When it comes to the warehouse, the No. 1 pressure on manufacturers is the need to decrease operating expenses. There are three main things manufacturers can do to improve warehousing performance, explain Scott Pezza and Nari Viswanathan, analysts with Aberdeen Group:
- the way they carry out individual processes;
- the equipment they utilize for those processes;
- the underlying software systems that support warehousing activities.
Being able to connect with your supply chain partners, gaining visibility over inventory and increasing efficiency in the warehouse, Pezza and Viswanathan observe, are common characteristics of a best-in-class warehousing operation. The trick is, how can manufacturers improve their own operations while helping their customers manage uncertain demand, and still control costs?
The key, according to an Aberdeen Group study of warehousing best practices, is to adopt more efficient order fulfillment processes, particularly by improving visibility to incoming inventory status. "For manufacturers, improved visibility allows for better planning of storage for materials needed for production," point out Pezza and Viswanathan. "Knowing the levels of available materials will allow for uninterrupted, on-schedule production, facilitating on-time delivery to downstream customers." Technology enablers to achieve that level of visibility include warehouse management systems (WMS), warehouse control systems, business intelligence and radio frequency identification (RFID).
The accompanying PACE (pressures, actions, capabilities and enablers) chart illustrates how manufacturers can progress from identifying a problem to focusing on a solution, and as a result become best-in-class themselves.
Pressures
- Need to decrease operation expenses
Actions
- Adopt more efficient order fulfillment processes
- Collaborate with customers to better predict fluctuations in demand
Capabilities
- Automated preparation of shipping documents
- SKU-level tracking of inventory control requirements
- Cycle counting
- Single point of contact for warehouse event handling
- Trading partner collaboration for visibility of inbound and outbound shipments
- Training resources available to staff for warehouse processes and technologies
- Centralized data repository
- Real-time confirmation and information gathering
Enablers
- Warehouse management systems
- Warehouse control systems
- Business intelligence
- Task management
- Labor management
- Slotting software
- RFID
- Yard management
- Carton cubing software
- Dock Scheduling
Source: Aberdeen Group
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