An efficient warehouse is critical during turbulent times and for customer satisfaction because it helps ensure quick, accurate shipments. During this current challenging times, supply chain leaders must not make hasty decisions and must focus on the long term of their business and the supply chain. How do you keep your supply chain moving?
The most common mistakes supply chain leaders must avoid right now are:
1. Not rapidly cutting costs and securing more cash.
Purchased and supply chain costs typically account for 50-80% of global manufacturers’ total cost structure. In the immediate term, supply chain costs will increase as manufacturers expedite shipping and pay overtime labour costs to meet customer commitments. However, leaders must improve cash flow and bolster working capital now, in order to provide greater financial flexibility going forward, by:
- Lengthening payment terms on all non-essential items. Even by a few days can make a big impact.
- Postponing or cancelling capital purchases.
- Being more forceful about what the business needs versus what the business wants.
- Discontinuing low-running SKUs and engaging suppliers to offer discounts on the remaining business.
- Linking cost-reduction programmes to real, measurable EBITDA outcomes.
2. Not accelerating supply chain agility.
With access to supply dominating the headlines, there will be a tendency to avoid making hard choices to increase supply chain agility. Leaders need to accelerate plans to diversify supply chains geographically and avoid a total loss of supply in the future. These shifts are not quick, but steps need to be taken now to build agile supplier partnerships and infrastructure.
3. Not prioritising sustainable and structural cost advantage.
While immediate, draconian cost-cutting initiatives will provide short-term results, companies find that they’re not sustainable. To create structural cost advantages, augment the traditional source-to-pay process with “budget-to-pay”. This will enable procurement and finance to check every request/requisition for budget availability prior to committing spend to external suppliers, and drive cost control and financial discipline aggressively.
If you’re looking for some tips to improve your warehouse operations and to keep your supply chain moving, consider the following:
1. Maximise and optimise all available space
Rather than expand the footprint of your warehouse, consider better use of vertical space. Adding taller storage units and the right equipment to pick and store material can help you keep more in the same square footage, rather than adding expansion costs. In addition, think about the type and variety of shelving used. Storing small items on pallet racks wastes space, and makes it easy to misplace items. Rather than using the same racks throughout your warehouse, you may need various types of shelving for different materials. Also, try using standardised bins to help keep shelves neat and orderly and keep your supply chain moving .
2. Lean Inventory
Adopting lean inventory for your warehouse is just as important as it is in manufacturing. The basic premise of lean is only what you need, and nothing more. Possibly reduce or eliminate safety stocks, and try to get suppliers to deliver smaller quantities more frequently to keep your supply chain moving.
3. Adopt enabling technology
A warehouse management system (WMS) or an ERP system with a strong WMS module can improve efficiency by suggesting the best routes and methods for picking or put-away. In addition, the system provides automated pick lists that can be sent to mobile readers and devices to help eliminate mistakes and reduce wasted time and paper. Your warehouse will be neater and greener and it will keep your supply chain moving . Using barcode or radio frequency identification (RFID) readers can improve accuracy of transactions, and reduce picking errors. In fact, research shows that using RFID increased inventory accuracy by 27% in just 13 weeks.
4. Organise workstations.
Organising workstations improves productivity because workers do not have to search for tools or equipment. Use the “5S” method from lean manufacturing to ensure your workstations are as organised as possible. It consists of: Sort; Set in order; Shine; Standardise; and Sustain — all techniques designed to keep clutter at bay, reduce errors, and improve safety and organisation.
5. Optimise labour efficiency.
If your WMS doesn’t have the ability to generate efficient picking plans, create them manually. Analyse your material usage patterns, and store high-volume items together near the front of the warehouse to eliminate travel time. Also, store items that are frequently sold together near one another. Basically, you will streamline operations if you try to keep the items you pick most often in the most accessible locations to eliminate picking delays.
Improving warehouse efficiency is as much about common sense to keep your supply chain moving and the right storage equipment as it is about fancy picking algorithms. Follow these simple steps on how to keep your supply chain moving and watch your efficiency soar.
Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.
Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.
ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.