Don’t forget inventory when kick-starting plans

Even though we’re rolling into 2024 on some positive economic vibes, 2023—a year many couldn’t wait to see end—didn’t really slow Modern readers down in terms of innovation and investment.

As our “2023 Warehouse Operations & Trends Survey” found, even though operations faced numerous challenges, we only saw a slight decrease in average capital expenditure budgets for equipment and technology over 2022.

So, as more positive economic news spreads, I’m going to suggest readers get back to fine-tuning that list of operational needs. And, if you’re in need of an extra push to make travel arrangements to Atlanta to attend Modex 2024 to jump start planning, this month’s issue should serve as a source of inspiration.

If you want a snapshot of what the e-commerce DC of the future is going to look like, read executive editor Bob Trebilcock’s System Report (page 18). He says the new GEODIS facility in Asheville, Ohio, is an example of where the retail supply chain is headed.

“It’s an omni-channel facility designed to replenish stores and fill direct-to-consumer orders from one inventory, and it uses next generation automation, like the new AutoStore bots, piece-picking robots and automatic packaging to significantly reduce touches,” says Trebilcock. “It’s a great illustration of how many of the tools in the automation toolkit might come together to minimize touches as product flows through a building—all while making the best and most productive use of humans.”

And while the pandemic period was a great accelerator for automation implementation to keep pace with growing demands and lack of labor, it also showed that inventory management needs to move up the ladder of importance if we’re to improve our overall resiliency. Senior editor Roberto Michel explores the continued challenges and practical technology solutions for improved inventory on page 32.

“Look back four years ago, and you see the wild pendulum swings first hand,” says Michel. “At first it was hard to get inventory, so many organizations bought what they could to prevent stock outs. Then the old-school ‘just-in-case’ approach helped meet surging e-commerce demand, but led to excess goods.”

According to Michel, a recent survey of supply chain practitioners from 3PL Kenco revealed “that managing inventory levels ranked as the leading issue of focus in prepping for the 2023 peak holiday season, ahead of customer dissatisfaction and finding suitable seasonal staff.” In another report, management consulting firm Kearney estimated excess inventory in the electronics industry alone is a $250 billion problem.

“We’ve learned inventory gluts aren’t just a procurement issue,” says Michel. “It’s felt at the DC level, too.” Our “2023 Warehouse Operations & Trends Survey” found a 9% increase over 2022 in respondents saying they want to increase inventory turns.

“My sources stress that it isn’t just tracking goods, but optimizing how much to hold and where to balance costs with service levels for consumers and B2B customers who demand rapid, accurate fulfillment,“ Michel says. “And that’s where technology needs to play a bigger role.”