Click and collect: the opportunity in logistics
August 15, 2022 by Alistair Enser
I have written in the past about how the pandemic is accelerating changes that were already occurring in some industries, and the retail sector provides a perfect example. It also reveals the increasing role of data as the ‘glue’ that brings together operations and efficiency, through insight.
When the High Streets closed in the first lockdown, it wasn’t surprising that online retail sales grew dramatically. In 2020, the amount spent in online retail sales increased by 46.1%, compared with 2019 as a whole – the largest annual increase since 2008.
One effect of this has been to drive the development of the warehouses required to store and ship all the items that are ordered online. This has also been driven by retailers’ shift to ‘dropshipping’, where a seller will take an order without keeping any goods in stock; the order being fulfilled, picked, packed and shipped to the consumer without the involvement of the seller.
Already a growing business before Covid-19, the demand for warehouse space is such that “there is a wall of cash coming into our sector”, according to Savills’ European Logistics business. CBRE reckons that every £1bn spent online requires the addition of 900,000 square feet of logistics space; Amazon signed leases on a series of multimillion-square foot facilities around England last year alone.
An opportunity for joined up thinking
The growth in the warehousing and logistic sector presents a unique opportunity for the security industry, and an ideal target for the type of joined up thinking that it already brings to other sectors. “The pandemic laid bare existing gaps in digitization, integration, and tenuous contingency plans” in logistics, according to ABI Research. Companies are now focused on “building a future of resilience and agility” instead.
Let’s consider the journey that a package takes from the shelf to the doorstep. The item has to be kept secure throughout the process. The individuals that transport the item must be kept safe at all times. The package must be transported as quickly as possible: time to delivery is becoming a key competitive differentiator for online retailers and the logistics providers they rely on.
This is important not only when fulfilling high-value items, but all packages. There are a number of security considerations throughout the supply chain, but many originate in the warehouse itself. Despite the adoption of automation and robotics, warehouses are still built on manual labour, and warehouse operators are under pressure to recruit enough workers. Job posts for order pickers – the warehouse-based workers responsible for selecting, packing and sorting items for delivery – increased by 31% in the UK from January 31 to March 18 2020, according to job site, Indeed. In the US, jobs in the Warehousing and Storage sector grew by 41% between 2015 and 2018.
Bringing in so many new workers so quickly presents challenges in terms of training operators and ensuring they adhere to health, safety and security regulations – the common use of agency staff and subcontractors at various stages adds more complication. How do logistics operators ensure hundreds or workers are adhering to health and safety regulations such as not wandering into no-go zones or interacting in a dangerous way with machinery?
No-one goes to work to get injured, and no business wants unlimited fines for breaches of health and safety and the resulting damage to reputation, as shown in the £640,000 fine recently handed to Nestlé for a breach in safety that left a worker’s arm trapped in machinery. Health and safety aside, despite vetting there is always the possibility of criminal activity from unscrupulous workers in warehouses. The security industry has solutions that meet health and safety and broader security needs, based around integrated video, access control and intrusion systems that also deliver data to managers so they can spot patterns, increase efficiency and provide evidence of compliance with rules and regulations.
From warehouse shelf to doorstep, and every point between
Operators already know how to allocate space for goods in their warehouses using Warehouse Management Systems. Integrated video can support this, by using AI to calculate free space, assess the turnover of goods from retail data and propose the optimum location for goods in a warehouse, based on these criteria – ensuring that increasingly expensive warehouse space is used as efficiently as possible.
Of course, the supply chain doesn’t end at the warehouse gates. ANPR-enabled video can guide delivery and collection vehicles to the correct bay at a warehouse and track items as they are loaded and unloaded. Reliance High-Tech works with a number of logistics partners who are already using GPS tracking technology in vehicles, of course, but video at the point of loading also enforces security, while body-worn video keeps these drivers safe and provides evidence of the delivery of an item right to the doorstep if required: tracking the item from the warehouse, through distribution centres and out for last-mile delivery to the very doorstep.
As the value of goods in transit has increased – with the Average Order Value of an online shopping order in the first quarter of 2021 at £52.94 – drivers and the goods they carry represent an opportunity for thieves. Since the pandemic, many parcels have been left on a doorstep without the need for a signature. Body-worn video could play a valuable role in demonstrating safe delivery of an item, as well as providing evidence in the event of spurious claims. It also acts as a deterrent and protects a delivery driver in the event of threats or assault.
Looking further down the line, warehouse and logistics providers could be looking to the security industry for guidance on technology such as augmented and virtual reality, harnessing the power of the cloud to provide scalability, using AI to spot security threats before they emerge, and leveraging the data generated across the entire supply chain to ensure safety at every stage.
It’s not only warehouses and logistics that represents an opportunity for the security industry, of course – plenty of sectors are being turned upside down by digitisation. These are great opportunities for the industry, and we must grasp them!