Archive for April 2016
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By Amina Elahi
Customer demand for two-day shipping is forcing retailers and warehouse managers to evolve, according to a study released Tuesday by Lincolnshire-based Zebra Technologies.
The Zebra 2020 Warehouse Vision Study looks at how warehouses could change in the coming years. It showed a trend away from massive distribution centers toward more, smaller warehouses closer to the end consumer, according to the 2015 survey of nearly 1,400 people who run warehouses around the world.
“When you order that T-shirt, you absolutely expect you’re going to click ‘receive in two days’ and it’s going to be in your house in two days and it’s exactly the product you ordered,” said Zebra’s Dan Chamberlain, who oversees marketing for the company’s transportation and logistics division.
About 40 percent of those surveyed said the demand for shorter delivery times was a driving factor in warehouse changes.
One way to do that is to put fewer items in smaller warehouses that might be easier for workers to navigate, he said. His company manufactures devices that warehouse workers use to manage tasks and scan goods.
Call it the Amazon effect. The retailing and shipping behemoth has trained customers to expect cheap, reliable and accurate delivery of goods ordered online — and faster than ever.
“Certainly, our friends at Amazon have had a significant impact on how supply chains are managed,” Chamberlain said.
That may be why 76 percent of those surveyed by Zebra indicated plans to open more warehouses in the near future, up from 48 percent in 2013, when Zebra last conducted this survey. On the other hand, about 61 percent planned to increase the footprints of their existing warehouses, down from 64 percent in 2013.
In the past, many warehouses kept track of goods by the pallet, but the rise of online shopping and subsequent need to ship individual items has changed that, Chamberlain said. Now, workers must be able to quickly and accurately identify the specific T-shirt a customer ordered, in the correct size. That requires detailed inventory management that starts when goods arrive at the warehouse and continues until they’re shipped out.
Smaller warehouses could make that easier, Chamberlain said. Accuracy in shipments could also improve, since there would be fewer items to sift through per warehouse.
But while the sheer number of items might be lower, the variety of goods could increase. About 52 percent of those surveyed in 2015 said they would carry more unique items in 2020 than they do now, down from 54 percent in 2013.
That could lead to even more grueling conditions for warehouse workers, particularly the pickers who collect items from the warehouse floor to be shipped out, said Mark Meinster, executive director of Joliet-based worker center Warehouse Workers for Justice.
As order sizes get smaller, there’s less opportunity for workers to use machines such as forklifts to move large quantities of goods, he said. Instead, pickers have to spend more time on their feet — even if they are covering less ground.
“Working conditions have gotten dramatically worse over the last 10 years … and the e-commerce sector has not done anything to change that,” Meinster said.
If warehouses successfully enable more businesses of all sizes to offer two-day shipping within the next few years, they will likely incur costs along the way. But they’ll also sell more products and, theoretically, drive more revenue, Zebra’s Chamberlain said.
The primary concern at the moment is making widespread quick shipping possible, he said. The next question is how costs will be passed on to the customer.
Chamberlain said he did not know whether other retailers would follow Amazon as it pushes toward faster, even same-day, delivery. But it’s possible.
“I don’t think anyone sees consumer demands abating,” he said. “I don’t think you’re going to see a future where … you’re going to say, ‘Eh, I used to be able to get it in two days, but now four days is fine.’”
Warehouse workers who make McDonald’s McCafe cups were also on the picket lines for the first time as part of the Fight for $15 campaign. Among them was Dominique Bouie, 27, who manufactures the McCafe cups at a warehouse in Romeoville. She’s employed by Elite Staffing Inc. and makes $10 an hour.
“We stand on our feet all night. Sometimes we get relief from breaks, sometimes we don’t,” she said. “But it’s just how it goes in the company. You can’t complain about it or you lose your job. We just want to get the pay that we deserve.”
By Stefano Esposito and Alice Keefe
Later Thursday, the group of protesters grew to about 100 people. They gathered outside Elite Staffing at 1400 W. Hubbard St. to protest the company’s relationship with Pactiv LLC and McDonald’s.
Pactiv is a major McDonald’s supplier and creates their McCafe coffee cups.
Protesters entered the building and tried to give a letter the company’s head of operations, but no one answered the door.
Dominique Bouie, a 27-year-old Joliet woman, has worked at the Pactiv factory in Romeoville. She criticized the company for failing to give workers breaks and poor working conditions.
“I hope we win this thing,” Bouie said, because at the end of the day, “we just want to take care of our families.”
The Fight for $15 is zeroing in on Oak Brook-based McDonald’s as “a symbol of what’s wrong with our economy,” the campaign said in its press materials. Many of the protest’s business targets are connected to the fast-food giant.
Among them are Elite Staffing at 1400 W. Hubbard St., where protesters are scheduled to stand in solidarity with warehouse workers who make McDonald’s McCafe cups. The warehouse workers are employed by Elite, which supplies the workers to food packing company Pactiv in Bedford Park, according to the union.
Elite did not respond to a request for comment.