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How to Strengthen Supply Chain Traffic When Everything Else is Lagging

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Archives, Global Logistics, Global Trade Daily

How to Strengthen Supply Chain Traffic When Everything Else is Lagging

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The current state of the supply chain in a post-pandemic world is vulnerable. Many businesses were forced into making major upheavals post-2020, – 60% of healthcare businesses alone claim they reorganized their supply chain. Also, it’s no surprise that ports around the world are looking to make cargo movement more sustainable. 

Maintaining a steady flow of traffic is about connection and data-sharing. In other words, it’s about building relationships and sharing the right data that allows you to automate your supply chain and make better decisions. 

In this article, we’ll be showing you how to build a more resilient and collaborative supply chain – through honesty, technology, and having the right people in place so that traffic flows and your customers are satisfied. 

Start with honesty in the chain 

Companies like to discuss market-size growth and functionality, but supply chains need direct discussions for individual elements and capabilities. 

In essence, your supply chain doesn’t just need a range of professionals who have the necessary skills to manage an end-to-end supply chain – they also need openness and transparency. 

Take, for instance, supply chain management software. If the software claims to provide real-time visibility but a partner doesn’t enable the data share, those claims no longer matter. 

Indeed, the pandemic has caused a rethink regarding supply chains. Now, there is a shift in focus on things like algorithmic and data literacy as businesses strive to become more collaborative and resilient. But if your supply chain managers aren’t able to maximize SCM software, this shift in focus falls apart. 

Companies need an honest look at that value and a plan to respond with outside data sets, the integration they create, and more. When you create a culture of trust, you will attract high-quality partners and suppliers that share your mindset. 

Additionally, being open and frank about possible options – as well as sharing data sets and so on – help create a transparent climate that can lead to consistent improvement throughout your entire supply chain. 

Building resilience together 

The pandemic meant that relationships between shippers and suppliers, among others, altered radically. Margins are no longer as lean, and it’s much better if you all work together. 

Indeed, winning a pandemic supply chain is about embracing integration and data sharing so that every point is flexible, responsive, and collaborative. This is key in an epoch where supply chains exist in a more disruptive and volatile environment than in pre-2020. 

Pre-pandemic, the argument might have been that adopting new approaches – such as automation – was financially risky. Now, it’s essential to both mitigate risk and to improve financial performance. 

So what do you need? Supply chain resilience which can boost your ability to respond to adversity and bounce back. The structure should be a mix of technology, people, and automation.

Technology

Smart technology now exists in the supply chain arena as well. Businesses can use both AI and AA to help them make better decisions – and to ensure that many tasks are just a single click away. 

Indeed, more and more application vendors are now embedding their applications with AI (artificial intelligence) and AA (advanced analytics) capabilities that process data from your entire supply chain and offer valuable business intelligence that informs you what action to take. 

Advanced analytics especially allows businesses to assess data autonomously far beyond the capabilities of “regular” business processes, thus allowing them to learn more about their supply chain. 

Take, for example, edge computing. Edge computing takes a section of your supply chain data, removes it from a centralized data center, and places it where it’s closer to the data source, such as a warehouse or even a manufacturing facility. 

As the velocity and volume of your data increase, streaming it becomes a harder, thankless, and more inefficient task – unless you adopt advanced technology, such as edge computing. It positions storage and servers at your central data sources, takes a load off, and boosts efficiency and speed. 

People 

Supply chain tech will give you a competitive edge, and help you build a more resilient chain while ensuring you outstrip the competition. Technology, though, is moot without the right people working on it.

There are multiple supply chain functions, from supplier management to warehouse management, and from freight coordination to inventory control. The bigger your business is, the more manpower you may need to cover all the bases. 

Naturally, all supply chains are unique – it’s important that you find functions that closely align with others. For example, you might find that warehouse management and inventory control can be manned by the same individual. 

If, on the other hand, you hire a range of people to control different functions, you need to work together to find functions that flow together so that every team member has access to the same tech and data. This ensures a more seamless supply chain where everything and everyone is moving in the right direction.

