This Month in Modern: Take a fresh look at the world around you

While Modern readers are feeling the strains that the astonishing growth of e-commerce have placed on operations, a summary of statistics recently shared with me by Ian Hobkirk, founder and managing director of Commonwealth Supply Chain Advisors, put that explosiveness into context.

“As a percentage of total retail sales, e-commerce has been taking about 1 to 1.5 percentage points a year away from brick-and-mortar sales pretty steadily for the last five years,” says Hobkirk. “In 2020, e-commerce market share grew by 4% in the second quarter. That means that when the pandemic first hit, we saw the equivalent of more than three years of natural e-commerce growth in just a month or two.”

I keep thinking the residual effects of this intense progression will be nothing but positive, as we continue to hear about warehouse and DC operations taking a fresh look at the world around them and pushing innovation forward.

This month in Modern, we offer stories that challenge us to refresh our understanding of operations, software and processes. This month’s System Report is an operation that threw open the windows for a breath of fresh air as a result of the e-commerce boom.

Allied Electronics & Automation, a leading omni-channel distributor of electronic parts and automation controls based in Forth Worth, Texas, was fulfilling all of its North American orders from an existing 300,000-square-foot facility that went live in 2007. As executive editor Bob Trebilcock reports, the facility featured some automation, but the company knew its equipment and processes wouldn’t be able to keep up with the company’s bold growth plans.

“Today Allied does about 40% of its business through their e-commerce channel, but the team sees that growing to over 60% in the next four years,” says Trebilcock. “They also have ambitious plans to more than double the number of SKUs stocked in the facility, so they went about an ambitious refresh plan to meet those goals.”

Allied added more than 200,000 square feet to the existing building and implemented a variety of automated materials handling systems to improve overall operations and become more labor efficient. “To me, this story is refreshing for two reasons,” says Trebilcock. “First, rather than abandon an existing facility and starting from scratch, they took what was already there and improved upon it.” The second, says Trebilcock, is the company’s full embrace of automation. “It’s their heritage, since they sell the parts, components and products that are the backbone of automated systems,” he says.

Senior editor Roberto Michel dares us to refresh our understanding of enterprise resource planning (ERP), especially for the small to medium-sized business (SMB). As he reports, for far too long, ERP has been referred to as “back office” software.

“But for many companies, especially SMBs, ERP is how they get things done on the frontlines—and that’s much more than ‘back office,’” says Michel. “One SMB user I talked to was able to use a warehouse picking and packing app from its ERP vendor and run it on low-cost Android devices to keep pace in their warehouse without adding headcount—even in the face of rapid growth. And that’s anything but boring.”