The supply chain management sector is facing numerous skilled labor shortages due to the ever-increasing demands of the pandemic. Meeting these challenges isn’t a viable option for businesses that are afraid of making changes. However, these growing demands provide an excellent opportunity for an increase in the use of supply chain automation technology.
These demands are also expected to increase within the next five years, as investing in supply chain technology is important for logistic companies. According to a recent Prologis Research report, supply chain management software can play a key role in improving productivity, increasing operational capabilities, and open up a variety of new locations.
What Is Supply Chain Automation?
Supply chain automation uses technology to automate complex workflows to maximize productivity and gain a competitive edge. Investing in supply chain management software enables companies to streamline their operations and better meet the needs of their consumer base. Keeping up with these ever-evolving technologies allows businesses to remain on the cutting edge of supply chain management.
Pandemic and Related Supply Chain Risks
Supply chain management has never been more difficult due to the pandemic. Fewer people are working due to COVID-19, which adds greater stress on labor availability. Businesses must now focus on supply chain gap analysis to expand their capabilities and reduce the need for labor-intensive operations. E-commerce sites are especially focusing on using more technology in supply chain management due to the pandemic-driven surge in demand.
Supply Chain Management Software and Technology
A focus on supply chain automation allows more businesses to expand into new locations. Growth is especially rapid for mobile and modular technology that can meet the demands of evolving supply chains. Companies that are failing to implement supply chain management software are quickly being left behind, as more businesses use automation to make up for the lack of skilled labor and well-located space.
Online sales will most likely grow from 15 percent to 25 percent for retail goods, which will result in nearly 100 million square feet of additional demand per year for e-commerce businesses. Other factors will also influence supply chain inventories, as more companies will focus on adding to their existing inventory. These changes can potentially add between 57 million square feet to 114 million square feet of demand each year for the upcoming five years. The pandemic will also increase demands for vaccine distribution facilities and medical equipment.
Technology in supply chain management will play a vital role in meeting these ever-increasing number of demands for businesses to remain competitive. Automation will allow many companies to stay ahead of these challenges, but it’s unlikely to impact logistics for the real estate industry due to the demand greatly outweighing supply.
Supply chain automation will improve the efficiency of existing operations, which will help to accommodate growth and increase service levels. Investing in supply chain management software will also increase the value of modern facilities and will most likely result in businesses signing longer leases.
Overcoming the various challenges of the pandemic isn’t an easy task, but the use of supply chain management software can play a key role in the long-term success of businesses.