5 Challenges Facing the Defense & AEROSPACE Warehousing Industry in 2022

February 22, 2022

The Department of Defense (DOD) is the largest inventory manager in the world, maintaining hundreds of million cubic feet of warehouse space. However, capacity remains an issue, and aerospace and defense entities continue to use commercial warehousing facilities to fill in the gaps. These facilities, however, need to be able to step up when it comes to storing aerospace and defense equipment, technology, and supplies. Some of these items are unlike almost any other and come with a specific set of needs, including storage requirements, security, unpredictable demand, and tracking. On top of that, defense and aerospace warehouses need to continue to focus on their workforce and employee safety. 

Five Challenges for Aerospace & Defense Warehousing

What do aerospace and defense entities want from their warehousing network? The operation in the warehouse needs to be working at an optimum level, with minimal waste and maximum value, while prioritizing security and health and safety. So, let’s take a deeper look at the top five challenges that the defense logistics industry, and those supporting government warehousing, is trying to manage and solve.

1. Warehouse Capacity

Many warehouses and distribution centers are built based on the needs of the business at the time of construction. Of course, the aerospace and defense industry is always evolving – and expanding, especially when there are peaks in demand. In fact, the US aerospace and defense market is expected to grow nearly 2.5% annually through 2030. 

To make space for the storage of supplies, equipment, and technology, the Department of Defense (DOD) is testing new technology at select facilities throughout their warehouses that could improve capacity and lead to warehouse consolidations or reorganizations. The technology is called LiDAR, or Light Detection And Ranging; although the main purpose is to aid in mission planning – mapping terrain, performing route planning for unmanned ground vehicles, and conducting surveillance – it’s also being used for warehousing. LiDAR uses light waves to create a 3D blueprint of storage space that optimization software can then use to create better storage solutions. “Consolidating inventory could help eliminate the need… to spend money on commercial warehouses outside military installations,” says Jim Liberko, who is leading the project for the Defense Logistics Agency (DLA).

While the initiative could result in more DOD services storing their own material, commercial warehouses will still be needed, but those that can prove their value through efficient and effective storage options will be most valuable to the industry. To maximize space and show their value, aerospace and defense industry warehouses may want to consider expanding vertically, not horizontally. This can be accomplished by installing customized storage solutions using pallet racks, industrial shelving, and other material that matches the layout of the warehouse, improving defense and aerospace warehouse capacity and efficiency.

2. Warehouse Design

When an aerospace or defense entity outsources warehousing to a commercial company to avoid building a fixed-cost asset, they can share space alongside other non-competing parties in a single warehouse environment to take advantage of economies of scale. However, they’ll be looking closely at warehouse design when making their selection. To be a viable solution for suppliers and manufacturers, warehouses must strike a balance between maximizing storage density and maintaining operational efficiency. This is highly important, as the scale and range of inventory are likely to change over time and be received from a variety of different and changing suppliers.

Countless components and parts are also necessary for the aerospace industry, and they tend to vary widely in size. Some of these so-called “ugly” items – those which are not suitable for standard racking – require a warehouse that has the ability to safely lift, inspect, and store them (as well as the space to store them). Because these parts may be needed on short notice, storage organization and accessibility are key. This can be achieved if an aerospace warehouse regularly reviewing the space to maintain ugly items and optimizing storage; using specialized packaging is another way warehouse managers can store items that leave a large warehouse footprint. 

Traceability and Regulatory Requirements

Traceability and a warehouses framework for following the flow of parts and finished goods is critical for aerospace and defense entities. All items should be tracked and some items may need to meet specific guidelines of Unique Identification (UID). The IUID program was created by the U.S. DoD to improve the traceability of assets that meet certain criteria. Items that must be tracked using IUID protocols include:

  • Items that have an acquisition cost of more than $5,000
  • Items that are defined as mission-critical or controlled
  • Items that are sold to the military by 3rd-party suppliers

To manage product traceability and tracking, once again many defense industry warehouses are turning to a modern WMS. With a smart WMS in place, defense warehousing operators can control and monitor inventory, gaining a 360-degree view of the product in real-time, from the moment it enters a warehouse until it’s transported out to stores or end-users. The system allows them to record changes in inventory, anticipate inventory needs, and much more. It also improves aerospace and defense warehousing standards, helping support product traceability and accelerating responsiveness if there are any issues impacting the supply chain.

Some key WMS software features that may be especially important for aerospace and defense logistics include:

  • Real-time inventory data
  • Mobile barcode label and RFID tag scanning
  • Integrated military DD forms
  • Military-grade security
  • Chain of custody documentation and audit trails
  • Facility and maintenance management
  • Third-party integrations
  • Inventory control automation

4. Employee Safety

The warehouse can be a dangerous place, and employee safety remains one of the big pharmaceutical industry challenges. Accidents at docks or those involving forklifts, conveyors, materials storage, and manual lifting can result in injury or even death. 25% of all industrial accidents occur at the loading dock while forklift accidents result in nearly 35,000 serious accidents annually.

Aside from the devastating impact on those injured and their families, aerospace and defense warehouse accidents affect the business itself. Warehouse accidents account for 95 million lost workdays every year, and accidents result in a loss of productivity, worker compensation claims, lowered employee morale, and damaged goods. To ensure accidents remain at a minimum and warehouse employees remain safe, defense warehousing companies need to regularly keep track of potential maintenance issues throughout the warehouse and consider installing safety features such as dock alerts, lighting, and safety gates; as well as rack netting, end guards, and pallet support bars. Download our warehouse safety checklist here.

5. Workforce

According to the US Chamber of Commerce, all sectors of the economy are facing a shortage of workers, with over 10 million job openings in June (a number that continues to escalate). This, of course, has impacted the defense warehousing industry as well. With the sudden growth in logistics, more companies are trying to expand meaning workers have more job options available to them. Inbound Logistics reports that nearly 65% of surveyed warehouses said that finding, training, and retaining qualified warehouse employees was a challenge. Lack of staff or unskilled staff can lead to increased labor costs, slow business growth, and damage the company’s reputation with customers.

Until the economy right sides itself, warehousing and distribution centers may want to look at ways to boost the productivity of the current staff. This can be accomplished by maximizing storage space and improving organization, which reduces employee walking and searching time, ultimately improving fulfillment times (better organization will also make training easier when you do find new employees). Automation and a solid WMS can also improve employee speed and help pick up the slack when there’s a lack of employees. 

How SSE Helps Defense LOGISTICS AND Warehousing Companies

A high-functioning warehouse is mission-critical for aerospace and defense entities. The extent to which this can be achieved relies on close collaboration with and a deep understanding of all aspects of the operation it is supporting. Is your business feeling the strain of any of the challenges highlighted here? If your warehouse is located in Florida or South Georgia, the professionals at Southern States Enterprises (SSE) want to help. For over 20 years, companies in the area have relied on Southern States Enterprises as the leading name in motive power, docks and doors, industrial pallet rack, pallet storage systems, and warehouse equipment. 

We know how to expand your facility vertically, allowing you to save money, increase efficiency, improve operations and employee productivity. We also know how to make safety a priority, and know exactly what you need to keep your docks, doors, and racks safe and efficient. Our field service technicians will also keep your facility running smoothly and safely at the lowest possible cost through a planned maintenance and repair schedule using a warehouse safety checklist. And, when it’s time for a new part, a replacement part, of a technology upgrade, we can help and make recommendations and find the right equipment for you. Want to talk to someone now? Contact us to discuss your needs.

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