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Five key drivers for agile
As the coronavirus creates turmoil in our daily lives, businesses are moving quickly to
respond to a radical shift in consumer behaviour. A boom in online orders, likely to become
a feature of the 'new reality', is triggering a major re-think of the fulfilment operation. Frazer
Watson identifies five key factors influencing the drive for agile fulfilment
THERE ARE several
significant impacts of the
coronavirus crisis that are
likely to change the way
warehousing and fulfilment
are performed in the future. A
transformation of the fulfilment centre
may have already been underway
before COVID-19, but the virus has
added urgency and accelerated the
pace of change.
Under the lockdown there was an
unprecedented boom in online sales.
According to the latest figures from the
Office for National Statistics (ONS),
some 33% of all UK retail transactions
took place online during May –
significantly up on March’s record figure
of 22.4%. Indeed, it equates to an
increase of around 50% over the two-month
What’s more, the trend is expected to
continue as consumers move to
buying more items online and more
people take to working from home.
Clearly, retail businesses are facing a
seismic shift in online sales and will
need to boost the capacity of their
fulfilment operations quickly, if they are
to retain, or gain, market share.
Automation is likely to play a major part
in fulfilment, and this is highlighted in
the latest projected figures for the
warehouse automation market.
According to a report published in June
2020 by analysts Frost & Sullivan, the
global warehouse automation market is
expected to nearly double in size,
expanding from $14 billion in 2019 to
$27.2 billion by 2025.
However, with the greater uncertainty
in this ‘new normal’ over product
profiles and patterns of demand, much
higher levels of flexibility and agility will
be required within the fulfilment
process – and this will need to be
reflected in the technology deployed.
Interestingly, 25% of the estimated
figure in Frost & Sullivan’s report relates
to the Autonomous Mobile Robot
(AMR) market, which is expected to
reach $6.8 billion by 2025.
So, how can online businesses adapt
quickly and efficiently to the ‘new
normal’? Here are five factors that
should be considered when looking to
create greater agility in the fulfilment
1. Operational resilience and
responsiveness – Nothing could have
prepared the corporate world for the
shock of a global lockdown, but moving
forward there will be a desire to create
supply chains with greater resilience
and agility, and this will extend into the
Research carried out by International
Data Corporation (IDC) on behalf of
Kinaxis in May 2020 found that supply-chain
resilience and agility are the
biggest priorities for nearly half (48%) of
organisations over the next 12 months,
with the next top priority being
operational efficiency (46%).
Critically, organisations are uncertain
about the future demands on the
business and what changes may be
required within the fulfilment operation.
Will there be more promotional activity,
resulting in sharper peaks? Or could
there be longer, extended peak periods,
with a greater number of returns? Will
new forms of packaging be required?
Could product profiles shift, SKUs
radically expand – and how might new,
spontaneous marketing initiatives
impact operational processes?
There are many unknowns. So, if
e-commerce businesses are to
minimise risk and respond quickly to
change, greater operational agility will
be required to provide the
responsiveness that customers expect
– and the resilience logistics
practitioners are looking for.
Meeting such a significant rise in
demand for online orders will, for many
businesses, require automation. But,
any applied will have to be highly
flexible, readily scaleable and capable of
delivering the speed, accuracy and
performance demanded of a highly
responsive fulfilment operation.
2. Labour availability and social
distancing – The traditional, manual,
approach to order picking has, in recent
seismic shift in
and will need
to boost the