Post-pandemic, it’s also important to hire the right smart analysts who are able to understand supply chain issues, freight rates, and market trends. Analysts need to crunch huge swathes of data and perform reviews of warehouse space limitations and stocking program restrictions, among other things. 

To help your team analyze the data faster and more efficiently, equip them with the right tools and tech.

Automation

Time is of the essence – especially for supply chains, where businesses can harness automation and investment to help them get the most out of the tech in high-level actions. 

What does this mean?

AI and alerts – backed by machine learning – can be used to minimize human involvement in decision-making, thus preventing delays (and errors). It reached the point where it can accurately forecast your inventory – among other things – and inform you about stock levels. 

Essentially, automation joins the dots needed to get the most out of your technology – so that workflows speed-up, human errors are reduced, and your supply chain becomes more efficient. 

Businesses can also invest in tools that track and flag shifts, and compare them to historical trends. In other words, they don’t just flag each time stock needs to be resupplied, they also know how much faster (or slower) a company got to this point – compared with the previous month, quarter, and year.

This is key because you need a tool that helps you forecast, plan and control your inventory. With AI-driven solutions, businesses can analyze demand insights (and correlate them), as well as plan their stocking more accurately. 

Eventually, you can automate your entire stocking and fulfillment process, which will save you a heap of time.

Final thoughts 

The blunt truth is that there is no post-pandemic supply chain – gaps between supply and demand soared during the pandemic, with businesses suffering extreme shocks at both ends. Two years into the pandemic, 16% of worldwide businesses still report disruptions. 

For supply chains, the pandemic isn’t merely a short-term disruption. it has longer-lasting, wider implications for logistics operations. 

As a result, nothing points to long-term easing right now. AI improvements – no matter how advanced – can’t reverse the trend alone. It’s time to build a supply chain plan of action that reflects your company values – one that is built on honesty, leadership, communication, and openness. To accomplish this, work with your team to create workflows, resilience, and partnerships that foster growth. 

About Jake Rheude

Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

 

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3pls, Archives, Global Logistics, Global Trade Daily, Warehousing

7 Supply Chain Optimizations to Protect You in 2022

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Current market turmoil is too big for any company to control, but leaders can take some first steps to protect themselves in 2022 with supply chain optimization best practices. Shoring up relationships, improving understanding of current affairs, and adding safeguards all can play a role in securing operations. For companies looking to create a significant impact in short order, here are seven optimization efforts to try.

1. Map the supply chain

Supply chain designs are changing rapidly. Not only can modern technology bring partners together and facilitate near-instant data transfer, but mergers and acquisitions are shifting the landscape of what’s available. To optimize a modern supply chain, you need a good map to see how parts move and where new connections appear.

Consider creating a robust visualization of your supply chain. Show how goods move, where data flows, and what connects each point physically and digitally. You may identify new pathways or constraints, discover unnecessary, duplicative efforts, or uncover advantages such as optimized warehouse locations. But to find these, you need to be able to look.

2. Consolidate data and documents

You need accurate data that’s readily available if you want to respond to a crisis. The more significant the delay in collecting and analyzing this information, the more time it takes to adapt to whatever occurs. So, focus your supply chain optimization on efforts to automate data capture, consolidate it, and make it usable for you and your partners.

One core area to start with is your documentation. Look for tools that support data capture and verification in standard documents, such as invoices, bills of lading, service-level agreements (SLAs), dock receipts, and more. Build a single repository to help you track everything a shipment uses. When possible, work to integrate your tracking and partner systems so that everyone is working from the most recent status and information.

3. Strengthen current relationships

Your supply chain is complex and intricate, involving a wide range of partners. Use the lessons and capabilities from documentation-focused efforts to foster broader communications improvements. Ask suppliers and partners what they need from you, such as updated forecasts or projections. Speak with carrier reps to secure capacity and discuss your seasonal volume. Tell companies how you measure their capabilities or SLA success. Ask partners how they measure you.

The aim is to open lines of communication and start discussing ways to be mutually beneficial in every deal. When you’re a better partner during non-peak, companies are more likely to give you additional support, capacity, and leeway during peak. As we’ve seen in 2020 and 2021, that can make a world of difference.

