How to solve the Top 7 Warehouse Management challenges of 2020
Warehouses find themselves in increasingly dynamic environments as remote events in the 2020 global supply chain make their impact felt on local businesses. The best approach for longevity and sustainability for your warehouse when dealing with these challenges is by ensuring you have flexible and scalable processes in place that abide by industry best practices.
Warehouse managers should monitor and track changes in the business environment and adopt responsive solutions, but this is all much easier with a) the right information in your hands and b) a handy solution.
Common warehouse problems in 2020 see erratic demand, varied labour requirements and costs, and inaccurate inventory information, all requiring robust systemic solutions to keep managers on top of changes and aware gaps that require attention. Warehouse managers need to be able to juggle maximising performance while balancing trade-offs under uncertain conditions.
This article examines the top seven warehouse management challenges in 2020, and their solutions.
1. Inventory Inaccuracy
Accuracy and efficiency in handling inventory in warehousing go together, but more so in a world that sees customers wildly buying all the toilet paper in Australia overnight to South Africa shutting down the alcohol industry. Inaccurate inventory causes problems such as maintaining improper stock levels and buildups of obsolete inventory. These in turn lead to picking problems when pickers rely on inaccurate information, leading to inefficient processes. Other impacts of inaccurate inventory include lowered productivity, increased expenses, and corresponding lost revenue.
Solution: Automated systems offer real-time, accurate information about stock levels and composition. The technology employed in managing inventory in a warehouse is critical to success because the value of the automated system is just as good as the quality of the system itself.
2. Redundant Processes
Traditionally, warehouse employees have been likely to handle a product several times due to the nature of the warehousing process… and then Covid hit. Once a notable redundant process in warehouses is where warehouse workers pass the same ticket through multiple hands, this has suddenly become a health risk and needs rapid reassessment.
Solution: While necessary in some instances, such redundant procedures are time-consuming and not only increase the cost of labour, but create a health and safety risk. Using barcode technology streamlines the warehousing process, removing redundant processes while maximising resource utilisation. Automated systems are evolving fast, and global trends are compelling warehouse managers to maintain up-to-date systems to rapidly adapt to ensure they thrive, not merely survive.
3. Poor Warehouse Layout
Efficient use of space is a critical success factor in warehousing in 2020 where we are trying to do more with less. Inadequate storage space as well as inefficient use of available spaces are common problems in warehouses with poor facility layout. Undesirable warehouse design is a major concern for managers as there is a direct correlation to a potential negative impact on profits.
Solution: Optimal warehouse layout considers both the floor space and the vertical space available for use. In addition to maximising the use of space, a good layout maximises the use of equipment and labour, accessibility to all items, the security of all items, and safety of staff. Employing forklifts allows for a configuration that maximises both the total horizontal and vertical space.
Complementary solutions include ensuring that your highest-selling inventory is easily accessible, and streamlining dock-to-stock processes.
4. Erratic Demands
Fluctuations in demand are posing serious challenges for warehouse managers. The dip in sales due to the recent global financial crisis resulted in major cost problems for warehouses due to increased inventory levels on some levels, while on others PPE suppliers suddenly found themselves scrambling to fulfil.
While this has not affected all industries equally, the problem highlights the challenge of managing fluctuations in demand due to external forces beyond the warehouse’s control.
Solution: Managing seasonality in demand requires timely and accurate information about manufacturing, retailing and the industry. Information gaps between the warehouse and other relevant entities or the industry limit the ability of the distributor to monitor and respond to changes in demand effectively.
Managing a pandemic requires intuition and a rapidly adjustable system! It is necessary for warehouses to use timely and accurate information in planning and forecasting demand as well as in providing supply chain visibility.
Rearranging the products to match changes in demand helps minimise the negative impacts of seasonal demand. Such a rearrangement involves correct positioning of the items by placing the products with high demand during the current season at the front of the picking aisle and at the correct height.
Accommodating erratic demand, however, goes beyond just layout and picking. The problem also requires proper management of transportation networks and strategic sourcing of transportation services. These long-term solutions build a lasting capability with strategic value for the distributor.
5. Labour Costs
Excellent warehouse managers strive to increase productivity while minimising labour costs in a labour-intensive environment; these costs can constitute about 65% of the operating budgets of most warehouses.
Typically warehouses use expensive equipment and employ large labour forces, presenting a challenge that is for the most part unique to warehousing operations. The staff ranges from cleaners and packers to managers and administrative personnel.
Suddenly warehouses needed to adjust shifts, ensure social distancing, AND account for fluctuations in logistics while managing a vulnerable workforce.
Solution: Attempts to reduce the cost of labour should take into consideration the impacts of the move on other costs. The two major strategies for addressing labour-related problems include maximising available labour and replacing labour with automated systems.
Developing the right mix of expertise through workforce planning helps managers hone the skills necessary for successful labour force practices.
A combination of the right skills and motivation, through practices such as excellent working conditions, training and flexible hours, enhances employee productivity and the performance of the warehouse.
6. Picking Optimisation
Is your picking strategy holding you back? If you’re struggling to improve operational efficiency, a small change like tweaking your picking process could go a long way towards boosting both your productivity and your bottom line.
Picking is where the majority of warehouse management problems occur, but this issue is often a result of mistakes during receiving or put-away tasks. Poor picking can easily disrupt an inventory control system when the tasks and decisions engaged in on a daily basis are done in a hurry in order to assist the urgent customer in a tense environment.
Solution: Radio frequency and voice-directed systems are becoming widespread, but some small operations continue to rely on a paper-based system. Regardless of which type is used, the important part is to ensure full compliance with the system, even when circumstances arise that make compliance seem counter-intuitive. Dedicated attention to master data will help to keep the system accurate and reliable.
When exceptions occur in the system, such as offering an approved substitute item or finding a wrong item in a slot, these exceptions must be recorded to allow a full and accurate record of the inventory. A variety of different types of errors can occur in picking, such as noting an abundant amount of an item, but being unable to use it because it is already spoken for on back orders.
7. Quality Control
In many cases, workers in charge of quality control also do the picking, packing and shipping of inventory items, so many errors never get found until they arrive at the customer. This is especially prevalent in a pandemic environment where warehouses are trying to ship more with less staff available.
Solution: Ideally you need a separate level of quality control to ensure better inventory management and supply chain issues. This separate level of authority can often provide the motivation to manage everyday inventory issues in a structured manner that encourages accountability.
A quality control function can record vendor accuracy, improve stock rotation and reduce the need for manual processing of warehouse items. Quality control systems ensure that the rest of the warehouse management program is functioning as intended.
Warehouse management is commonly associated with four core elements. However, the underlying processes are complex and dynamic, not to mention the global politics at play. Combined, this unique environment has presented major problems for warehouse managers across industries and continents.
Distributors have had to deal with trade-offs due to resource and logistical limitations, leading to poor performance in key functional areas and a fight for both relevance and survival.
To ensure the flexibility required to navigate any storm you need to consider a holistic system - the more updated your WMS technology, and the more transparent and accessible your data is, the more you can reduce these risks and have a consistent dependable warehouse that staff and customers can find maximum efficiency and trust in.