Warehouse Initiatives for Improvement 2022
“79% of companies with high-performing supply chains achieve revenue growth superior to the average within their industries,” concludes a global analytical study by Deloitte. Though the idea of warehouse Initiatives is not exactly new, it’s important to consider what high performers are doing because amid some of the obstacles companies are facing in the supply chain, efficiency is essential.
The warehouse is integral to your company’s supply chain flow by facilitating storage, packing, and shipping functions.
Unfortunately, warehouse management is a logistical problem for many companies. Some of these logistical problems are common across most warehouses in many industries. Fortunately, there are practical solutions to most of these problems, and implementing them would have impressive results for your supply chain.
7 Common Warehouse Management Problems
Here is a comprehensive overview of seven common warehouse management challenges and their effects on your company’s supply chain. This guide also includes practical warehouse initiatives to fix these problems and make other improvements.
1. Inefficient Space Utilization
The industry is already struggling with space shortage. A recent report published by Supply Chain Quarterly reveals that the U.S. will need to add 330 million square feet of warehouse space by 2025. Sadly, this is a partially self-inflicted problem, considering that most warehouses utilize only 68% of their storage space.
It is also advisable to install a Warehouse Management System (WMS) and an Automated Storage and Retrieval System (AS/RS). A WMS system can recommend and generate a 3D model of your warehouse’s optimal layout based on its measurements and inventory. An AS/RS system automates the put-away and retrieval processes.
Warehouse workflows often require performing multiple operations on one product. For example, products undergo inspection before packing and storage. Unfortunately, lack of organization often results in redundancy, such as inspecting the same product multiple times or picking various products to fulfill one order.
Redundancy wastes time and labor and can delay or disrupt the supply chain. Notably, redundancy is more prevalent in larger warehouses with a lot of inventory.
Optimizing warehouse workflow organization is the best way to eliminate redundancy. For example, barcode technology can track all items picked for order fulfillment and update everyone involved in order fulfillment. Notably, SKUs are some of the trending warehouse initiatives. Overall, it is advisable to implement a Warehouse Execution System (WES).
3. Unsatisfactory Order Management
Order management is one of the most common and complex functions in warehouses. It involves several functions, including picking, packing, and shipping orders to customers. It also accepts order requests and handles post-sale issues such as returns and refunds.
Unfortunately, errors may also share across different order management and fulfillment stages. For example, workers can pick, pack, and ship the wrong order. Notably, most order management and fulfillment errors usually necessitate repeating the whole process, wasting time, labor, and other essential resources.
Fortunately, you can streamline the order management and fulfillment processes using an order management system. Most systems offer features that help with the entire order management process, from ticket creation to delivery. Notably, most systems feature inventory management solutions.
4. Poor Inventory Management
Inventory management is an integral aspect of warehouse management. Every operation in the warehouse entails moving the inventory around, and a lack of organization usually creates many problems.
For example, misplaced inventory is a common problem in many warehouses, and it usually results in wasted time and labor trying to locate the missing item. Failure to track inventory is also a common problem across many warehouses, and many don’t realize when they have insufficient or surplus inventory when accepting or turning down orders.
Good inventory management requires a holistic solution based on factors such as your warehouse’s size and the nature of your inventory. Implementing automation solutions such as order management and warehouse management systems is advisable.
5. Unreliable Damage Control
Damaged products are a common problem in many warehouses, especially those that deal with fragile and heavy-duty items. Damages compromise the products’ quality and value. Notably, selling damaged items also damages the company’s reputation and results in returns and refunds.
Unfortunately, it is improbable to prevent all damages to your inventory. However, you can implement safety measures to minimize damages. For example, you can ensure that all walkways are clear and well-lit to reduce the likelihood of your staff accidentally dropping items. You can also install anti-slip tape on shelves and guard rails to prevent things from slipping and falling. It is also advisable to conduct regular inventory inspections to identify damaged products.
6. Excessive Labor Costs
Labor costs account for 50-70% of the average warehouse’s budget and expenses. Unfortunately, many warehouses pay more than necessary for labor – sadly, they still don’t get enough value for their money. Two underlying reasons are excessive reliance on manual work and employees’ limited productivity.
Automation is the best way to minimize labor costs in any industry. Unsurprisingly, automation is also one of the leading warehouse initiatives in 2022.
Contrary to the widespread assumption, automating a warehouse is not more expensive than hiring manual labor. Automation is considerably cheaper in the long term, and machines are ultimately more reliable than humans. Warehouse workers have a 43% turnover rate, while machines work continuously without training or benefits.
7. Failure to Prepare for Seasonal Demands
Demand for certain products fluctuates depending on the season. For example, Christmas decorations are in high demand in December, while demand for clothes and food remains consistent throughout the year. Unfortunately, some warehouses are usually not prepared to take on excessive orders for in-demand products as the seasons change, resulting in confusion and lost revenue and opportunities.
Demand forecasting is an excellent technique to determine seasonal products and adjust your inventory. It is also prudent to store in-demand inventory in strategic locations to make it easier to retrieve.
Optimize Your Warehouse’s Storage
Does your warehouse need more space? You can optimize your current space usage using creative storage solutions such as our warehouse bins. These bins maximize your shelf storage space and offer other notable benefits, including facilitating organization and preventing accidents. Get in touch today to learn more about how our warehouse bins can help optimize your storage space.