At the heart of distribution is the warehouse. Warehouse operations and the efficiency thereof are “make it or break it” for the success of an organization. If warehouses aren’t efficient, productive, safe, or don’t use technology appropriately, they run the risk of losing the company both income and credibility.
It takes the right mix of all these ingredients to create the well-oiled warehouse. We’ll look at several over the next few months, but for this blog, we’ll focus specifically on some tips for improving warehouse efficiency.
Go Lean in Warehouse Operations Practices
In manufacturing and business, “lean” is the concept of doing more with less by cutting out unnecessary steps, reducing waste, and automating wherever necessary. Lean produces highly efficient processes. Warehouses began as storehouses of goods. With the growth of the globalized marketplace, warehouse operations have expanded significantly. Everything from high-level inventory management, quick turnaround receiving and shipping, and accurate pick and pack services is now included in warehouse operations.
When those operations run lean, it opens up the opportunity for long-term and sustainable savings, starting with time and resulting in money. Think about how one change can have far-reaching effects: Warehouse organization can improve pick and pack times, scanning or voice-activated devices can improve accuracy which then directly impacts the frequency of returns and improves the perception of customer service.
Educate, and Then Educate Some More
You can have the most efficient warehouse and distribution setup in the industry, but if your employees don’t understand those setups, all that efficiency potential is lost. It’s important to train employees so they understand the technology available and how they’re expected to use those tools. Training can also help promote safety, which reduces accidents on the floor and in turn contributes to improved efficiencies and innovation.
Change the Channel to Omni-Channel
Despite Amazon feeling like it’s always been around, ecommerce was still new even a decade ago. When ecommerce was in its first years, there was often separation in warehouse and distribution centers between what was ecommerce inventory and what was brick-and-mortar retail inventory. An emerging trend is now multi-channel—also known as omni-channel—fulfillment centers that handle the inventory, fulfillment, and distribution for all channels under one roof. Inventory for brick-and-mortar stores is on the same floor as the inventory for the ecommerce sales. Omni-channel distribution and fulfillment centers are driven by inventory efficiencies, but also leverage the efficiency of a common labor pool.
Know Your A-B-Cs
Inventory categorization is probably one of the more popular ways of drastically improving distribution efficiency. ABC categorization involves assigning hierarchy to your inventory items based on their dollar value. A-level items are priority stock or big ticket items that need to be tightly monitored since they bring in the most money. Generally, these items are kept in smaller supply and access is locked down.
C-level items have lower value, but larger volume. B-levels sit in the middle. Once levels are assigned, you’ll want to establish a stock review and reorder cadence for each level. Due to their high cost and shorter supply, A-level items will need more frequent reviews to maintain enough inventory. Accordingly, C-levels do not require nearly as much, and B are right in the middle. Implementing the right technology will allow you to review and monitor your stock trends for accurate inventory and future planning.
Drive Efficiency With Accounting Systems, Inc.
Review the efficiency of your distribution often. One inefficiency can be rather far-reaching, and often an inefficiency is revealed to be a problem in the system, which may require a revamp of the entire process.
It sounds like a lot, but you don’t have to do it alone. Accounting Systems Incorporated is committed to driving efficiencies in organizations so they can realize their best profits and results year over year. Whether you’re looking for a Sage or Acumatica ERP solution, ASI works with the unique trends of your organization to ensure that you have the right—and fully customized—software package on hand to drive the best efficiency in your warehouse. Find out more by clicking here or calling us at 803-252-6154.