Any business that runs its own warehouse operations for order fulfillment and logistics is bound to experience challenging situations. So many factors go into warehouse management, and because of that smaller details can get overlooked and wind up causing unforeseen problems and supply chain bottlenecks. It is important to consider these factors to ensure that your warehouse operations are as reliable, cost efficient and effective as possible.
Many companies choose to outsource their warehouse and logistics operations to a third-party logistics provider to relieve these issues from falling to you as the business owner, when you should be doing other things with your time. An established third-party logistics provider (3PL) can handle all of your inventory for you without you having to manage storage, take deliveries, pick and pack the products, organize and sort everything.
If you face any of these eight big challenges too often when managing your own warehouse, it might be time to talk to a 3PL about options to help support your business.
1. The Land and Warehouse Layout
Owning real estate is a valuable asset, but in some areas of the country it’s also tremendously costly. Plus to build up your land and space in order to maximize its function would likely be a pricey endeavor. If you have the capital, make sure you factor in efficient storage systems, as well as racking and pallet layouts. Receiving areas need to have the necessary space to allow for fast delivery operations. And it’s important to decide what type of picking systems you are going to employ in your warehouse to fill orders as they come in: automated, robotics, manual, etc.
Good communication is one of the key functions of a smooth and efficient warehouse supply chain, and because of this it is important to set up your methods to maximize productivity. People involved in every aspect of warehouse operations need to be able to communicate their decisions quickly to one another. If they aren’t it can seriously hinder your ability to execute on quick picking, packing and shipping. To maximize effective communication you will need to figure out the right software, applications, internal tools and more that are necessary to run your warehouse. It all comes down to process, and every process needs to flow easily within the space they support.
3. Inventory Tracking and Forecasting
Your products must be stored in the properly identified areas of your warehouse. There are many pitfalls that you will encounter that cause a breakdown in this process such as inaccurate purchase orders or receipts. Your staff needs training in how best to handle these issues as they arise to ensure that they don’t cause delays in your supply chain. One of the best ways to track your products is inventory management software. It can operate throughout every area of your logistics process to help keep accurate inventory counts and help you plan for how much you need to keep on hand at a given time. The downside is that it often takes a significant investment in both the software, as well as the time it takes to train all of your employees on how to use it properly.
4. Time Management
In order to have efficient time management, it is important to establish all of your procedures for order fulfillment. The processes of picking, packing and shipping should be laid out as efficiently as possible so that they don’t cause you to lose money due to delays or worker overtime. All of the various internal departments need to be organized to take the guesswork out moving along the supply chain from beginning to end.
5. Customer Relations
In today’s world of order fulfillment, customers have come to expect that their orders will arrive as quickly as they want, even the day that they order. Accuracy and timing are important, but what is more imperative is that you can provide adequate customer service to set expectations and keep your customer informed as their product moves through the chain toward them. And if customers feel they are not taken care of in this manner, they may leave your brand for another, or leave negative feedback online about your brand. Keeping your customer-facing technology tool up to date will help, just as much as keeping your warehouse inventory accurate, so that delays, shortages, or stock outs don’t occur, will help too.
6. Picking Optimization
One of the best ways to speed up the picking process is to use a scanner or application associated with a smartphone instead of manually entering the SKUs for all of the products associated with an order. This eliminates human error and helps to keep an up-to-date accounting of inventory as well. It is also important to consider how your products are stored within the warehouse. Using shrink wrap or lamination can cause errors when you are scanning barcodes. The more automated processes that you employ, the more optimized your warehouse picking operations will become.
7. Damaged Products
In any warehouse operation, when items are damaged or broken it can lead to significant cost overruns as well as inventory shortages. Some damage is inevitable, but if you use the proper management techniques it can be significantly reduced. You need to make sure that none of your pallets have broken planks or nails that protrude. All pallets have to be stacked and loaded correctly to avoid possible damage. In order to maintain safety of not only your products, but also your workers, a well run warehouse must be properly lit, cleaned frequently, and organized so that shelves and racks don’t wind up being overloaded.
8. Product Demand Changes
There is an enormous amount of factors that could potentially cause a fluctuation in demand for your products. Changes in the weather, economy, consumer consumer confidence, as well as holiday buying trends could all work against you and make your most in demand items suddenly stuck in your warehouse taking up valuable space and costing you money. Because of this, it is important to have the most up to date and accurate information to help forecast demand and track trends as far as when your products fly off the shelves and when you might experience a downturn. These things can’t always be planned for, but if you can factor in what you can it can minimize your exposure to these trends.
These are just some of the most common challenges that you will face running your own warehouse. You might run into others such as inaccurate purchase orders, having redundant/overlapping processes, and needing to diversify your products. Operating a warehouse can be frustrating and costly. If you are overwhelmed by reading this it might be worthwhile to consider utilizing a 3PL to outsource your warehouse operations.
If you are looking for help deciding if you should outsource your warehouse operations, we would love to hear from you. You can read DCL’s list of services to learn more, or check out the many companies we work with to ensure great logistics support. Send us a note to connect about how we can help your company grow.