4. Secure additional space early

Keeping the peak season focus, it’s time to work on your current capacity. Can you or your 3PL store additional goods? Are you running out of shelf space? What will happen when you scale, up or down?

For 2022, it’s a promising idea to start thinking about scaling up your inventory. We’ve seen slower inbound services and prolonged delays at ports. So, increasing stock on hand helps you avoid stockouts and backorders. Work to secure or build that additional space early on to accommodate this increase in stock. It’ll protect order fulfillment as well as give your overall supply chain more lead time.

5. Create realistic alternatives

Communicating with existing partners around their KPIs and your needs, such as storage, will often identify gaps in coverage. You may realize that some partners can’t meet every demand or that they’re at risk when supply chains struggle.

Protect operations with supply chain optimization practices focused on diversity and alternatives. Bring on additional carriers and regional support to keep goods flowing. Try different warehouses or 3PLs for your sales channels to determine the best fit. Adding partners eliminates many single points of failure, allowing you to keep running when the market becomes complex. This protects customers and partners throughout the supply chain by ensuring operations don’t grind to a halt.

6. Enact a testing plan

Today’s supply chain relies on a considerable number of systems and tools to operate efficiently. So, any changes in these can impact your overall supply chain optimization efforts. Work with your partners and internal IT teams to create a plan for testing changes, tracking implementation, and evaluating results. Set metrics and KPIs for tools as well as new partners.

Whether you’re splitting fulfillment across multiple partners, trying new suppliers, or shifting ERPs, you’ll face significant challenges. A robust change management plan will help your teams stay on track, encourage people to try the new methods, and attempt to make investments lucrative. Give people what they need to grow your supply chain.

7.  Continue to analyze and adapt

Supply chain optimization never truly ends. While the other tips can help you take initial steps or push a project further, you’ll want a team to review operations consistently. Assign analyst roles and tasks to ensure you’re continually reviewing the overall supply chain and any improvements you make. Crunch short- and long-term data to see where you’re succeeding or if new risks emerge. Always keep testing and reviewing to help mitigate the impact of supply chain disruptions that have become increasingly common in the 2020s.

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Jake Rheude is the  Vice President of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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3pls, Archives, Global Logistics, Global Trade Daily, Warehousing

3 Pros and Cons of Backorders in Ecommerce

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With the 2020 tumult disrupting global supply chains and increasing consumer reliance on online shopping, there’s a growing interest in ecommerce backorders as a way to safeguard revenue. Uncertain availability means businesses can face listing a product as either unavailable or on backorder. While backorders may seem to be a smart path because it contains potential profits, businesses may also be putting customer lifetime values at risk.

So, let’s look at the pros and cons of three critical areas governing backorders to help ecommerce businesses determine if they’re a smart path forward.

Inventory optimization potential

Backorders give you one way to maximize your revenue and inventory, even when limited space is available. It is often considered when ecommerce stores hit a growth spurt.

The Pro

Relying on backorders can help you sell a product without needing to carry a large stock volume at every moment. Companies can accrue backorders and then fill them once reaching a specific volume, making it easier to run operations in a smaller location. This can be a way to generate revenue while also minimizing rental or building purchase costs. Fulfillment may be slower, but overall expenses are generally lower.

The Con

Using backorder techniques to minimize your inventory on hand – such as setting a threshold of orders before you restock – gives your audience more time to find alternatives and ask for refunds. If the threshold is too high, you run the risk of losing revenue and getting hit with bad customer reviews that may harm future sales opportunities. If the threshold is too low, you can end up buying regularly but making a few customers wait for each cycle, which can cause unnecessary frustration and lower customer lifetime values.

If just-in-time fulfillment is a compelling option for your company, crunch the consumer data you have and run tests. See how long people are willing to wait for your goods, and if you can fill things consistently enough to avoid buyers becoming upset.

The revenue question

Ecommerce backorders also provide companies with a chance to generate ongoing revenue. However, this comes with a risk to operations if you can’t secure it. That depends on a mix of your supply chain speed and customer service capabilities.

