In COVID times, an optimised warehouse is key
Article by Infor managing director for A/NZ Jarrod Kinchington.
Most businesses were caught out when the pandemic caused substantial disruption — from higher volumes of online commerce, a reduced workforce, and intermittent shutdowns. Whether for distributors of professional trade and industrial products or safety and medical supplies, this means optimising warehouse operations.
One of the most critical points for distributors to consider is that all warehouse activities have a direct impact on their relationship with customers.
The challenge is that the goals and goalposts are constantly changing, and COVID-19 has brought several simultaneous challenges to warehouse operations. The most obvious is that the pandemic has created workforce inconsistency, as team members deal with lockdowns, illness, quarantine, or childcare demands, putting pressure on teams and impeding productivity.
Another is that growth in e-commerce is outpacing even the most bullish of prior estimates, with customers having established high standards for an omnichannel experience. In 2021, organisations risk losing business if an omnichannel fulfilment strategy isn’t in place — and having a warehouse that can effectively fulfil many channels optimally is vital. This challenge is particularly pertinent as many warehouse management systems (WMS) are quite old and don’t have the capacity to provide this optimised fulfilment.
A common misconception is that optimised fulfilment is merely about getting the product out of the door on time. While this is crucial, optimised fulfilment is about adding value to fulfilment, despite the inability to offer face-to-face services. The ability to go above and beyond in the name of the customer experience requires the proper digital foundation to facilitate these efforts.
This business disruption saw many distributors attempting to trim the fat off already extremely lean processes. If inventory is incrementally managed more effectively based on greater transparency across an organisation, it can equate to massive amounts of savings.
A WMS system explicitly designed to keep costs streamlined through intelligent inventory insights can help distributors have more confidence that customer commitments are met without the need to buy and stock more than necessary.
Warehouse operations can control purchasing, and control any lost inventory or inventory walking out the door due to not being managed or tracked properly.
Managing increased throughput in the warehouse is where the cloud really shines as it provides the capability to calculate the increased throughput quickly, and then automatically add the additional computing power necessary for that increased throughput. Of course, the security, reliability and built-in disaster recovery all go without saying, but it’s the ability to handle this increased throughput automatically, at any given moment, which truly adds value.
Testament to this value is that those customers already using cloud solutions had a much easier time adapting to last year’s disruption, making the necessary adjustments as needed.
Optimising e-commerce isn’t as simple as streamlining pick-pack-ship. There are new variables that need to be considered, including what happens to the product once it leaves the dock, and many distributors have been caught off-guard by the number of returns required for processing.
As a consumer in the e-commerce world, the first purchase might come in three different sizes or three different colours, but two of the three might be returned. It is now evident that something similar is happening to wholesale distributors. Distributors must have a system that allows them to seamlessly accept that return and get it back on the shelf in an effective manner.
In achieving this, distributors can optimise their fulfilment and design a strategy for the digital economy to boost performance and expand market share.