Warehouse management may seem simple or straightforward, but the underlying processes are complex and dynamic. Warehouse managers are presented with many resource limitations, issues and errors every day, which lead to them make trade-offs in order to keep the warehouse running smoothly. Warehouse managers need to maximize performance while keeping all systems as efficient as possible. Even the slightest alteration to your warehouse management strategy can have a big effect on your overall business. This post evaluates five common warehouse management problems and offers solutions to help resolve them.
Traditionally, products were passed through a long chain of warehouse employees for picking. A products might pass through the line several times due to the nature of warehouse processing, which is redundant, time-consuming, and increases the cost of labor. Using barcode technology will streamline any process involving inventory tracking, and eliminate the pick line redundancies of the past. Automation is an evolving innovation that can maximize resource utilization and keep systems updated in real time.
Seasonality of Demand
Fluctuations in demand pose serious challenges for warehouse managers. The dip in sales due to the recent trade war has resulted in major cost problems for warehouses due to increased inventory levels. Although it did not affect all industries alike, the problem highlights the challenge of fluctuations in demand due to forces outside the control of the warehouse.
Managing seasonal demand requires accurate information about manufacturing schedules, retail (promotions, marketing, etc) and the industry trends in general. An information gap between the warehouse manager and the rest of the business leadership will limit the ability of the warehouse to monitor and respond to changes in demand effectively. An easy fix to this problem is quarterly forecasting for your product demand. By getting really detailed in your forecast (day-by-day sales projections, segmented by sales channel) you will be able to build accurate sales trends over time.
In terms of inventory management within warehouse processes, rearranging the products to match changes in demand will help minimize the negative impacts of seasonal demand. Rearrangement involves correct positioning of the items by placing the products with high demand during the current season at the front of the picking aisle and at the correct height.
Seasonal demand issues also require proper management of transportation networks and strategic sourcing of transportation services, which are longer-term solutions that will build a lasting capability within your warehouse processes.
Poor Facility Layout
Efficient use of space is a critical success factor in warehousing. Inadequate storage space and inefficient use of available storage are common problems in warehouses with poor facility layout. Poorly configured warehouses can lead to negative impacts on profits.
An optimal layout will include both the floor space and the vertical space available for use. In addition to maximizing the use of space, a good layout maximizes the use of equipment and labor, accessibility and security for all products. Using forklifts that reach the roof of the warehouse allows for a configuration that maximizes both the horizontal and vertical space.
Another solution is placing the highest-selling product inventory at the most accessible point of the warehouse for faster picking.
High Labor Costs
A typical warehouse uses expensive equipment and employs a large labor force, which means warehouse managers wrestle with the challenge of balancing a streamlined labor budget with a high functioning workforce. A warehouse staff includes everyone from cleaners and packers, to managers and administrative personnel. Attempts to reduce the cost of labor should take into consideration the impacts on the warehouse systems and the other personnel. The two major strategies for addressing labor-related problems include maximizing available labor and replacing labor with automated systems.
Developing the right mix of expertise through workforce planning helps managers hone the skills necessary for successful labor force practices. A combination of the right skills and motivation, through practices such as excellent working conditions, training and flexible hours, enhances employee productivity and the performance of the warehouse.
Accuracy and efficiency of inventory systems is a huge part of warehouse management. Inaccurate inventory causes problems such as maintaining improper stock levels and buildups of obsolete inventory. Picking problems also arise when pickers rely on inaccurate information, leading to inefficient processes. Other costs of inaccurate stock information include increased expenses, lost revenue and low productivity. Automation is a key factor in solving accuracy-related problems.
Automated systems offer real-time, accurate information about stock levels and composition. The technology employed in managing inventory in a warehouse is critical to success because the value of the automated system is just as good as the quality of the system itself. A low-quality system retains some of the risks associated with inaccurate inventory. A careful and informed selection process reduces the risk of procuring an automation system that does not meet the needs of the warehouse.
“Physical inventories are always a tedious task, something you dread doing. We can either have DCL do it on our behalf and send us a report, or when we want to be personally present and really confirm everything ourselves, just come to the warehouse to do it. It’s as easy as calling up my account manager, I think two days in advance, and saying ‘Hey can we come down for 4 hours, later this week?—it’s that simple.”
A Better Option
Partnering with a third-party logistics provider (3PL) for your warehouse management is an all encompassing solution that could help to resolve many of the issues listed above. They have both the experience and the expertise to effectively manage your inventory, shipping, picking, as well as all other aspects of your supply chain. and the scale to adapt to changes in the global marketplace. Instead of struggling to implement warehouse management best practices yourself, you can outsource to a 3PL so you can focus on other areas of your business.
Warehouses face increasingly dynamic and complex challenges, especially as the global supply chain becomes faster and more connected. The best approach to dealing with your warehouse challenges is to employ sustainable best practices that will help your overall business in the long-run. Warehouse managers should monitor and track changes and adopt responsive solutions as issues arise.
If you are experiencing warehouse or fulfillment related problems and are considering outsourcing to a 3PL we would love to hear from you. Send us a note to connect about how DCL Logistics can help your company. You can read DCL’s list of services to learn more, or check out the many companies we work with.