertical battery storage, as in a Quad Stack Operator Aboard Battery Extractor System. This battery room infrastructure is ideal for facilities with more than 300 batteries, with four levels of storage to reduce overall footprint. Operator Aboard Battery Extractors complete battery change-outs in just a few minutes, keeping lift trucks moving efficiently, and they include Industrial Internet of Things (IIoT) systems to track operational data for continual improvement.
Also consider the storage footprint of material handling equipment. Even with more inventory on the shelves, demand will fluctuate; you may need more or fewer material handling tools depending on the season. An Industrial Trailer provides flexible material handling, functioning both as a tugger cart and as a manual order picking cart. And the Order Picking Platform – Knock Down Flat gives staff access to high shelves by attaching to an order picker truck. Between uses, these units collapse, and are stackable up to six high. That gives operations both flexibility for higher-throughput seasons and low-footprint storage.
2. Automated material handling technologies will work hand-in-hand with existing staff.
Warehouse automation has been on new-year lists of supply chain trends for more than a decade, but fully automated warehouses are vanishingly rare. As of 2019, even Amazon, which has invested heavily in material handling technology, considered full warehouse automation to be at least a decade away. Simply put, full automation isn’t the play for most warehouse operators.
What has been helpful is partial automation, the collaboration between automated material handling tools and human employees. As we’ve discussed in previous articles, semi-automated warehouses can help staff improve throughput without extra work. That technology could be anything from an automated conveyor line to automated guided vehicles (AGVs) to robotic palletizers — but as you seek to move more materials locally, these investments may start to provide more attractive RoIs. It’s likely that 2022 will see considerable new spending on automated material handling tools and the support equipment that goes with them (like Warehouse Trailers that expand capacity for AGVs).
3. Workplace safety will be a core part of successful hiring and staff retention.
The second half of 2021 saw the rise of the “Great Resignation,” with quit rates reaching 3 percent in September — the highest number since at least 2000, the last year provided by Federal Reserve Economic Data records. Employers will look for solutions in 2022, but one of the key suggestions — allowing remote work — doesn’t apply to material handling occupations. Higher wages may help, but so will working conditions — and as of 2018, laborers and freight, stock, and material movers had the highest rates of musculoskeletal disorders of any occupation in the U.S.
No one wants to work in a job that might lead to injury. To attract new workers and keep the ones you have, invest in workplace safety programs, including a strong ergonomic component. Ergonomic material handling equipment — from Lift Tables to Stock Picking Carts and more — removes the strain from vital day-to-day operations, reducing the risk of injury. That can help with hiring and retention in a tough labor environment.
4. System integration between material handling equipment and data management systems will help meet new customer demands, such as end-to-end visibility.
Customers are demanding new visibility into everything, from inventory to order status to the physical location of parts and products. Tracking and sharing all that data can be labor-intensive, and IIoT systems can help. In 2022, look into IIoT-capable material handling equipment that collects data while handling inventory.
For instance, in the electrical wholesaling industry, IIoT-enabled Spool Winding Trolleys count cable foot-length while paying it out onto shipping reels. Managers can log into an IIoT Portal to assign specific orders to specific workstations, and the system will track the data for sharing with both in-house stakeholders and customers. That’s just one example of connecting material handling equipment with data platforms to improve visibility. Learn more about IIoT products from BHS here.
5. Don’t count on new federal funding for supply chain projects just yet — but do follow the Infrastructure Investment and Jobs Act roll-out.
At the end of last year, the U.S. President signed the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), promising generational investment in roads, rail, bridges, and broadband. These investments could provide benefits to supply chain operators in the form of grants and formula funding. But most of these programs won’t move quickly, and funds may not reach your community this year.
Federal agencies from the Department of Transportation (DOT) to the Environmental Protection Agency (EPA) have to set up new programs. State and local agencies have to expand capacity, too. The last big federal investment in infrastructure came with the American Recovery and Reinvestment Act (ARRA) of 2009. According to Brookings, the DOT had only spent 9% of its ARRA funding for road improvements six months after the bill passed. After 18 months, DOT had only spent about half of the funding.
If that’s any indication, the new infrastructure funding could be slow to arrive. But while we may not see the IIJA impacting every local market in 2022, pay attention to state and local agencies to see how they plan to handle federal funds associated with the bill. They’re the ones who’ll hold many of the purse strings that may impact material handling operations.
Other material handling and supply chain trends will develop throughout the year. To learn more about how material handling equipment from BHS can help you thrive amid fast-changing conditions, contact our Sales Team at 1.800.BHS.9500.