Supply chains are absorbing much of the shock of rapid peaks and drops in demand and product availability across manufacturing today. Manufacturers who are choosing to excel at warehouse management are absorbing the shock of record orders and sales on certain products and drastic drop-offs in sales of others. PwC’s latest research finds that the more manufacturers focus on excelling at warehouse management, the more resilient they become.
Getting warehouse management performance right keeps inventory handling costs under control while improving warehouse efficiency, leading to greater customer satisfaction because orders are shipping on time or early – delighting customers in the process. The following video explains how the DELMIAworks Warehouse Management System solves the complex challenges manufacturers are facing today:
The following are five strategies manufacturers can take to improve warehouse management performance today and grow more resilient in the process:
1. Define what success looks like for inventory and warehouse management in today’s uncertain environment as performance levels from the customers’ perspective first. In more stable times, warehouse management was measured in inventory turns and inventory accuracy. Given that uncertainty and even stock-outs in some industries are happening, it’s best to factor in how well customers’ delivery dates are met above all. No one wants to lose a customer because supply chains are so uncertain today. Using a warehouse management system to triage and prioritize which orders go out first will maker the difference between keeping a customer or not.
2. Do an audit to see how Pick, Pack, and Ship workflows can be improved at least once a quarter – getting that data is worth the effort as it provides a roadmap for improvement. Finding where piece, case, pallet picking, and mixed pallet workloads can be improved now has an immediate pay-off at improving warehouse management performance. Doing an audit every 90 days helps to find new areas for improving inventory efficiency, order accuracy while providing useful benchmark data to track performance gains over time.
3. Improve data collection accuracy by moving beyond manual approaches to barcoding or RFID if your supply chain supports it. Manually-based approaches to managing inventory are draining valuable time from warehouse management teams while often creating errors too. Expanding barcoding across every warehouse area pays with fewer pick, pack, and ship errors and improved inventory accuracy. Consider running an RFID pilot if your supplier supports it; there is a wealth of research showing how effective RFID is in reducing warehouse management costs while increasing accuracy.
4. Communicate with suppliers using EDI to share orders and forecasts every day to reduce the chance of stockouts and backorders happening when production needs materials to keep orders moving. Supply chains across manufacturing are experiencing the BullWhip Effect today as suppliers are constrained for the materials, components, and assemblies they need to produce products. the electronic component shortage in the automotive industry is a case in point. EDI is a cornerstone of warehouse management performance across automotive, consumer packaged goods, and many other industries. It’s helping manufacturers better absorb the shocks to their supply chains by having up-to-date supplier inventory and orders from customers, all leading to improved warehouse management performance.
5. Stage products based on velocity and usage history, tracking their activity in real-time. A proven way of improving warehouse management performance is reducing the time it takes to fulfill an order. One of the best ways to do that is to know which products have the highest velocity, and redesigning workflows to make those items accessible the quickest. Warehouse Management Systems can provide that insight in real-time and alert operations teams in warehouses of when a shift is starting to occur – saving hundreds of hours in the process.
All manufacturers are managing through supply chain disruptions, made more challenging by record sales levels on certain products and plummeting demand for others. Improving warehouse management performance acts as a much-needed shock absorber, bringing greater stability and consistency to every aspect of inventory management, order fulfillment, and shipping. These are just a few of the many benefits of improving warehouse management performance:
- Increase order fulfillment speed and accuracy while keeping order fulfillment costs under control
- Reduce and eliminate shipping and receiving handling errors
- Reduce the costs associated with under-utilized inventory resources
- Increase inventory visibility and traceability
- Improve the efficiency of raw materials, WIP, and finished goods inventory
Warehouse Management Systems (WMS) are going through an inflection point due to the constrained nature of supply chains today. WMS’ past role as a cost center is giving way to a more integrated, real-time role responsible for driving revenue and growth. New business models bring entirely new business challenges to WMS.
Moving from a manually based to digitally-driven WMS increases order fulfillment accuracy, speed, and scale while eliminating shipping and receiving handling errors. Relying on analytics, Business Intelligence (BI), mobile device technologies and real-time monitoring is decreasing costs associated with under-utilized inventories faster than expected while improving inventory visibility. WMS’ inflection point is also enabling a new era of real-time track-and-traceability performance not available before. By having analytics, BI and real-time data monitoring orchestrated to support new products and business models, WMS today can better optimize the movement of both raw materials, WIP, and finished goods throughout production.