Today’s warehouse operations are impressive: they serve the global supply chain, can quickly move large volumes of inventory, and leverage the power of automated tools and advanced digital systems. But when it comes to improving the way warehouses operate, it’s never a “one and done.” As modern technologies, systems and processes are developed, warehouse leaders need to continuously optimize their operations, to meet rapidly changing industry and consumer demand.
This ongoing warehouse optimization requires decision-makers to understand why ongoing warehouse optimization matters, what it looks like in their own warehouses and the best practices for sustaining ongoing optimization. It means that changes which optimize and improve operations don’t just happen once, or even occasionally. Instead, they happen continuously.
Here’s everything you need to know about ongoing warehouse optimization, and how to seamlessly integrate it into your operations.
Warehouse operations today are far more advanced and sophisticated than warehouse operations of the not-so-distant past. Instead of rudimentary inventory management programs and manual record-keeping, today’s operations are characterized by things such as advanced logistic and supply chain management technologies. The tools and features available include those in the fields of automation, artificial intelligence, and robotics, leading to both physical and strategic shifts in the ways warehouses operate.
These shifts have led to many widespread impacts in the industry. Warehouses can operate at unprecedented speeds (due to things like real-time insights and warehouse automation) and can rapidly respond to things like changing consumer demands and market fluctuations.
Warehouses can also use these technologies to make accurate predictions about stock needs, which can make operations more profitable and efficient. For example, studies show us that stock mistakes like overstocks and stock-outs cost the global retail industry about $1 billion in lost revenue. These mistakes can be avoided when accurate forecasting and analytics is used to inform stock-buying decisions.
But as we touched on earlier, warehouse optimization isn’t something that can just be done once in an organization: instead, it needs to be done continuously. That’s because new warehouse and supply chain technologies are constantly emerging, new processes are being deployed and warehouses need to stay abreast of rapid changes in the market and consumer demand.
In short: to stay ahead of the curve, continuously improve operations and meet consumer needs, ongoing warehouse optimization is necessary.
While ongoing warehouse optimization might look different from organization to organization, there are a few standard aspects of a warehouse that might typically be impacted by it.
Here are a few examples:
Ongoing warehouse optimization leads to continuous improvements within a facility, and within a business. But for that to happen, leaders need to create some processes and procedures around warehouse optimization, so that it’s seamlessly integrated into their operations.
With that in mind, here are some best practices for sustaining ongoing optimization within your business.
The first step to facilitate ongoing optimization in your organization is to know what the latest tools, technologies and developments look like, and how they’re being used. That way, you can deploy them as they become available, stay ahead of your peers and competitors, and can make educated decisions about which optimizations will work best in your organization.
Regularly tracking metrics and key performance indicators (KPIs) is essential for sustaining ongoing warehouse optimization. Analyzing metrics such as inventory turnover rates, order fulfillment accuracy and on-time delivery performance provides insights into the efficiency and effectiveness of warehouse operations. These insights can help you quickly understand where improvements are needed, and where optimization will be the most effective. Plus, they can help you reach your organizational goals: data shows us that tracking metrics makes you 2x more likely to reach your goals.
A culture of continuous improvement in your warehouse and overall organization can help your team be prepared for ongoing optimization. Think about it like this: if there’s not a culture of continuous improvement, employees can be resistant to change, leading change initiatives to fall short. They might get caught off-guard by innovative ideas, processes, or technologies, and can be slow to adopt them. But when there’s an organizational culture of continuous improvement, teams are ready for changes, and can be quick on their feet to adopt and embrace them.
Predictive analytics is an advanced feature of warehouse optimization, and this technology is continuously being improved. Organizations which take advantage of it are then able to lean on these insights for decision-making, especially when it comes to further optimization. For example, analyzing historical data and trends enables warehouses to anticipate future demand, optimize inventory levels and improve supply chain management. Additionally, implementing predictive maintenance based on equipment performance data helps prevent downtime and reduce maintenance costs.
In short, predictive analytics helps warehouse decision-makers see where their business is heading, and what areas can most benefit from further optimization.
When it comes to tools that help facilitate ongoing warehouse optimization, none might be more crucial than supply chain planning software. Supply chain planning software is a comprehensive solution for warehouses, which quickly resolves critical issues. Here are some of the ways that supply chain planning software is integral for ongoing optimization.
If you’re generating forecasts, are they as effective as you need them to be? If they’re simply coming out of a spreadsheet, you could be doing better. Advanced demand forecasting tools from supply chain planning software allows you to address things like forecast hierarchies, events, promotion planning, current period prediction and latest items. You’ll be left with answers and insights, instead of questions about your data.
Optimization is impossible if you don’t have a complete view of your inventory. But supply chain planning forward gives you a full, accurate view into your inventory levels, and provides you with the real-time inventory insights you need. You won’t wonder if you have enough of something (or if you’re out of it) and can use those insights to continuously optimize your operations.
Instead of having one person who is the source-of-truth in an organization (which can be risky in case that person leaves your organization), supply chain planning software puts all the knowledge in a central system that can be shared. This means all key players and decision-makers can access critical information and insights and contribute to the ongoing optimization of their organization.
Ongoing warehouse optimization is essential for organizations which want to continuously improve and best serve their customers. And when it comes to getting ongoing optimization right, you need a comprehensive and intelligent supply chain planning suite to help you see where your organization stands, and where improvements are necessary.
StockIQ is a supply chain planning suite targeted at manufacturers and distributors. It helps you improve operations, because everyone can work most efficiently towards optimizing your inventory and see where the most effective improvements can be made.
Find out how StockIQ can help you master ongoing warehouse optimization by contacting us today.