If you could focus your attention on one area of your business and positively impact nearly every metric of it, would you do it? From productivity to planning to margins and resources, making a few simple changes in one functional location could lead to significant positive outcomes.
As you have likely guessed, that area is the warehouse. A warehouse in Cincinnati or anywhere around the world is a tricky operation. At first, it seems straightforward. You store products on your shelves until they’re needed. At a certain time, a team member picks the required product and prepares it either for use or for distribution. Pretty simple, right?
Without structure, your employees may perform redundant tasks, dragging down your productivity.
However, if you’ve spent some time studying your warehouse, you may know how complicated the operation can be. The search for products can lead to a massive time waste for your team members. You may lack visibility into the inventory, leading to poor purchasing and production decisions. Without structure, your employees may perform redundant tasks, dragging down your productivity.
The good news is that many warehouse issues can be solved with simple fixes. At Deufol Cincinnati, we manage more than 100,000 square feet of warehousing space for our industrial customers. We’ve seen many of the issues industrial companies face with warehouse management. Below are three of the most common problems, along with the most effective solutions.
Issue #1: Your labor costs are exorbitant for warehouse personnel.
Technology is quickly changing the need for personnel in the warehouse. The most technologically advanced companies are testing with artificial intelligence for picking functions. However, most of us still rely on manual labor for shelving products and for picking.
Very often, that manual labor can become a drain on productivity and margins. In reviewing the labor costs, you may notice that the hours for warehouse personnel seem out of balance. The warehouse requires an excessive amount of labor, but you can’t seem to pinpoint the exact reason why.
If your warehouse labor costs are high, the problem likely lies in two key areas: the warehouse layout and the systems in place. The warehouse layout may not seem like an obvious factor on labor costs, but its impact can be substantial.
For example, you should make your high-volume products the easiest to access. Similarly, place the products that you need less often on the shelves or racks that are more difficult to reach. Plus, categorize products in some intuitive, logical fashion, making it easy for team members to track it down.
Systems can also impact labor costs. Are you still using a manual system to manage your warehouse? That’s probably creating redundancies in your process. Software and technology can eliminate those repetitive tasks and help your team locate items faster, reducing the need for labor hours.
Issue #2: You aren't certain of your inventory accuracy.
Inventory levels and transparency doesn’t just affect labor costs. It also impacts your working capital and your ability to serve customers. You may even understand this from experience.
Assume you have a part that’s needed to manufacture an important product. If inventory falls low and you’re slow to reorder, you may run out of the part. That could limit your ability to continue production.
With the right high-tech systems in place, you should be able to see all of your inventory levels in real time.
On the other hand, you could order the part before it’s needed, creating excess inventory in your warehouse. You have a great deal of it available, but that excess inventory represents wasted capital. Instead of purchasing the unnecessary inventory, you could have put those funds toward more pressing items.
Solution: Technological systems
An inaccurate warehouse is largely a symptom of a bigger problem: a lack of systems. Warehouse technology has advanced to a point where this kind of inaccuracy shouldn’t happen. With the right high-tech systems in place, you should be able to see all of your inventory levels in real time.
For example, for our industrial warehouse customers, we use a barcode scanning system. When products are added to the shelf, they’re immediately scanned. That scan is reflected in the inventory count in the system. Similarly, when inventory is pulled, it’s also scanned, reducing the inventory level.
That means you can see your real-time inventory with just a few clicks. That helps you gain transparency and inventory accuracy, and it eliminates incorrect purchasing or production decisions.
Issue #3: You’re running out of space.
Space is a precious commodity in most industrial facilities. You need to maximize profit from every square foot. While the warehouse is important, it doesn’t drive revenue the way production lines do. To stay competitive, you’d likely prefer to allocate space toward production rather than warehousing.
Unfortunately, you may be in a situation where the warehouse is limiting your ability to expand in other areas. You’d like to allocate less space to the warehouse, but you also need room to store products.
There are a few ways to solve a space limitation problem in the warehouse. Some of the already-mentioned strategies, such as optimizing the layout or implementing technology, can have a big impact. An optimized, technologically-advanced warehouse is usually a lean warehouse, which often translates into a reduced need for space.
However, another option is to outsource your warehousing in Cincinnati to a trusted partner. The partner stores your products in their facility, packing and shipping them as needed. You leverage the partner’s team members, square footage, and technological capabilities.
Warehousing is a function that seems simple at first but can quickly become complex. If you’re struggling with exorbitant warehouse costs, limited capacity, or a lack of transparency, you may be better served with a partner who specializes in warehouse management.