The Pro

Backorders allow companies to maintain revenue even when there is a disruption to inventory or restocking. Generating ongoing revenue can keep the lights on during delays, ensuring that you meet all customers’ demands.

The Con

The potential con of backorder revenue is that it is precarious. You can’t really consider it “won” until goods are delivered. If you establish backorders and rely on this revenue but then face a wave of cancellations because of delays, you may end up short and face a rising debt.

Banking on revenue from backorders puts ecommerce companies in a risky position if they are not financially secure based on in-stock products and orders they can currently fill.

Space in your space

Growing ecommerce companies often face crunches for space if they’re not using warehousing and backorder services from a 3PL. When products are in demand but space is limited, some companies feel they need to rely on backorders to protect revenue. This can be beneficial but does come with other risks.

The Pro

Backorders allow ecommerce companies to utilize some of their existing warehouse and floor space best. If you stock a good after an order or only have room for small batches, backorders allow you to accrue sales continually while working in minimal space. Organized businesses can use cross-docking techniques to fill orders rapidly once goods come in, minimizing processing, and other times. When products take up a large amount of space or a warehouse us pulling double duty for other activities, backorders add flexibility to space management.

The Con

On the other hand, backorders can create significant space concerns and constraints if not appropriately managed. A high sales volume followed by many order cancellations can mean companies have too much inventory for their space. If products are perishable or easily damaged, disruptions in backorders can lead to more spoilage or damage, harming revenue potential.

Ecommerce backorders also increase the need for space as companies try to manage fulfillment. Pre-staging orders can be necessary if you have a large volume of orders waiting on a backordered product. However, that requires space for prepared boxes, room for pickers and packers outside of typical areas, and storage for things like tape and filler.

Space constraints will drive backorder considerations. The critical thing to remember is that you’ll still need room to manage fulfillment and backorder support only delays that need at best.

How well do you communicate with customers?

Success with ecommerce backorders depends significantly on your ability to communicate. Not only does a backorder need to be clear on sales pages, but support teams need a consistent way to explain backorders to customers. You’ll need to provide updates proactively and alleviate frustrations to protect payment.

Most ecommerce companies that support backorders see an increase in customer service demands. Hiring additional team members should be part of your revenue consideration. Also, existing customer service needs to have a strong enough reputation that you can withstand any angst that comes from backorders.

Avoiding cancellations, maintaining order volume, and securing positive reviews will depend on how well your service team explains the value of backorders to your customers.

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Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others. 

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What Warehouses Should Keep in Mind When First Implementing Cross-Docking

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Warehouses that want to improve labor and space utilization without expanding to a new location or breaking ground may consider cross-docking because of its potential efficiencies. Unfortunately, it can also come with many pitfalls for those trying it for the first time.

Cross-docking requires a detailed understanding of your team, space, partners, and technology. For new warehouses, that means implementing cross-docking should come with significant testing and preparation, especially in terms of your inventory management, scheduling, spatial allocation, and the training you give your team and partners.

Test inventory management tools

Cross-docking prepares companies for just-in-time (JIT) shipping and distribution, making immediate use of inventory as it arrives. Companies that want to start utilizing cross-docking will need a robust inventory management system that can understand and differentiate these inbound shipments.

Your tools must be able to understand inventory utilization. If half of the goods on an inbound shipment are for JIT purposes, then the inventory platform must be able to split received goods and correctly update both inventory levels and the number of products you list for sale. If this action would require ongoing intervention from you or additional inventory counts, it could introduce higher labor costs that negate cross-dock benefits.

Ultimately, cross-docking can help with inventory management and often keep companies from needing to expand physical infrastructure for the products they hold. It might also help you expand operations to support backorders. This takes time, however, and requires tools that help you understand and manage inventory levels without adding burden.

Robust scheduling includes flexibility

Cross-docking is intense choreography. You’re going to need smart people and reliable technology to manage the planning of how people and trucks are moving in and around your site. Cross-docking and JIT operations demand having the people available to handle inbound shipments and process them while helping your team know what inventory is ready to use and what needs to be put away.

