Find out how you can effectively scale and grow your warehouse operations, and ensure you continue to meet developing customer needs for years to come.
Changes in the UK retail landscape over the past decade have dramatically transformed the challenges facing those involved in warehousing, distribution and third-party logistics.
In part, these changes have reflected intensifying competition among retailers to offer consumers ever-higher levels of service – from end-to-end delivery tracking, to same or next-day delivery. But these are not the only factors that are putting warehouse operators under unprecedented pressure: the evolution of retailers’ own business strategies is also playing a significant part.
Increasingly, consumer-facing businesses in the UK are adopting an omni-channel approach to meet their customers’ requirements – so rather than limiting each customer interaction to a single point of contact, whether it is mobile, online or in-store, companies are using combinations of these in order to provide a more holistic and balanced service.
Raising the bar for warehouse managers
An omni-channel strategy can provide considerable extra value to consumers while also helping to maximise sales opportunities and, perhaps, increasing brand loyalty. However it has serious implications for warehouse managers and logistics firms.
Omni-channel order fulfilment introduces new complexities into the supply chain. Rather than simply providing distribution services for goods that are ordered online for home delivery, warehouse managers may now also be expected to deal with items ordered through a click-and-collect service. And this comes on top of meeting traditional re-stocking requirements. For warehouses, the most important issue is how to meet these different demands while continuing to operate efficiently and accurately.
For long-established warehouses one of the biggest problems in meeting the SLAs defined by customers lies in reconciling, integrating and updating a number of disparate back-office systems.
These may be based in a variety of locations (including multiple warehouses and locations), and may even be paper- or spreadsheet-based, or otherwise lacking in sophistication. For businesses which have evolved their distribution systems on the fly as their operating approach has developed, this is a common and significant concern.
Building on solid foundations
Trying to work with customers who adopt an omni-channel strategy – without the support of an overarching and capable warehouse management system (WMS) – can lead to serious problems, for both parties.
Failure to have clear visibility of real-time inventory levels and locations can lead to orders being delayed or going unfulfilled. Running warehousing operations off a number of incompatible systems can also result in major inefficiencies – for instance, if the warehouse is unable to effectively coordinate click-and-collect deliveries with their routine restocking runs.
A lack of integration and efficiency may also to lead to lower accuracy rates if the workforce is placed under increasing levels of pressure and has to deal with a system that is no longer fit for purpose.
Meeting your service-level agreements
In turn, these issues can lead to warehouses failing to adhere to their service-level agreements (SLAs) with their customers in terms of meeting deadlines or accuracy targets. In addition to threatening profitability, this can also harm the distributor’s reputation as well as those of its customers if they fail to follow through on the promises made to consumers.
The need for an effective and sophisticated WMS is particularly high when an omni-channel strategy is employed by customers with whom the SLA has been defined. After all, when it comes to goods-in, human error is the top issue in 46% of warehouses. A WMS can be capable of integrating the management of a number of processes, from picking to returns, into a single system. Some systems can support auto replenishment, too.
The best WMS will not just help distribution centres and warehouses avoid the errors that can frequently characterise strategies implemented in a piecemeal fashion, but it can also help management to identify any sources of inefficiency or areas where operations can be improved at little extra cost.
An effective warehouse management system can offer reporting. With insights into the warehouse’s picking performance, you can change the layout of your warehouse to achieve improved pick or putaway efficiency. Finally, by implementing a WMS that can scale and evolve with the business, the warehouse will be able to continue to meet its customers’ needs as they develop over the years ahead.