Challenges posed by the complex warehouse management environment and how they are met

Posted on 2021-06-21

Rina Redelinghuys, CQuential WMS Customer Services Executive reveals the challenges posed by the complex warehouse management environment and how they are met.

I have worked in this industry for many years. The one thing that I can attest to is the speed of change and the impact this has on warehouse managers who are mandated with continuously looking for ways to improve and become more competitive. There is an ongoing trade-off to drive service excellence while maintaining operational costs to deliver against customer expectations.

The following are the main objectives of the modern warehouse:

  • Increase operational efficiency
  • Reduce costs
  • Efficient utilisation of space/labour and machinery
  • Meeting customer expectations.

In a series of articles, I will share tips around how the warehouse manager can achieve operational goals in the shortest timeframe.

The following areas will be discussed:

  1. Ways to reduce warehouse costs
  2. Theft prevention
  3. Warehouse optimisation
  4. The importance of master data
  5. Warehouse design and layout.

Let’s start with – Ways to reduce warehouse cost

Supply chain professionals constantly search to find ways to reduce the overall cost of getting products from source to consumption – warehousing is no different. It requires the warehouse manager to take a holistic view of the operation to drive cost reduction within the facility.
Having said that, it is also important not to favour short term measures over long term sustainability and growth. It’s recommended that warehouse management executives still need to invest in new technology and infrastructure if they are to remain relevant and competitive in the long term. This investment will ultimately drive down costs and improve efficiencies.

To achieve overall cost reduction, the following areas should be considered:

Inventory Visibility – Visibility of the operation and inventory is critical to drive down operational costs. The benefits of improved inventory visibility are the following:

  • Increased operational efficiencies
  • Accurate demand forecasting
  • Optimal stock levels
  • Smart resource deployment
  • Greater supply chain transparency
  • Successful demand fulfilment
  • Lower warehouse costs

Storage Optimisation
The objective of any operation is to utilise the full cube of the warehouse. This will drive down the storage cost per item, which in turn reduces the overall landed cost to the customer.

There are several options that a warehouse manager can explore to improve the utilisation of the warehouse:

  • Reduce aisle width in racking
  • Increase the height of the racks
  • Explore different racking configurations (mezzanine/block storage/VNA/gravity feed racks/pick face vs bulk)
  • Improve slotting at the time stock is put away
  • Add half pallets to locations
  • Warehouse flow
  • Product placement
  • Retrieval methods

The storage setup needs to be reviewed continuously to ensure the business gets the best utilisation of the warehouse space over time.

It is also important to contract services from a warehouse specialist regarding designing a layout that aims to drive storage optimisation. The specialist will be able to validate the current storage setup versus industry standards and suggest a layout that will work for your specific operational needs.

Cross Docking
Cross docking is the transfer of product from the supplier directly to the customer reducing the need to store and handle the stock during the fulfilment process.
This type of model is well suited to the following operations:

  • Perishable stock that requires immediate shipment
  • Products that are pre-ticketed and ready for sale
  • Products that require a fast turnaround time
  • Products that are sent to a central distribution centre and then distributed to individual stores.

The Benefits of cross docking:

  • Reduced order turnaround time
  • Improved customer satisfaction levels
  • Reduction in labour costs due to no put away and picking required
  • Reduction in warehouse space requirement due to lack of need for product storage.

Cross docking removes the storage link which eliminates the storage component within the supply chain. This type of model works and if implemented correctly will have a significant impact on cost reduction across the supply chain.

Catch my next piece which will reveal what is part science, part creativity – effective slotting.

For more information contact us on 011 712 1300; email or visit our website

Copyright - 2021 - All Rights Reserved. CQuential Pty (Ltd)
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram