Warehouses and distribution networks are key assets for any supply chain. Because of this, organizations are recognizing the need to streamline processes within the four walls to increase productivity and efficiency while reducing cost. There are a few reasons why a streamlined warehouse is so critical:
1. Labor availability – the distribution labor market is tight, so warehouse operations need to maximize the labor they do have.
2. Labor flexibility – the cost to employ is rising, and warehouse associate turnover is at 43%, according to the U.S. Bureau of Labor Statistics. Learning where processes can be automated to reduce reliability on labor is critical.
3. Operational cost increases – the cost of materials and building are increasing, so maximizing the value of a smaller warehouse footprint will offer huge dividends for your bottom line.
Now that we have determined why it is so important to streamline your warehouse configuration, let’s talk about the three pillars that will make your warehouse stand out from the competition.
Pillar #1: Vertical Configuration
Organizing space vertically is a great way to maximize your warehouse’s footprint. Rather than keeping all of the product and assets within the warehouse on ground level, building out platform changes in key areas will provide several benefits.
The most obvious gain from optimizing your warehouse for vertical configuration is enabling more product to be stored in a smaller amount of space. Warehouse space holds a lot of capital, so maximizing a smaller footprint will decrease overhead cost and increase efficiency. The less space your warehouse takes up, the less ground your workforce will have to cover when picking product.
Another efficiency gain from vertical warehouse configuration is enabling a shift from a person-to-goods system to a goods-to-person system. With the right software and automation in place, products can be brought to the associate, who can then complete a put rather than a pick. This not only speeds throughput, but also increases labor efficiency, therefore alleviating the impact of the current labor shortage and decreasing operational costs.
Configuring your warehouse for a more vertical layout will require certain software and automation systems. This brings us to the second pillar of a streamlined warehouse configuration: automation.
Pillar #2: Supplemental Automation
In order to realize the benefits of vertical configuration in your warehouse, you will need to supplement the layout with certain software and automation. For example, implementing goods-to-person robotics, conveyance and elevation technology will transform static locations within your warehouse into mobile locations that will increase labor efficiency, optimize processes and speed up throughput.
With robotics and other automation tools in place, the warehouse will need a very sophisticated software system, such as a warehouse execution system (WES), to manage all of the now moving parts. A WES takes a warehouse control system (WCS) and integrates warehouse management system (WMS) capabilities to create a best-of-both-worlds solution. This would provide automation control functionality, wave management, light task management, inventory management, picking and shipping and more.
Once you have your warehouse configured vertically and enabled with the necessary automation and software systems, you will want to ensure you’re using that space and technology efficiently to maximize business success and customer satisfaction.
Pillar #3 – Advanced Inventory Planning
One of the many challenges that warehouses have faced since the beginning of 2020 is matching inventory levels with demand. Having too much of an item that isn’t selling will negatively impact your bottom line, while not having enough of an item that is experiencing high demand will negatively impact the customer experience and loyalty.
Because many organizations were suffering from a lack of inventory during peak seasons due to a volatile supply chain environment, many began to invest more into their warehouses to build out infrastructure to support a backstock of inventory. This advanced inventory planning saves immense stress and scrambling during peak seasons when it can be difficult to get the right inventory in on time.
The right material handling system, integration, software, and operational processes will need to be designed in advance to create space required for this excess inventory and longer storage periods while ensuring it is ready to pick when needed.
At the end of the day, a streamlined warehouse configuration with the above three pillars is what will set your organization apart from the competition in all areas, from throughput time to customer experience and overall profitability. A warehouse that has optimized the productivity of its existing workforce, minimized the need for additional labor, especially during peak periods when labor expansion is more common, and maximized the value of a smaller footprint is in a much better position to handle the curveballs that will undoubtedly be thrown their way.
Greg Meyne is Senior Director of Automation at enVista. During his more than 25 years of experience in the technology and material handling industries, Greg has gained immense expertise in designing and implementing hundreds of material handling systems based in automation, manufacturing, supply chain management, warehouse operations, and process improvement while also assisting clients with omnichannel transformation.