Is Your Inventory System Ready for the Upcoming Warehouse Construction Boom?

January 19th 2021 16:00:00 PM

We all know 2020 was a tough year for many business owners and their employees. Some sectors, such as e-commerce, saw growth, while others had to respond to changes. COVID-19 dominated the headlines and many of our thoughts as we took necessary steps to keep ourselves and our loved ones safe. As we step into 2021 there are some positive signs of economic recovery, particularly in the warehouse industry.

More industrial space is predicted to become available. The new designs are more likely to consider the needs of their occupants than previous incarnations. Given these exciting changes, it is the perfect time to consider whether your existing inventory system is ready for a move to a larger, more human-centric space. 

Have you been considering an update to your existing inventory system? Are you ready to take action now? Take the next step now by contacting us online or call (330) 645-9959 to arrange a consultation with a Scanco Solutions Expert. 

Third Quarter Retail E-commerce Sales Results in 2020 

The following statistics were provided by the Census Bureau of the Department of Commerce (“Census Bureau”).

• The total estimated retail e-commerce sales for the third quarter of 2020 were $209.5 billion. (This figure was adjusted for seasonal variation, but not for price changes). It represents a slight decrease (one percent) from sales in the second quarter of 2020.
• Total estimated retail sales for the same period were $1,468.9 billion. The number was up 12% from retail sales recorded in the second quarter of 2020.
• E-commerce sales in the third quarter of 2020 made up 14.3% of total sales. 

The Census Bureau also provided non-adjusted figures.

• On this basis, estimated US retail e-commerce sales for the third quarter of 2020 were $199.4 billion. This number represented a slight decline of 0.6% from the previous quarter.
• In the third quarter of 2020, estimated e-commerce sales grew by 37.1% compared to the same period the previous year. Total retail sales jumped 6.9% during the same period.
• Focusing solely on e-commerce, sales in the third quarter made up 13.5% of total sales. 

E-commerce Drives Demand for Warehouse Space 

Jones Lang LaSalle (JLL), the global leader in real estate services, predicts demand for industrial real estate in the US will grow by over one billion square feet by 2025. The continued consumer demand for online shopping forms the basis for this surge in demand for manufacturing plants, warehouses, and distribution centers. 

Jones Lang LaSalle’s Craig Meyer points out that e-commerce still has a “long runway for growth.” The COVID-19 pandemic and resulting advice to stay at home unless necessary have accelerated online shopping rates. Digital Commerce 360 reports that US e-commerce sales reached $602 billion for 2019. JLL expects this figure to rise by up to 20% in 2020. The company projects that sales could be as high as $1.5 trillion by 2025. 

JLL Real Estate Perspective Report 

According to JLL’s Global Real Estate Perspective report, the final quarter of the year usually sees a boost in leasing, as companies rush to get deals signed before the end of the calendar year. This year is expected to have some pickup, but not to the same extent as previous years. 

In the US, 17% of floor space leased in the third quarter was attributed to e-commerce companies. Rental levels in the logistics sector remained stable across all regions. 

The report goes on to state that the fast growth of e-commerce and the resulting demand for last-mile (urban) warehouses to ensure quick deliveries is not a fad. Instead, this is a trend that will continue over the long term. 

Human-Centric Design Important for Warehouses and Distribution Centers 

The booming e-commerce industry has also changed the way warehouses and distribution centers are designed. Palletized shipments are less common, and team members are being asked to pick smaller, individual orders that need to be sent out quickly. Customers now expect to receive their items within a couple days (or less), which means a more labor-intensive process. 

Warehouse and distribution center managers are still contending with challenges of attracting and retaining quality workers. Traditionally, this type of work is seen as dark, dirty, and physically exhausting. That is not the case in modern facilities.

• Better lighting is being incorporated into warehouse and distribution center designs through the use of skylights and additional windows. Employees are less likely to have to strain their eyes to read barcodes or order labels when picking products.
• Better air circulation and ventilation through efficient HVAC systems and fans mounted on warehouse equipment improve employees’ working environment.
• Modern material handling systems reduce the amount of bending and lifting needed to fill orders. Stress levels on the human body are reduced while preserving (and even increasing) productivity. 

Upgrade your Inventory System Before Moving to New Industrial Space 

The news that more industrial space is going to be available to expand your business is something positive to start the new year off right. If you have been trying to do more with a limited amount of space, now is the time to start planning for access to more square footage by taking a good look at your inventory system. By upgrading your software now, you will have all the advantages of mobile automation warehouse technology in place before you take on the challenge of adding another facility or moving your entire operation.

Scanco Warehouse integrates seamlessly into Sage 100 and runs on iOS and Android devices. It has the distinction of being the most advanced and trusted technology available on today’s market for Sage 100 customers. This option will allow you to take control of your inventory system right out of the box.

Your team will not be held up by lengthy training sessions; Scanco Warehouse is very user friendly. They can be using the software within minutes. Some of the automated warehouse transactions your team will be performing include:

• Item inquiries
• Inventory receipts
• Inventory transfers
• Order picking – Directed pick
• Voice prompts
• Bin-to-bin moves (instant)
• Physical Count by item
• Shipping – Invoice data entry 

Scanco Enterprise is your one-stop WMS solution for all your warehouse inventory management needs. It helps you track and sync your inventory quickly. Enterprise also integrates with the Sage 100/100 software you are already familiar with. This software option allows your team to perform advanced scanning, single order picking, directed picking by bin location, and invoice picking. 

The peer-to-peer messaging feature allows team members to communicate and boosts productivity by collaborating while on the warehouse or distribution center floor. It also makes notifying team members about where they should concentrate throughout the workday more efficient. 

Many of us were not sorry to wave goodbye to the year 2020. It had many stresses and challenges that no one wants to see repeated. The year 2021 is already shaping up with some positive signs to look forward to. 

If you are thinking of expanding your industrial space in the upcoming warehouse construction boom, be sure your inventory system is ready for the larger facility before the move. Then your business will be in the best possible shape to take advantage of the bigger, better space and you can focus on growing your company. Contact us online or call (330) 645-9959 to set up a consultation with a Scanco Solutions Expert.