Dock availability and the time of truck arrivals and departures must be flexible so that your operations can run normally. Every cross-docking team plans on a smooth day where everything runs on schedule. However, that’s rarely a reality. Paperwork, traffic delays, accidents, or even someone needing to use the bathroom can cause a small delay. Something as simple as an employee driving through the parking lot can force a truck to wait.

If you schedule everything down to the minute and don’t give your team and partners flexibility, it’ll cause greater delays. In most cases, as you’re expanding and learning, arriving trucks will end up waiting because it’s hard to predict the time people need, but you also don’t want docks sitting empty for extended periods. So, ensure that you have people ready when trucks are there and test the time you give teams for inbound and outbound.

Dock door assignments should consider space and traffic

One other caveat that many warehouses don’t consider when they first start cross-docking is the physical space that people, trucks, and inventory required. Cross-docking effectively requires that dock door assignments be efficient and allow incoming and departing trucks enough space to maneuver safely and quickly. Adding extra points to a turn will slow the entire process down, for example.

If your warehouse wasn’t built with cross-docking in mind, test this thoroughly. Often, warehouses need significant reconfiguration of internal elements or will install new doors and adjust the building design to facilitate cross-docking. Multiple teams, doors, trucks, and the equipment everyone is using are going to take up extra space and need to be able to move freely and safely. Start by giving everything and everyone more leeway than you think they need.

Some new inventory and dock management platforms support cross-docking and can make suggestions based on timing, assignments, and other aspects of your operations based on historical and current data. When your tools offer this, try out their analysis and recommendations to see if you can maximize your efforts.

The entire supply chain requires competencies

Cross-docking is an advanced management and utilization technique for any warehouse or distribution center. You’re managing dock door assignments, transshipment, vehicle routing, product allocation, barcode scanning and putaway, new warehouse layouts, and the network and systems required to manage it all.

Your team needs competency in each of those areas and activities. Partners should have their own understanding plus the ability to support you. Inbound expertise is required, across the board, for JIT requirements and scheduling to be effective.

You’ll eventually want to build out appropriate penalties for time windows to keep things running smoothly, but that requires your team not to cause delays. In many instances, cross-docking is complicated mathematics disguised as people and trucks.

Take your time to test and implement it. Work with partners proactively to help understand what they need from you and explain what you need from them. Train your team specifically on the new processes and requirements. Simulate, test, and optimize procedures and layout continually.

Cross-docking can save warehouses significantly on a variety of costs and size requirements. You might reduce material handling and make labor more efficient. Customer satisfaction can be improved, too, as you’re relying less on backorders or older products. Achieving all of those wins is a lengthy process, and it’s important to walk into the situation with patience.

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Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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What Logistics and Warehouse Businesses Should Learn From Amazon’s Mistakes During the Pandemic

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Amazon has dominated the COVID-19 news because of its ability to get some medical supplies and the reliance of people on ecommerce to protect them as they shop. It’s been a good time for the company’s financials, with significant increases in sales and secure positioning for its other services.

Unfortunately for Amazon, it was also in the news because of product mishaps, fulfillment concerns, worker illnesses, and poor handling of concerns. What the brand did, and didn’t do, can be a useful guide for smaller warehouse and logistics companies to follow.

The best lessons are from Amazon’s mistakes because few 3PLs and service companies are big enough to survive similar mishaps.

Take care of your partners

Amazon faced a tough situation, just like all of us. We all got some things wrong. The hope is that they won’t turn into long-standing issues. For Amazon, it’s unclear if that’s the case, but the thing with the most significant potential for prolonged harm is how it communicated and worked with its partners.

The biggest misstep from a partner standpoint would be when it announced a halt to accepting shipments from some third-party sellers and gave little guidance on what this meant. Sellers flooded Amazon’s forums to ask questions, and rumors spread just as fast as valid answers. People were upset, scared for their businesses, and frustrated that Amazon might not be a viable marketplace in the future.

