Warehouse management is rarely a simple process. Understanding what the facility’s layout should be takes time and careful consideration of the items you’re currently storing. However, there are many steps you can take to more effectively run a warehouse. Every action you perform to successfully manage your warehouse should focus on efficiency. An efficient warehouse reduces your overhead costs and helps you get items out of the door at a faster rate.
When you’re creating a warehouse design, there are many components you must pay attention to. Along with the warehouse layout, you’ll need to identify what types of technology will be implemented in your warehouse to enhance efficiency and productivity. In this guide, you’ll learn about five key strategies that can be employed to run a successful warehouse that helps you reach your business objectives.
1. Goal Setting for Warehouse Success
Before you begin to transform your warehouse into a more efficient and effective space, you should first focus on setting goals and aligning them with your overall business objectives. During the goal setting process, it’s highly recommended that you use the SMART methodology, which is designed to ensure your goals are actionable. The SMART methodology is:
With this approach, you should be able to set reasonable goals that you’ll likely achieve when designing your warehouse. You should also consider operational performance when creating your key performance indicators (KPIs) or warehouse goals. In order to obtain customer-facing KPIs, you’ll need to work on perfecting cycle timing, order fulfillment, on-time shipments, and growth potential.
When you’re attempting to improve your facility’s efficiency, you must take labor productivity, order efficiency, and warehouse costs into account. You can properly use your assets and manage supplier KPIs with a focus on technology requirements, cash flow, overflow storage, product spoilage, and warehouse throughput. All of these factors are important aspects of managing a successful warehouse and setting the right goals.
If you want to make sure that your KPIs and goals are properly tracked, you should implement a feature-rich Warehouse Management System (WMS). A WMS is a type of software solution that makes it easier for you to maximize your space and labor usage while also optimizing material flows and resource usage.
2. Effective Staff & Labor Management
It’s not always easy to properly manage your staff and labor expenses. However, doing so will help you keep costs down and more effectively use your personnel. When managing your staff and labor, focus on optimizing workhouse productivity while reducing costs at the same time. Keep in mind that labor oftentimes costs at least 50% of your operational expenses, which is why optimizing labor is essential.
Likely the easiest way to boost productivity without increasing costs is by utilizing a WMS solution that allows you to track and improve productivity. Tracking warehouse productivity allows you to make quick alterations that remove any inefficiencies. The changes you implement can focus on providing rewards for efficiency and safety, reducing turnover, and improving career satisfaction.
You should set specific standards for operational activities and incentivize great performance. When people are rewarded for delivering better results than anticipated, it inspires other personnel to work towards the same goal. The right WMS solution gives you the ability to monitor how quickly tasks are completed with real-time data. You can also make adjustments to ensure a fair performance assessment.
During this process, consider temporary staffing, possible overtime, and project staff requirements. Understanding every portion of your staffing ensures your management solution is as effective as possible. Whenever you can, try to involve your workforce in feedback and idea generation. Communication channels should remain open if you want your workforce to be as committed to improving warehouse efficiency as you are.
3. Putting Customer Expectations at the Core
Experts throughout the warehouse industry believe that successful warehouse optimization is obtained by keeping the customer at the forefront when making any business decision. This is an omni-channel, hyper-connected world, which means that there are many options available to potential and current customers. If you don’t maintain customer satisfaction, they can move to another company with ease.
Make sure that you also use the latest technology to stay competitive. These technologies make it easier to meet and manage customer expectations. The modern customer wants the process of having an item delivered to be as efficient and affordable as possible.
Today, many manufacturers offer eCommerce solutions with free delivery and direct fulfillment. While you may be unable to offer everything that a larger competitor provides, your customer service should always focus on doing what you can to keep your customer base loyal. By maintaining a strong reputation with your existing customers, it’s easier to appeal to new ones.
There are numerous things you can do to manage customer expectations, the primary of which is using new technologies in your facility. While there are many options at your disposal, one technology that’s highly reliable and effective is artificial intelligence (AI), which you can use to perform data analysis and demand forecasting. With this tool in place, it’s possible for you to predict how sales trends will fluctuate in the coming months and years. Once you have access to this data, you should have everything you need to make sound business decisions that drive your company to success.
Even though cost is a major factor when you’re searching for the right technologies to add to your facility, deciding not to install a WMS can be highly expensive. After this management system is installed, you’ll have the tools you need to reduce customer service resources, which is done by lowering the number of customer complaints that are sent in and reducing how much resources are spent managing out-of-stock items. Eventually, customer satisfaction will improve when your service is effective and complaints happen less frequently.
4. Embracing Technology & Making Investments
As touched upon previously, every modern warehouse needs to embrace technology and make smart investments if they want to garner long-term success. For instance, you should consider investing in a world-class WMS and following global best practices when it comes to using this system.
While these systems work well with inventory tracking, they aren’t limited to this functionality. You can also use the data you receive to make proactive decisions and improve your processes. By gaining access to this feature, you’ll have complete transparency when it comes to the processes in your warehouse and how effectively they are being managed.
Data gives you a better idea of what changes you can make to your warehouse operations. It also allows you to perform continuous changes as opposed to being reactive. You shouldn’t only be reacting to inefficiencies after they’ve caused you to lose a considerable sum of money.
The algorithms that make up this software tell you where you’re wasting time while also providing you with suggestions on how to better allocate labor and bolster security. Once you make the necessary changes, you should benefit from streamlined operations, lower expenses, and improved efficiency.
Optimizing warehouse processes should also help you reduce the number of backlogs that occur in your facility. You should notice that your customer service has been improving as you’ve optimized warehouses processes. When you install a WMS in your warehouse, you’ll be able to optimize and automate nearly every facet of your supply chain, which makes the process much more accurate.
5. Staying Ahead with Warehouse Management Trends
You’ll find it much easier to maintain a successful warehouse by staying ahead with the latest warehouse management trends. Like most industries, the warehouse and distribution center sector is changing rapidly, which is why it’s highly recommended that you embrace automation, AI, robotics, and other advanced technologies. These technologies will be the driving force behind many of the trends that take place for the foreseeable future. A WMS gives you the ability to implement most of these systems, which is why you should make a WMS the cornerstone of your operations.
This year should provide additional advancements in enabled sensing, adaptation, and machine learning. For instance, fully automated systems are capable of placing last-minute orders. At the moment, technological advancements are centered around delivering a more logical presentation of the data from this technology and making sure that these systems are easier to use by all types of businesses.
The modern customer no longer has any tolerance for orders that are either incorrect or running late. Once you’ve placed a WMS in your facility, you should benefit from better return-to-inventory management and higher inventory accuracy. By remaining up-to-date with industry trends, you’ll likely have everything you need to remain competitive with the biggest players in your industry.
In conclusion, running a successful warehouse requires setting clear goals, investing in new technology, effectively managing your staff and labor, prioritizing customer expectations, and remaining ahead of warehouse management trends. By implementing these strategies, businesses can optimize their warehouse operations, enhance efficiency, reduce costs, and deliver exceptional customer service.