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How is Covid-19 affecting warehousing?


The Covid-19 pandemic has had a significant and lasting impact on many areas of industry, not least warehousing.

While some of these changes are temporary, others are likely to have a long-term effect.

A year on since the first UK nationwide lockdown, we explore how the pandemic has affected warehousing.

Social distancing

Over the past 12 months, social distancing has been essential in all warehouses and adaptations have had to be made to keep the workforce safe and to comply with the relevant regulations.

Even when the pandemic is over, we will expect social distancing to continue, at least to a certain degree. That means warehouses will need to ensure that traffic follows a one-way system, designated working areas are laid out, and sanitising stations are provided. This will not only help to avoid any future pandemics, but it will also ensure the health and safety of the workforce and reduce the risk of other illnesses such as colds and flu.

Warehouse automation

Warehouse automation has been increasing over recent years but, as with many industries, the Covid-19 pandemic has fast-tracked the process. Moving forward, we expect to see warehouses incorporate automation within their operations. With financial support available coupled with a low cost of borrowing, it’s a great time for organisations to invest in warehouse automation technology.

Higher inventory levels

Before the pandemic, many companies were shifting towards lean manufacturing, receiving the majority of their goods just in time in a conscious move to keep costs down and optimise warehouse space.

However, over the past 12 months, this approach meant that many manufacturers were left without enough inventory, leading to shortages and delays, and even halted production.

As a result, we anticipate a shift in approach to inventory. Although lean manufacturing will likely remain best practice, it will be supplemented with increased levels of buffer stock. Warehouses will need to review their available space to accommodate this additional stock.

Greater reliance on 3PL

Post-Covid, manufacturers and retailers may view large numbers of permanent staff on their payroll as a liability. As a result, manufacturers will be looking to decentralise their warehouse locations, and third-party logistics providers (3PLs) will play an even more crucial role.

3PLs can manage large workforces and often have multiple warehouse facilities to support decentralisation.

Short term contracts

If the past year has shown us anything, it’s that the future is unpredictable. As a result, it’s only natural that manufacturers will seek shorter contracts when leasing, sharing, or renting warehouse space, so that they are better able to respond to change. Contracts for warehouse space and 3PL partnerships may predictably reduce to an average of 1-2 years rather than the 3-5 years or even longer that we’re used to seeing.

Growth of E-Commerce

E-Commerce has been gaining dominance for several years now, but the Covid-19 pandemic has accelerated the process. And, to cope with a rapid increase in demand, warehouses need to keep up. At Optima, we provide powerful warehouse management solutions that will support your warehouse as it adapts to a post-pandemic world. To find out more, please get in touch.