While Amazon did eventually move back to allowing all third-party shipments for its FBA program, some harm has been done. Companies are looking at moving to do their own fulfillment — which was rewarded by the Amazon AI at some points during the pandemic — to prevent any future move from Amazon bringing an entire small business to a halt.

Amazon may be trying to tackle some of that relationship harm with efforts like waiving some storage fees or supporting more fulfillment operations. Still, it’s unclear how much harm happened.

Diversify and simplify when you can

An estimated one-third of top Amazon sellers are in China. It is believed to source some of its own products from China, and many of its smaller sellers also get products or drop-ship directly from the region. The spread of the pandemic and closure of factories, as well as shipping issues, then hit Amazon and its sellers quite hard.

Different points at the supply chain all ran out of goods or production capabilities, which started limiting what was available and hurt revenue for everyone involved. Diversifying sources and partners, both in goods and location, could have mitigated some of this risk.

Logistics professionals should look at regional needs and concerns right now. Identify where your product lines could struggle and if there are potential replacements for materials. If you’re a 3PL or providing other warehouse services, consider expanding to multiple locations. This can help you get goods to the end-customer faster as well as protecting fulfillment operations during COVID and similar black swan events.

Safeguarding people is just the minimum

At least seven of Amazon’s employees have died from the coronavirus, and the company has been very unclear about how many others have become ill. There is a new lawsuit by employees around the company’s contact tracing and potential exposure of employees — worth noting that the lawsuit doesn’t seek damages, just an injunction forcing Amazon to follow public health standards.

Throughout the pandemic, Amazon has taken heat for how it has treated its workers. This covered safety equipment and protections, sick leave and sending people home, and how it responded to labor demands. And, much of the anger is deserved.

The pandemic is scary and should be taken seriously. It was Amazon’s responsibility to make its employees feel like they were taken care of and protected.

Hopefully, this has served as a wakeup call for logistics and warehouse businesses. Your people matter, far beyond just what they contribute to the health of your business. There’s also a good chance your business will be judged by how you treat your teams. The world now makes much of this information public, too, if you need that extra layer of fear to get going and ensure your teams are safe, protected, and following the right policies.

Protect long-term customers and your business model

Consumers are spending more money on Amazon and shopping more often, largely due to the pandemic, but they’re not as happy about it. People saying they were either “very” or “extremely” satisfied with Amazon’s service fell from 73% to 64% from June 2019 to now.

The biggest frustrations have been delays in shipping and unavailable products. People view that they’re paying for the service, and its interrupted supply chain is still creating waves. Prime shoppers aren’t able to get the fast, two-day shipping on all purchases, despite being the most lucrative customers. Amazon has actually seen a decline in customer satisfaction over the last five years, according to that same report.

Growing discontent is a threat. Logistics and warehouse businesses don’t have the size of Amazon or the weight to throw around. If your customers aren’t getting what they’re paying for, they’ll move on to another service provider. The same is true if you’re late, damaging goods, or getting orders wrong. There are few real alternatives to Amazon, but there are many alternatives to all of us.

That’s perhaps the most important lesson in all of this for the logistics profession. Amazon needs to learn it before a genuine rival rises to compete, but it’s a good focus for warehouses starting today.

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Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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How Coronavirus Impacts Ecommerce Business and Beyond

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There is no vaccine to prevent the spreading Coronavirus, yet, and that holds lessons for ecommerce businesses and the people who work at them. Today, we’re facing a time to prepare and hopefully limit exposure and risks at work.

For businesses, preparation and the possibility of illness are going to reshape the day-to-day. After reviewing scenarios and government guidance (here’s your list of cleaners that can take out COVID-19), we’ve put together some thoughts on the most significant impacts we’ll see soon and how companies can respond to protect their people best.

Sending people home is best but expensive

Many ecommerce businesses are small shops, though we’ve been impressed to see some grow significantly in recent years. It’s always a fantastic thing to witness, but their scrappy nature usually means staff are perpetually busy and wearing multiple hats.

Unfortunately, that might mean the COVID-19 threat will hit you especially hard.

