2020 Operations Survey: Accentuate the positive

It’s November already, so take heart…we’ve almost made it through what will go down as the most trying year in modern history. And while that’s how most of us may be feeling right now, keep in mind there are quite a few “silver linings” to be cautiously celebrated as we turn the page on 2020 and open up a new chapter that’s projected to feature a steady recovery.

For example, the ports of Los Angeles and Long Beach just posted their best quarterly volumes on record in terms containers hitting U.S. shores. Containers are stacked up, truck volumes have escalated, and the nation is ready for a wave of inventory replenishment.

That translates into more SKUs hitting more DCs as more e-commerce orders bombard operations—and I say bring it on. After growing by 30% during the first half of the year, compared to the same period in 2019, e-commerce sales currently make up about 16% of all U.S. retail sales, up from roughly 12% during the first quarter of the year, according to the U.S. Department of Commerce.

With this data as a backdrop, a common theme that will run through our reporting in the next year is that staggering adversity followed by an unprecedented rebound can push us to make strategic changes for the better.

This month in Modern, we offer even more data that suggests that the pandemic is leaving some silver linings in its wake. “We’ve been monitoring the rapid pace of change driven by e-commerce on our warehousing/DC operations for several years, but the pandemic has kicked it into overdrive,” says senior editor Roberto Michel, who puts our “Annual Warehouse and DC Operations Center Survey” into context on page 50.

When we asked about e-commerce growth since the pandemic began, 10% of respondents say it has grown their e-commerce channel by 60% or more, and a combined 34% say e-commerce has grown by 30% or greater since the beginning.

“And from this reality, our findings tell us operations are taking positive steps by using more technology, moving away from paper-based processes, and putting more emphasis on process improvement and fine-tuning inventory—all areas that have been on the to-do list for many years and are now being accelerated,” adds Michel.

According to Don Derewecki, a senior consultant with St. Onge and our partner for the survey, the pandemic’s impact on changes in DC operations process requirements was sudden and will continue to be significant for the foreseeable future. “The shift in e-commerce volumes and customer demands created a near wartime-level sense of urgency for changes in many operations—changes that will only better service customers in the end,” Derewecki adds.

Let’s not forget the changes being made where the workforce is concerned. “One of the most positive outcomes is the heightened importance placed on the health and safety of workers,” says Norm Saenz, a managing director with St. Onge. “The majority of operations are planning to maintain the sanitation and health practices as a result of the pandemic, and this will help sustain a healthy workforce ongoing through flu season and all year long.”