Challenges in warehousing

A warehouse can seem like a static object, where not much goes on except for a steady flow of goods and people leaving and entering the building.

But to those who are in the know, constant adjustments to an ever-changing world of logistics are happening everyday inside of a warehouse. On a daily basis the professionals involved are faced with a set of challenges that need to be met head on. If these are not met, the businesses they represent may lose their competitive edge. What are these challenges and what should these professionals concentrate on? In this post we delve into a few of them:

(International) competition

Large warehouses seem big enough to handle any issue they encounter versus smaller operations, but actually even they can struggle to do more with less space, which is the #1 issue in warehousing today.

Warehouse professionals are under constant pressure to increase the pick speed of their employees, make the most out of their storage capacity, and generally be able to handle orders in a more cost-effective manner. The pressure is due to heavy competition, a lot of it from overseas. China, Eastern-Europe, Mexico; all of these places have cheap labor, can and will make the same kinds of products, and produce it cheaper. These products won’t always have the same quality, but consumers are still buying them.

It’s a big task. A business has to keep storage costs down, save time order picking, get their product to the customer faster, and stay on top of the newest warehousing innovations if they want to stay ahead of the competition.

Performance of employees

When business increases and more orders start coming in, it is time to start hiring. But, is it? The extra costs that businesses are faced with when they hire new people can only be justified when current staff is performing at their peak level. Until it is clear that they are, there are other efficiency factors to look into first.

If evidence shows staff is not performing at their best, it’s time to consider streamlining the operation. For example, staying up-to-date on warehousing innovations and implementing those that keep costs down and save employees precious time, will enable businesses to get the most out of their operation.

Ecommerce

Warehouses need to be fully able to take orders online. Otherwise they’re missing out on a huge corner of the market. Consumers want to be able to view and order their products online, and get them fast. They want real-time tracking of their orders and to be able to quickly return and exchange items.

Warehouses need to be prepared to handle goods that are sent back. Because E-commerce is the present and the future of the warehousing industry, businesses need to fully adapt, something that comes slowly to this industry. But even if your business is behind the game, it’s not too late to do something about it.

Insufficient storage capacity

One of the biggest challenges facing today’s warehouse is insufficient storage space. This is not always due to simply a lack of storage capacity, but inefficient use of space can eat into not only your process, but your bottom line.

Disorganised warehouse space can cause unnecessary labour costs, and the incorrect use of racking and storage systems result in many companies finding their warehouse shelves full, with no space to receive new inventory. Cleaning up their storage inventory and reorganizing is a start, but when a business is expanding rapidly, this won’t be enough. The only two options left are to expande the operation by adding new, costly distribution centers, or increase the current storage density and get more out of the current space.

Slow picking processes

Every minute that is spent on each inventory item adds up over the day, having a major impact on operating costs. Do you know what your average pick time per item is? It’s important to have a baseline to know when you’re at peak efficiency, and when you need to improve the proccess.

When inventory location isn’t organised and easily available, pickers will take longer to find items that need to be shipped. This takes time, and can ultimately lead to a backup in labor. If employees are able to shorten their pick distance and find items more quickly, overall pick speed increases. This case time saved is literally money saved.

Conclusion

Challenges that warehouse professionals face are essentially no different than those managers in other industries have to deal with. It all comes down to keeping the competition at bay. Constant optimization of processes and employee productivity are needed to achieve a better ROI. When you’re looking at cost savings for your operation, don’t forget that cost savings can come from any point in the supply chain. Optimizing your warehouse and storage may be the solution you’ve been missing.