Your best bet to keep everyone at work safe is to let anyone go home when they feel even the slightest bit sick. If that happens, document the person arrived and left, plus who they came into contact with at work — employees and anyone who might’ve visited — and how they got to work. This can help medical professionals who are already going to be stretched thin.

The best practice here is going to cost you, but it could also save your team from significant harm, and that is to pay your team to stay home. Help people use their sick days and vacation time if they have it. If someone doesn’t, review your budget to see what you can offer.

If people can’t afford to stay home, they come into work even when sick. That’s a danger none of us can afford right now.

Wash your hands and everything else

There is a little bit of a silver lining in the ecommerce world: most of the products moving through your warehouse are going to be safe. You’re watching for people above all else.

This is because most coronaviruses, including COVID-19, struggle to live on surfaces. So far, we haven’t seen evidence of contaminated food products, which is generally where you’ll first see illnesses spread by products/goods.

For products, the risk is a “smear infection” where someone coughs or sneezes onto a product or package, and a new person touches that and then their face. The virus is believed to have a short lifespan in smear cases, so your team should be relatively safe. Maximize their safety by prioritizing handwashing. Have your team wear gloves at all times, but still make them wash up after unloading a truck.

What ecommerce and other businesses will want to be aware of is the route their goods are taking to get to warehouses. If something is passing through areas where there’s been an outbreak or if you learn that a delivery person for a specific company has fallen ill, pay extra close attention to cleaning these products and packages.

For goods that have been traveling to your company for days or weeks by ocean, there’s minimal product risk from that leg of the trip, but local infections may be possible. Air travel is fast enough that you could have higher smear risks.

So, wash hands, wear gloves, and clean everything as you go.

Alternatives may become scarce

Some impacts are already rippling through the global supply chain. One significant shift is that companies are scrambling to find alternative sources for products and raw materials. Not only are prices for some materials already rising, but there’s growing lane congestion.

This will be a double hit for businesses.

If you’re not manufacturing your own goods, then you need someone to do it for you. New partners can be expensive to source. At the same time, your competition will be turning to them as well. Also happening concurrently, manufacturers will be looking to secure new sources of raw materials. Shifts, such as nearshoring production and buying local, all come with increased costs and supply chain changes.

The other impact is that it could generate more congestion for local delivery and fulfillment options. Companies may face the cost of shipping their goods rise, as well as see delays in fulfillment times. Those delays are already happening in areas where there have been cases of the virus.

Your business will pay more, but you might not be able to pass on additional expenses to customers. Delays in fulfillment times will hit the ecommerce sector hard because customers already expect two-day shipping options. Now, you’ll have to tell them it could be longer and cost more, which may see them take their business elsewhere.

Outsourcing will increase

Expect companies to start diversifying the way they get goods to customers. One particular method is going to be outsourcing fulfillment to companies that have multiple warehouses. It’s a smart way to avoid supply chain bottlenecks because it minimizes the chances that a local outbreak will impact your entire fulfillment operations.

For some ecommerce companies, this outsourcing may come with a small benefit of reaching customers more quickly (once they get stock to third-party logistics providers), while also protecting some workers. If we see sustained infections and spreading of the virus, there’s a potential that many small ecommerce businesses will start outsourcing their entire fulfillment operations.

In the short-term, that could cause some issues with warehouse space and fulfillment staff. In the long run, it might cause cost reductions and lead to greater product availability.

Companies who can figure out how to avoid delivery slowdowns — such as large ones able to own and use their own delivery fleet — will dominate the market. The U.S. has faced a truck driver shortage for years, and growth in outsourcing may help curb some of that, but it would come with higher wages for those who have a greater potential risk of being exposed to the Coronavirus and other health concerns.

Our world will look different tomorrow

We’ve fully embraced the gig economy and home delivery, and there’s a potential it all comes crashing down. Whether these employees continue work amid growing exposure (and even after becoming sick) or if services start slowing down, it’ll impact the daily lives of many Americans.

Businesses will also face changes in the way we bring people to the office, help staff pay for healthcare, and what processes we no longer choose to do to protect ourselves. The global, interconnected supply chain is already changing, and nothing but time will tell us how profound and varied this impact is.

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Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.