After the holidays, warehouses should think about the difficulties and things they have learned. Warehouse utilization rates and storage space typically have taken a hit. Additionally, layout and material handling equipment changes become apparent.
The holiday season places unique demands on warehouses and distribution centers. It is a time when increased order volumes, labor shortages, and inventory challenges become the norm. To make matters more complex, these challenges can escalate in a short time frame, leaving little room for error. A proactive warehouse will use this time after the holidays to make important changes in warehouse management. They will not focus on past errors and dwell on mistakes.
This article will explain how to utilize what you learned during the holiday season to improve your warehouse throughout the year. We'll help you improve your supply chain by solving labor shortages and optimizing inventory practices for efficiency and resilience.
Focus on Product Slotting to Improve Efficiency in Order Fulfillment
One of the greatest opportunities is to reprofile the picking locations and focus on product slotting. This will help to improve efficiency and reduce some picking errors. Reflect on the following from holiday:
• Identify where you had congestion and bottlenecks during picking.
• Consider what caused the congestion, was it the design, slotting, or combination of things.
• What caused your picking errors at peak times?
Implement changes to address these issues in order picking. Begin by focusing on the top 20% of products from a velocity perspective, also known as the Pareto. It is vital to have the right stock levels for each SKU to minimize excessive stock replenishments.
Efficient inventory management and slotting can significantly impact order accuracy and overall efficiency during the holiday rush. As part of the slotting process, consider which products should be slotted together for ease of picking. This effort should also consider items that should be slotted together regardless of velocity.
Also respect the “golden zone” to minimize injuries from repetitive reaching and bending. This also applies to heavy and bulky items. These should be placed in optimal locations to reduce injuries.
Utilize a warehouse consultant to assist with identifying ways to improve your picking packing and shipping processes.
Consider New Equipment or Automation to Support Warehouse Operations
Peak times always put a spotlight on warehouse utilization and warehouse capacity issues in addition to equipment problems. At times, the lack of maintenance also becomes apparent during peak volumes. Assess your warehouse operations in the following way:
- Are you using the right lift trucks and pickers to support your operational needs?
- Is your warehouse storage sufficient to support the inventory volumes?
- Were you trying to support all your storage and picking needs with just pallet rack, and ran into problems?
- Are you using the vertical space appropriately, or can your warehouse utilization be improved?
- Were your current conveyors and automation insufficient or break down regularly?
- Could you have benefited from some level or automation or conveyors but don’t know where to begin?
Now is the time to make these larger, more time-consuming, and costly changes to the operations. This will ensure you are ready for peak volumes this year. A warehouse automation consultant can help you to understand what options to consider, and what the benefits and payback will be.
Utilizing the right equipment is paramount to efficient warehouse management. Don’t consider warehouse automation to be the thing that fixes all your operational problems. If it is the wrong approach, it will be the costliest mistake you have made.
If your existing equipment, conveyors, or automation is breaking down all the time, is it time for an upgrade? Are you performing sufficient maintenance to keep your investment operating at peak? Should you consider certain upgrades, or do you know if you can upgrade certain aspects?
Downtime now is far more tolerable than down time at peak season because of maintenance issues.
Consider How the Right 3PL Can Alleviate Operational Pressures
For many companies the idea of investing in a new WMS, equipment upgrades or automation, and labor are too much stress. For some companies, it’s a need to be closer to the customer to reduce time in transit and freight costs. The problem is in opening another distribution center, staffing and the capex to outfit a new facility.
This is where the right third party logistics 3PL can be a significant benefit to your operations. Whether it’s a cross docking operation, or full order fulfillment, 3PLs can help alleviate operational constraints. 3PLs can provide real time inventory and robust distribution systems. Additionally, 3PLs shoulder the labor challenges as well as investments in pallet rack and warehouse automation.
This improved supply chain management will lead to improvements in customer satisfaction.
Focus on Warehouse Management Labor Issues
One of the most challenging aspects of any distribution operation is hiring, training, and managing warehouse labor. Consider the following aspects as you reflect on peak volume challenges.
- Can the use of equipment or automation reduce the need for headcount in the next peak season?
- Could you improve the training, training materials and videos, or onboarding process with seasonal hires?
- Were the trainers effective, or should you make a change before the next peak season?
- How would a change in the overall flow to the warehouse layout and design improve worker productivity?
- Would your operations benefit from a change in the shifts or start times to accommodate a changing workforce?
Evaluate the Effectiveness of Your Warehouse Management System
So much of what happens in warehouse operations is dictated by the warehouse management system (WMS). This can be a good thing if your company has invested in good technologies.
Unfortunately, so many companies are struggling operationally due to poor systems. The wrong system will significantly impact your ability to efficiently manage inventory and customer orders.
Implementing a new WMS or inventory system is a certainly a longer time horizon than other initiatives. However, ignoring or delaying these system projects can be a severe competitive disadvantage. Internally assess your systems and capabilities in an objective way, including:
- Is the current order volume easily managed by your WMS, or are there performance issues?
- Can it scale to handle future volumes or new lines of business?
- Have you easily integrated your WMS with other systems, or do you still have a lot of manual entry and rekeying?
- Can you support barcoding today, or are you still paper based?
- How easily can you create intuitive batches of orders for efficient picking?
- Is your receiving process intuitive, guiding workers through ASNs, receiving and the required inspection process, managing exceptions, and putaway process?
- Do you have inventory accuracy problems with no way of easily identifying the root causes?
- How easily can your system handle various channels such as D2C, B2B and Amazon orders?
- Does your system easily support returns processing and management?
- Can you easily manage storage locations and assign SKUs and tasks to locations?
Taking the time to reflect on peak will make it easier to create your road map of what to focus on quickly. Some changes will take months to complete and delaying a decision may mean missing another peak season.
To ensure your warehouse operation can handle the increased demand, you must take proactive steps now, both in the short-term and long-term. By embracing maintenance, optimizing inventory practices, planning for labor, considering automation, and collecting valuable data, you can navigate the holiday rush successfully.
Moreover, don't forget to look beyond the current season and focus on long-term improvements to strengthen your warehouse's capabilities for the future. To explore customized solutions for your specific challenges, schedule a free consultation with one of our warehouse consultants.