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.

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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 info@cquential.com or visit our website www.cquential.com

Warehouse and inventory management are two crucial functions found in most supply chain companies. The competitive landscape is fierce, so it should be every business owner’s desire and ambition to get these two functions as streamlined and automated as possible.

In a recent article by NETSTOCK, they provided much food for thought on using solutions like spreadsheets to manage your inventory and warehouse. They explained why this is not sustainable or scalable for any business that intends to grow. We’ve collaborated on this article with Inventory Management experts NETSTOCK where we unpack symptoms that could indicate it’s time to look for a fit for purpose system in your warehouse and inventory divisions. This article will explore factors to take into consideration when investigating the vast number of tools and applications that are available, so that you can make the right choice for your business.

Identifying need

Let’s start by looking at your current systems and processes.

Inventory Management experts, NETSTOCK suggest that by answering the questions below in relation to what your existing inventory solution does or doesn’t provide, will determine whether you have a need that is currently not being met.

1. Do you waste capital by over-ordering inventory?
2. How often do you find yourself out of stock on certain items?
3. Do you have insight into your obsolete items so you can address ways to get rid of these?
4. Do you have sight of your sales data?
5. Do you have sight of your suppliers’ performance?
6. If you are currently extracting sales and supplier data from your ERP into a spreadsheet, how many hours every month/week does this take your staff to complete?
7. How do you know when you are low on a stock item? Do you get a system alert? Or find out when your customer is complaining or worse yet when you have lost the customer completely?
8. Are you able to forecast your demand using statistical analysis, or do you forecast using bits of data and a lot of gut feel? How accurate is that?
9. Are you able to do forecasts on new items? Or is this a thumb suck?

Now that you have a better understanding of your inventory management needs, let’s move on to look at your current warehouse management systems and see if they meet the mark.

We at CQuential provide some useful questions that you should be asking to help identify whether you have a need for a fit for purpose warehouse management solution.

1. Do you frequently run out of space in your warehouse?
2. How do you determine the most suitable storage location when putting away stock?
3. How do you allocate space? Do you randomly put items away, or do you utilize a method based on turn velocity or another metric?
4. How do you effectively manage stock rotation within your warehouse? Do you need to write off stock due to expiry?
5. How quick and accurate are your stock-takes?
6. How do you track your labor and operator performance?
7. Do you follow an optimal pick route?
8. Do you have visibility of your stock across the warehouse? Do you rely on certain individuals to locate stock within the warehouse?
9. Are you able to fulfill customer expectations the first time around?
10. How accurate is your picking OTIF Perfect Order rate?
11. How quick is your stock available to sell?
12. Are you able to identify stock and track the inventory through the warehouse?
13. Are you able to track stock down to a bin level/batch/serial?

At this stage you have most likely identified the need for one or both solutions – where to from here? There is a massive selection of available products, so it’s imperative that you have a solid plan in place before you begin. It’s critical to involve all the heads of your divisions, not only your warehouse and inventory management. Sales and marketing will have useful contributions to make, especially on the inventory management system requirements. Collaboration and communication are key.

Product research and investigation

Integration and technology

Your ERP system is the foundation of your finance and operations and should be factored in. Of course, if you are not satisfied with your existing ERP, that is an entirely different scenario, but if you are, you would ultimately want to choose solutions that already have an integration to your ERP. Even if your ERP is an on-premise ERP, it’s wise to consider cloud-based tools when managing your warehouse and inventory. Cloud-based systems not only cut down on your IT expenses, but they give your staff 24/7 access to your operations. As we have all seen with the COVID19 pandemic, being able to carry on business functions remotely is of utmost importance.

Product selection

You have narrowed down your choice of platform to cloud-based solutions and identified the players in the market for these solutions, now you can go deeper into product features, functionality, and capabilities.

By answering the questions below, you should be able to eliminate some products from your list and be left with a few to investigate further.

1. How long has the product been in the market?
2. Does said product have representation in your country? Being cloud-based, it’s not critical, but it can be an advantage.
3. Are there customer testimonials/references?
4. Are there any 3rd party reviews on software review sites such as G2 or Capterra?
5. How expandable or scalable is the system?
6. How often are there new releases or feature updates?
7. What is the product roadmap for the next 12 months and beyond?
8. What is the product’s online reputation?
9. What is the product’s social media reputation?
10. How is their product priced? How will this impact your business model, i.e., is it priced per user, per location, per company?
11. What type of help is available? On-demand training videos? Online help?
12. Are you locked into a long-term contract, or is it month by month?
13. Is the product intuitive and easy to use?
14. Is the product able to easily integrate with other solutions within the company?

Finding the right Solution Partner

By now, you probably have one of two possible product offerings that fit your requirements and budget. The next step is to select a Partner that you can work with to provide the implementation, training, and ongoing service and support.

Many product vendors deal directly with the end customer, but if they don’t and instead use a partner network, they should be able to make recommendations. They know their partners’ strengths and weaknesses and can recommend ones they feel would be a good fit for you in your industry and your company culture. If this is not an option, get online and research partners for yourself.

Most partners will have online demos, but consider asking for a personal demo either online or physical if time and location permits. Keep your requirements gathering simple at this stage. A full-blown set of system specifications takes a significant amount of time, effort, and skill to put together. You can delve into the detail later when you have narrowed down your list of options.

Take the following into account and rate them accordingly:

1. How quick was their response to book a date and time for the demo?
2. Did they keep the appointment?
3. Did they conduct a discovery call before the demo to determine your needs?
4. Did they demonstrate the product according to your needs?
5. Did they customize your demo to be specific to your business/industry?
6. Did they answer all your questions and handle any objections?
7. Are they knowledgeable in the inventory and/or Warehouse management space?
8. Did they send a personal followup ‘thank- you’ email or call?
9. Did they follow up a few days later to check-in and see if you need any other information?
10. What services and technical support do they provide, and how is this charged?
11. Do they provide training, and what charges are associated with this?
12. What is there online and social reputation?
13. How many customers do they have?
14. Do they have customers in the same industry as yourself?
15. Are they able to provide you with customer references?

The way the demonstration is handled pre, during, and post, will be a direct representation of what you can expect if you were to select them as your partner. Although this is not a necessity, it will help if your chosen partner has the same outlook towards running a business that you do. How do they approach customers? Are they proactive? How do they communicate? How agile or rigid are they? Do your business objectives align with theirs?

The final step is to firm up on your full set of system specifications. Make sure that these are thoroughly identified and agreed upon and that the partner can deliver on them. Select an employee that will be dedicated to managing the full project. Not only from the implementation and sign off but also from the entire change management process with users and all relevant stakeholders. If you put the right steps in place, with a well-thought-out project plan, there should be few disruptions to your business.

Once your users have settled into the new systems, and you start to see the dramatic improvements in efficiencies as well as the financial ROI and time savings, you will wonder how you ever operated without your new tools and technology.

Talk to us at CQuential and start your journey towards finding the right Inventory and Warehouse solution today.

For more information contact us on 011 712 1300; email info@cquential.com or visit our website www.cquential.com