The Importance of Efficiencies in Warehouse Operations
A Closer Look at Warehouse Logistics
With the skyrocketing costs of fuel and raw materials, coupled with labor shortages and supply chain snafus, many business owners and managers are finding that they are able to find efficiencies within their warehouse walls. Competition will continue to be fierce, but the savvy warehouse manager can look into the various warehouse operations to cut costs and sweeten that bottom line. Even the smallest tweaks in warehouse operations can have a huge impact on profitability if done correctly.
When we think of warehouses, we usually consider all the processes that take place at the facility. In a well-functioning warehouse, processes from receiving to shipping and every function in between run smoothly and efficiently. But in a warehouse with one bottleneck or poor functioning component, processes can fall apart pretty quickly.
What Is A Warehouse?
The Oxford Dictionary defines a warehouse as “a large building where raw materials or manufactured goods may be stored before their export or distribution for sale.” However, those of us in logistics know that it is no longer just four walls with some product stored inside. Modern warehouses offer additional value-added services so that they make the most of their warehouse real estate. And with improvements made to equipment and storage components, warehouses have been able to optimize space, increase efficiencies, and create more accurate inventory management. The efficiencies in storage allow for streamlined product handling and movement throughout the facility.
Depending on the industry, warehouse types may vary. Though each type has its unique characteristics and serves a specific purpose, they have many of the same processes, systems, and problems. Some of the types of warehouses are:
Public Warehouses
Government maintained but available for use for businesses and individuals
Private Warehouses
Large retail firms or manufacturers usually have their own warehouses for the storage of their goods before distribution.
Smart Warehouses
These warehouses use artificial intelligence (AI) to handle all or most of their warehouse functions. AI or smart warehouses require a substantial capital investment but are said to reduce inventory errors, reduce labor costs, and speed up the delivery process.
Consolidated Warehouses or Distribution centers
Consolidated warehouses and distribution centers store products from several suppliers and distribute them to common customers saving on delivery costs and expediting shipping. Customers pay the center and avoid large expenditures in building their own warehouses.
There are also warehouses that deal with specific storage requirements, such as data storage, climate control, frozen storage, coops, and facilities dealing with international imports and exports.
How Vital Is The Warehouse in Getting Goods to Consumers?
There are a number of ways that warehouses are vital in getting goods to consumers. An efficiently-running warehouse system allows for consumers to get their goods in a timely manner. Warehouses can optimize shipping costs by combining shipments to keep the cost of goods down. Warehouse errors and damage are minimized, and proper and efficient storage aids in the fulfillment process can reduce lost or stolen merchandise during handling. When your customer is able to receive their product as ordered, companies benefit from customer satisfaction and repeat sales.
The role of warehousing has never been more important. With the increase in e-commerce, warehouses have become central for fulfilling customers’ ever-increasing demands. With the onset of some large retailers offering deliveries, often on the same day, warehousing in all industries is forced to step up in whatever way possible to increase efficiencies while remaining cost-effective. Today’s consumer demands require warehouse management to use the best means possible to rise to the occasion.
The Operations within The Warehouse
Receiving
Receiving is the initial phase of warehouse operations, making it one of the most important. During this operation, raw materials or finished product is received against a purchase order or other record and verified for accuracy. At this point, the product is also checked for damage that may have occurred during shipping or prior handling.
Put Away or Storage
In some larger warehouses, these may be separate functions, but for many, this function is done by an operator, either human or robotic, that places the product in its storage location. The placement of the product will be determined either by warehouse software or a designated person. Depending on the product received, the storage may be done on shelving, racking, or in high-quality storage components that will keep the product protected and organized.
Picking
Once an order is placed, pickers will go to the designated warehouse location to begin retrieving the product and ready it for shipment. Many of the warehouses using artificial intelligence, will digitally instruct robots to go to specified locations to retrieve the product. Other warehouses may manually pick, or pick with the help of material handling equipment.
Shipping and Dispatching
The final step in the warehouse operation is dispatching and shipping the order. Once the order has been picked, it can be placed on the dispatched transport for delivery. This could be by truck, delivery van, rail, or even customer pick-up. Some warehouses may have their own delivery options while others outsource carriers.
Inventory Management
This function is ongoing during the entire warehouse operation. Depending on the product or industry, product rotation may be required. There are also some items that are date or season-specific. Some items must be managed throughout the entire process due to safety or health concerns.
Value-Added Functions
Some warehouses provide value-added functions. Some of these processes include kitting and dekitting, casing, specialty packaging, and other added functions specific to the product or industry.
Warehouse Management Is Essential
Your warehouse is essential in managing your supply chain. Determining where to make the most cost-effective changes is vital to the future of your warehouse. Making sure your employees are well-trained, getting the best logistics software you can afford, and investing in the best storage materials for your industry are easy ways to optimize your warehouse functions. We can help. Call us with your questions about storage solutions today.