AS traditional retailers have developed more robust online sales strategies and people have become more accepting of e-commerce in South Africa, we have seen significant growth in this space. This growth will only continue in the years to come, and the warehousing element of the logistics chain needs to support the shift. There has already been a significant expansion of industrial areas to offer greater warehousing facilities, especially close to airports and major transport routes.
However, the physical storage space of the warehouse is only one element. Managing the people element, especially given limitations on the number of staff permitted due to social distancing requirements, has become a real challenge. Furthermore, warehousing businesses face the challenge of sourcing trained and qualified staff due to occurrences of illness and isolation, brought on by Covid-19. Ensuring levels of output are met while balancing costs, requires an intelligent approach. This growth does, however, come with certain challenges, such as effectively managing warehouse storage space and human capital. The management of human resources is further exacerbated by making necessary considerations for Covid-19 regulations, such as social distancing.
Optimisation is the key
There is a physical limitation on the amount of work people can do, and increasing headcount is typically the first step in increasing output. For an increase or decrease in headcount to be effective, productivity and performance needs to be at a level of at least 95%. Therefore, improving productivity is the first step that any warehousing provider should take – and this includes training, process optimisation and warehouse capacity utilisation.
If warehouses are too small, and there is too much stock on hand, work areas will be congested. On the other hand, if there is not enough stock, then warehouses will not be able to fulfil orders. Both scenarios result in lost revenue. The key is to maximise volume over minimal time. Having a BPO (business process outsourcing) partner not only ensures that processes are streamlined, but also that staff are trained to the level required to be highly productive. On top of this, should additional resources be required, the BPO provider will assist by scaling their workforce up or down as demand necessitates.
Collaborative partnerships
To meet the drastic increase in volumes required today and, in the future, expansion needs to happen rapidly. Transparency and effective planning are critical – this is not a short-term fix, but a long-term view of where the industry is going and how it can be adapted. The more organised and well-run the warehousing provider, the greater their likelihood of survival, because agility to rapid market changes has become a hallmark of success. When BPO providers collaborate with warehousing and logistics suppliers and communicate effectively, the entire process can be strategically planned and executed for maximum mutual benefit.
