Warehouse & Distribution Centre Optimization

In today’s scenario warehouse and distribution leaders are facing a lot of challenges, to overcome these challenges they will be needing a well-balanced and holistic approach logistics management which can potentially help them save money and improve the efficiency.

Warehouse & Distribution Landscape:

The warehouse & distribution landscape took a dramatic change in 2020. A global pandemic leading to a massive surge in e-commerce, and quicker delivery expectations converged to create a “perfect storm” for product-centric companies. Due to these sudden increased pressures all these companies are in need of a bigger warehouse, distribution, and highly skilled logistics managers who can effectively orchestrate global supply chain activity.

Asked to move over from office environments or other departments, many new managers lack the expertise to be able to run high-velocity fulfilment environments. The main underlying fact is that today’s warehouse and distribution leaders are facing new challenges. As said before to meet these challenges, a well-balanced and holistic approach logistics management which can potentially help them save money and improve the efficiency.

Warehouse & Distribution Planning:

The global pandemic urged for a “repositioning” trend, whereby the new managers have taken on the monumental job of running the entire warehouse and distribution operation. This trend has been taking place and is still in the evolution for several years, all thanks to the shift away from brick-and-mortar and over to online shopping and fulfilment centers.

After all the process is how difficult is it to unload trucks, store inventory, pack boxes, and then load them back up onto another truck? But any experienced logistics or warehouse manager will tell you that the process involved in those basic steps are challenging and must be well-orchestrated in order to be successful. Good planning is also one of the most important factors in the context where all the steps must be choreographed perfectly in order to meet customer demands perfectly.

So, as we discuss about the challenges faced by the companies there are some components that can help improve for an efficient Warehousing and Distribution.

The Three Pillars of Efficient Warehousing and Distribution:

In order to run an efficient warehouse & distribution center we required three basic components: expertise, cost management, and technology. When the companies effectively balance all these three components, they are just a step ahead in achieving operational excellence.

1: Warehouse & DC Expertise:

With the charge on managing a critical link in a manufacturer’s supply chain, the new and revised thinking of warehouse operations has three options for establishing the expertise that they need access it internally. 

1. The First is the third-party logistics [3PL] model. 
2. The Second is the model that finds companies handing over control of their fulfilment operations to a completely different organization. 
3. The Third is the fully automated Warehouse Management System.

2: Balancing Costs:

This component mainly involves in the balancing of labor, inventory, freight, and facility costs against budgeting requirements in today’s busy fulfilment environment.

Having the labor costs as the biggest expense for any fulfilment center, managers need help in recruiting and retaining their workforces. This is where many turns to temporary agencies that may fill positions on a short-term basis but do not take on the training and skill development to retain them, which is what a complete outsource. For example, companies like Canon has processes in place to efficiently recruit candidates who possess the right skill sets, and then it trains them in a way that supports reduced turnover and increases output. This is one expertise level which we saw in the warehouse and dc expertise.

Now talking about the second most cost consuming fact, the inventory front managers focus should be on storing goods as efficiently as possible and ensuring easy access to fast-moving products. Similar attention must be paid to the company’s technology investments, all of which should be producing a solid return on investment (ROI). 

3: The Technology Component:

Now-a-days warehouses invest a lot in automation and many of them realize that the selection process is not that easy as it looks on the surface. It’s particularly difficult for new warehouse managers who often lack hands-on experience with the fulfilment process, and probably they might not understand which applications does provide them consistent positive outputs talking in terms of automation technology for warehousing and distribution center.

In the recent years, companies are emphasizing more on investing in their warehouse and distribution operations by implementing new technology and equipment, this is the place where the vendors or providers of those technology have been whooping up daily. Having the knowledge and understanding of what technology is out there and what could work in a situation, and more importantly an eye for what makes sense from an ROI perspective are the must-haves right now. This is the place where companies must be very precise in in investing what is really necessary to get the right ROI out of their equipment, hardware, and software.

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