What’s happening with supply chain purchasing plans?

Every year, Peerless Research Group, the research arm of Modern Materials Handling, Logistics Management and Supply Chain Management Review, asks readers about their purchase plans for the upcoming year and years as part of an annual Warehouse Automation Study. Last year, for instance, the 2019 Automation Solutions Study, found that over the next 24 months, 57% of companies planned to shop around for conveyor and sortation systems, while 55% wanted automated packaging solutions and 50% planned to invest in robotics for picking. Fifty-percent were interested in mobile collaborative robots, 47% in shuttle systems/mobile robotic storage, and 47% in robotics that are used for palletizing.

This year's survey went into the field between April 4 – 17, 2020, a time when COVID-19 was really hitting home and one state after another announced lockdowns. We wondered how the virus might be impacting the plans of you, our readers. Here's what you told us.

Figure 1. In light of the coronavirus outbreak, is your company changing it’s purchase plans for warehouse and DC solutions?

Source: 2020 MMH Usage & Implementation of Warehouse & DC Automation Solutions Study Field April 4 - 17

Caution, or maybe uncertainty, is the watchword when it comes to current plans. Twenty-one percent (21%) told us that yes, their plans have changed. Some 26% said no, it's full steam ahead. Meanwhile, 47% - nearly half, said they are unsure at the present time.

Figure 2. Other comments regarding company's plans to change it’s purchase of warehouse and DC solutions?

5-10X Increase in volumes…
All CAPEX not fundamental for current operations is on hold…
Always trying other options….
Holding tight for now, until further clarity on recovery timing (3 mentions)...
Purchasing has increased due to greater order volume (Food & Bev. distribution)...
Scaling back on planned upgrades/purchases…
We are on temporary shut-down.

Source: 2020 MMH Usage & Implementation of Warehouse & DC Automation Solutions Study Field April 4 - 17

The reasons for changed plans in written comments ranged from increases in volume, which presumably means a company might be contemplating increased investments in automation, to readers who told us that non-essential CAPEX are on hold for the time being or that the company was on temporary shut-down.

Figure 3. When do you see changes to your purchase plans being made?

Source: 2020 MMH Usage & Implementation of Warehouse & DC Automation Solutions Study Field April 4 - 17

Based on reader responses, a majority of those changes (69%) in plans are happening in a relatively short time, ranging from immediately (37%), to within the next 3 months (22%) and between 3 and 6 months (10%).

You can let us know how COVID-19 is impacting your plans by emailing me at [email protected].

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