Warehouse management systems are crucial to overseeing large global product portfolios. In the age of big data, it seems like there's little that cannot be optimized through data crunching and meaningful applications of information insights. Warehouse management is no exception. In the case of massive supply chain systems that include hundreds - if not thousands - of stakeholders, quantity breeds quality. The ability to put real-time information about operational processes directly toward their improvement opens many doors for supply chain leaders.
Of course, the influx of data as a solution raises expectations. Consumers place more demands on supply chains than they did previously, and there are more regulatory, security and environmental concerns to take into account than ever before. A warehouse management system can help companies turn data quantities into operational quality, but it all centers on the effectiveness of its deployment and utilization.
Saving thousands per year with warehouse management tools
The potential successes of a thriving warehouse management system are tangible. To cite one example, the Port of Tyne, one of the oldest and most highly trafficked commercial sea ports in the United Kingdom, predicted that it would save more than $116,000 (£70,000) a year through its warehouse management system, according to Insider Media Ltd. The port's software, which it has used since 2001, features automated customer charging processes, a more accurate billing module and more efficient, effective product storage. It enables port operators to keep track of its 53,000 pallet locations in real time, using much more reliable and secure electronic tracking tools.
"Previously, we used manual processes when it came to charging customers and we had concerns that we were not capturing everything," said Graeme Hardie, Port of Tyne head of operations logistics. "The original system was vulnerable to human error but now everything is automated so we capture charges in real time. We have better visibility and can see and monitor our incomes instantly."
The next step for port logistics personnel could be software used to connect the databases they use for transport and container management. This effort would provide even more data interoperability that could help them to continue making the port a more productive, profitable place to store and transfer goods.
Answering the call to today's biggest warehouse management challenges
Globalization enables supply chains to grow, but there's always a danger that they could become bloated. A process of tacking on additional facilities, stakeholders and logistics facets can leave a supply chain difficult and expensive to manage. It can also decrease its ability to respond to market changes or external events, including those wrought by the weather, the availability of key materials, an increasingly digital consumer base or economic changes.
Supply chain bloat forces organizations into a "business as usual" approach that can quickly derail when the unusual occurs. The Port of Tyne, which switched its primary shipping concern from coal to cars over the last several decades, as demand for the former dwindled and the latter swelled, knows full well that external sources can vastly alter business models. A reactionary approach to changing warehouse management demands is not an effective long-term strategy. A proactive perspective can be driven by quantity and quality of data-driven decisions.
Efficient supply chains can start in the warehouse. The actual storage and movement of goods is either the direct cause or a contributing factor to supply chain bloat, as methods in place due to tradition or initial convenience can be ill-equipped to do more than simply maintain the status quo. It's also likely that different warehouse management strategies persist on the stakeholder or single facility level. Even personnel at one warehouse could employ multiple variations on a widely used technique. Attempting to solve problems or accelerate operations for 10 facilities while taking 10 different approaches into account can cause persistent headaches.
Managing stock effectively is necessary for the success of all front-end operations, which are increasingly convoluted as e-commerce becomes more prominent. While the short-term costs of implementation may give some companies pause, its long-term gains make the investment quickly pay for itself - as long it is deployed correctly.
How to find the best warehouse management solution
Organizations have to sift through the options available to find the one that makes the most sense for their needs. Supply & Demand Chain Executive contributor Simon Sterland recently highlighted a few techniques enterprises can employ as they search for the right solution:
- Focus on the long term: Concentrating on the short-term effects of a warehouse management system can cause a business to fixate too closely on the upfront deployment costs, as was mentioned previously, but can also steer them down the wrong planning path. Projecting what the organization will look like five to ten years down the road can help decision-makers find a solution that responds to its greatest perceived challenges. If uncertainty persists, it's important to find an option that is adaptable and versatile enough to change as the business does.
- Establish a project team: Sterland recommended finding a "project champion" who can spearhead the investment opportunity. Then, the company should build a group that includes IT personnel, logistics leaders and people working in the warehouse. This has a valuable short- and long-term benefit. Upfront, it allows for a dedicated team to concentrate on implementation as their main activity, instead of as a side project. It also diversifies the input that goes into the selection process. Thinking long term, it establishes a group of employees well-versed in the solution selected and able to articulate its business case to other personnel.
- Recognize the value of a business partnership: The warehouse management solutions provider should be a company that can readily accommodate every need. Working with a vendor that has a similar business ethos and approach to innovation can make this investment more than just a purchase. Forming an alliance can help the organization better communicate its warehousing challenges and objectives. This enables the provider to customize its management solution to address the areas that need the most short- and long-term attention.
Warehouse management systems enable companies to optimize their fulfillment process through centralized resource management and more efficient workforce. Picking the right option is that critical first step to enjoying the productivity and profitability that data-driven management provides.
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