There are two basic assumptions about warehouse management: Most people think their competitors have about the same level of automation and that any changes, especially in technology, will be disruptive. The first assumption means that shippers think the warehouse management cost ratios are about the same across the industry. But today, with shrinking or nonexistent margins and extreme pressures for cost cutting, even small changes can make the difference between contributing to the bottom line and becoming a huge drag on the company.

The second assumption is equally out of date. If youre not looking at better ways to do things, youre not moving forward, and youre not helping your organization find new efficiencies, many of which are easy to implement and sometimes free. One of the best ways to cut costs and increase efficiency is to just look at the next step in automation.

Steps to Improvement

If youre relying on someone else to know where everything is, youre a train wreck waiting to happen. Begin barcoding and tracking your stock today. Look at your processes to see how your information and products flow. With the minimal cost of entry-level barcoding systems and the free opportunities offered by looking at your processes, there is no excuse to not get started.

If youre at the level where you barcode and control 100 or more items a day, take the next step by moving toward an inventory control and warehouse management system (WMS). This means using either a PC workstation and/or portable scanners to record when inventory is added or pulled. You can run batch reports once a day or on an as-needed basis to get a snapshot of your situation. This simple step enables you to have the infrastructure in place to pass information back through your purchasing, production and billing systems, which pays dividends well beyond the minimal cost of entry.

After you have data capture and inventory control systems in place at one location, its time to roll them out to your other warehouses, if you have them. Even if you dont, look at the feeder operations: parts finishing, for instance, or your pallet or crate storage and staging areas. If you bring those operations into the mix, you will have that much less to manually track.

Adding other locations doesnt have to be just about data collection; it can be as simple as adding remote label or order pull ticket printing at the warehouse or loading dock. You can also create multiple labels or pull tickets for drop ship orders being filled at various locations. Think about your operations and visualize the ways that this relatively simple data collection and management function can be applied to your business. By taking advantage of a corporate intranet or standard Internet configurations, you can set up these remote facilities with off-the-shelf applications. This minimizes the demands on IT staff resources.

Another step is to move to a real-time system that dynamically feeds information to other corporate systems. If you can take a step out of purchasing or billing, or if you make your shipping operation a little more automated and less prone to error, youve saved the company money, made your company look that much better to your customers and made your job easier.

Once data is captured in a standard format with the appropriate systems integration help, it can be shared with other applications, whether it be Microsoft Excel, Quickbooks, a WMS or a SAP enterprise management system. Even if its only a one-way feed into the accounting or management application, its still a major step up from manually collecting the information and re-entering it into another report or spreadsheet.

Why RFID Makes Sense

It makes sense to look at RFID this year if youre controlling over 1,000 items per day or have high-cost items in your inventory. Barcode labeling programs are set up to print RFID tags now. Printing manufacturers are coming up with combined, human-readable, barcode and RFID printing systems, and most importantly, the cost of the RFID tags themselves is coming down. Here again, you have a range of ways you can use the technology from simply moving items in and out of a warehouse to being able to immediately locate individual items in a warehouse by using a radio grid.

The beauty of RFID labels is that they can be updated throughout their lifecycles. For instance, if a pallet holds 50 items that are going to be picked and packed for several different customers, the pallets RFID tag can be updated each time items are removed. This enables you to have an accurate count of the remaining stock at any given time, without having to access a computer database. RFID can even be used on trucks, so you know exactly which truck was loaded with the item.

The next step, of course, is combining RFID and robotics for automated pick-and-pack systems. No one would argue with the fact that automated systems are expensive, but if the operation is large and the costs high, theyre worth examining. An automated system, integrated with an enterprise management system, can bring incredible efficiencies, not only in warehouse man-agement and shipping but also to inventory, purchasing, billing and production information systems across the enterprise.

The ultimate, at least for the foreseeable future, is tying all of these into an Internet-based system for real-time customer feedback, automated order tracking and delivery confirmation. It can be done via Web sites or e-mails. Some of the larger, more sophisticated companies are making strides in this type of extended distribution information system.

Is Outsourcing an Option?

Another way of doing business that may be a radical departure from your current operation is outsourcing. Do you really need to be running your warehouse and shipping operations in-house? Weve heard about logistics companies that handle the entire operation. Some of these are the large shippers like FedEx or UPS, and there are other service companies or smaller regional specialists that can also take on these operations in your own facilities. These companies have the experience and the systems to take over the day-to-day operations and to let you concentrate on managing. Often, because of their expertise and flexibility, these companies can handle the warehouse and shipping functions for less than you can in-house.

All of us tend to get so close to our day-to-day tasks that we forget to step back and objectively look at the way we do things. If we do that every once in a while, we will discover incremental or radical changes that we can make to improve the cost effectiveness of our operations to contribute to the bottom line. Simply looking at your operation can save you money. Thats what management is all about taking a fresh look and making decisions to fundamentally improve the areas we manage.

Mike Strand is the director of Business Development for data collection at Teklynx International. He can be reached at mike_strand@teklynx.com or 800-552-2331. Information about Teklynxs data collection offerings is available at www.backtrackgroup.com.