At the close of 2011 we note that the world is changing in many different ways. To the extent this change is predictable, distribution center managers can anticipate and develop effective responses to these strategic challenges that will enable their operations to continue profitably serving their customers. As an example of predictable change we can cite demographic stats that show populations in most developed countries are growing and skewing older as people take actions to support living longer, healthier lives. Those who remember Mary Tyler Moore in prime time can recall a time when heavy smoking, drinking and unhealthy eating were fairly commonplace. Outside of the Frat House, that world has all but vanished.
More consumers are buying goods and services from trusted firms that demonstrate shared values such as environmental stewardship or social responsibility. As regions grow in affluence, the diet is also changing. According to the USDA Economic Research Service, global consumer spending in most foreign markets indicate that spending for staples such as wheat and rice is on the decline as spending grows on higher valued food items such as meat, dairy, fruits and vegetables.
To retain value, fresh food will need to move more rapidly from farm to fork. To ensure health and security, shipments will need to be traceable. Order errors and damaged goods must be eradicated. To extend the distance a driver can travel, trucks will need to be unloaded and loaded rapidly. Delays will incur penalties. The only other way to ensure food nutrition is uncompromised is through refrigeration and freezing. Steps must be made to make sure energy is used as efficiently as possible. Automated Storage and Retrieval Systems can use 70% less energy compared against manual operations using humans and forklift trucks. According to a recent presentation at CSCMP, the installation of LEDs to illuminate freezers yielded a 22% ROI for Walmart Canada.
It all stands to reason that investments to adopt automated order fulfillment systems or improvement to existing automated systems are superior because they can reduce operating costs as they improve the delivery of value to customers. This also enables firms to show measurable results, for example, reducing energy consumption which can help enhance the perception of value among consumers who purchase your goods.