The global supply chain has been stressed to unprecedented levels in recent times, and is going through an unpredictable event cycle that is highlighting the need for companies to have agile and resilient supply chains. Warehousing and inventory is a key area to reassess and future proof in today's environment.
Warehouse issues are common in many industries, not just with high value OEMs, but there are a some clear solutions (some quicker and easier than others) that can be implemented to address these. We've discovered OEMs often neglect warehousing to focus on their assembly and core manufacturing. If your company does this then you're missing out on key production efficiencies, and easy ways to have smoother and more effective production facilities.
Solutions can include: implementing a new system (or revamping a tried and tested one) so as to organise the warehouse better; integrating new technology or data systems to streamline the process, investing in a third-party specialist for storage and outsourcing of non-core logistics activities.
Top warehouse challenges
— Inventory accuracy: Ensuring that the right product is ordered and delivered to the right location at the right time. — Location in stores: Making sure the product is stored in the right warehouse to meet customer needs — Space utilisation: Maximising space efficiency in a warehouse, while still meeting customer service level expectations. — Personnel & expertise: Are you using personnel efficiently, is the environment safe for them, and can you get the right expertise as UK labour shortage squeeze increases? — Picking technologies: Ensuring accurate warehouse picking by using the appropriate technologies such as barcoding, RFID, handheld scanner/shelving locators, kanban systems. — Picking efficiency & optimisation: Ensuring that warehouse workers know where to pick, with correct information to hand to complete Bill of Materials rapidly and accurately.
Finding solutions to key warehousing problems
Taking a look at these key issues can transform your factory operations and warehousing management. Warehousing is often a neglected area of supply chain value that offers cost-effective returns and increased operations performance. These are the most common problems we see with OEM warehousing:
— Inventory accuracy: Ensuring that the right product is ordered and delivered to the right location at the right time. .
If you don't have full inventory visibility, then the danger of component shortages is increased leading to possible production delays. Better inventory visibility can eliminate overstocking (and associated cash flow depletion, increased storage expense and obsolescence risks), but also allow adaption, more resilience and stock buffering for periods of supply chain stress.
Inventory accuracy requires greater end-to-end supply chain visibility and a robust supplier network on a macro-level, while also having the in-house operational data to manage it on a micro-level. In this way, production work-arounds and re-prioritisation of manufacturing builds can be made to add to operational effectiveness.
— Location in stores: Making sure the product is stored in the right warehouse to meet customer needs.
Have you ever lost stock? Can't find it in stores? Has it suddenly disappeared, or when found is out of date? These are surprisingly common problems we hear about, and a clear sign your warehousing needs a revamp (or to be fully outsourced to a specialist). Not only can personnel lose many man-hours locating stock if you don't have robust systems in place for tracking, but it demoralises staff with day-to-day frustrations, and in the worse instances impacts on assembly and production delays or line-downs.
— Space utilisation: Maximising space efficiency in a warehouse, while still meeting customer service level expectations.
We've all heard about the increased costs of warehousing space, the shortage of good facilities, and the competition for specialist provision. But the devil is also in the details: how are your racking and shelving systems organised? Are you maximising your facility space, and have the right mix of production vs storage space (internally, and externally managed)? Is your space safe and future-proofed for new warehousing technologies? Is the space organised to maximise picking efficiency, frequency of need, and production flow?
Load creep, with space becoming increasingly filled with inventory, needs to be watched for. In-house procurement often orders too much stock to 'fill-and-forget' the warehouse for just-in-case scenarios, rather than 'just-in-time' or intelligent adaption to seasonal, or event-driven demands.
— Personnel & expertise: Are you using personnel efficiently, is the environment safe for them, and can you get the right expertise as UK labour shortage squeeze increases?
Managing and utilising skilled workforce is a major challenge. Add to this a UK environment of skilled labour shortages, along with pandemic safety concerns (with associated testing, isolation, and other safety measures), and experienced, skilled personnel are at a premium. Typically, two thirds of warehousing operating budget can be associated with labour costs.
Maximise the workforce you already have (and for increased flexibility outsource to expert providers with their own skilled staff if you don't), and see how you can utilise automation to leverage them as a valuable resource. Company culture, training and skills development, motivation and recruitment quality all come into play as factors.
— Picking technologies: Ensuring accurate warehouse picking by using the appropriate technologies such as barcoding, RFID, handheld scanner/shelving locators, kanban systems.
Automation is not just about shiny (and expensive) robotics. Hands-free, augmented vision & automated picking technologies are still developing with the associated premium in price. These developments need to be monitored and are worth considering for new facilities, but less flashy automation technologies can have more immediate impact, shorter deployment time, and have a better ROI for minor capital outlay. They are also easier to implement with your current operations (not necessarily needing a full facility revamp). Picking technologies such as barcoding and RFID with handheld scanners can transform your data collection, inventory visibility, streamline and shorten collection documentation and other pick/pack processes.
Acorn can audit your warehousing, including picking & packing activities and consult on the right mix of in-house and outsourced activity. Logistics technology and automations are evolving rapidly, and as an expert logistics partner we work with you to develop your pathway to smart logistics solutions.
— Picking efficiency & optimisation: Ensuring that warehouse workers know where to pick, with correct information to hand to complete Bill of Materials rapidly and accurately.
Your inventory can spin out of control rapidly without an expert workforce knowing what they are doing, following the right procedures. When the rubber hits the road, the best production facility in the world can skid off track without skilled people implementing complementary processes in a well-designed, well-maintained environment.
Efficiency improvements can be made by eliminating these problems: picker error due to no clear order visibility; time inefficient picking due to warehousing layout not being optimised; paper-based picking rather than mobile app/tablet use; ad-hoc inventory locations with no clear tracking of items; picking prioritisation from data insights; component shortage or stock-out due to no automated re-stock or regular delivery process; no audit trails and non-staff assigned activity.
Connecting the dots
These improvements all require the right technologies with the right people operating seamlessly in the right warehouse configuration.
Warehouse management solutions (WMS), developed in conjunction with trusted logistics partners can help you to unlock significant supply chain value, and eliminate many operational headaches. It is complex to get right, with many interconnected factors. But when you do, your company benefits from significant operational efficiencies and fundamentally increased supply chain value.
Speak to us further about how best to solve your warehousing challenges, we'll help you connect those dots … learn more about our warehouse consulting service.
Chris Till, MD – Acorn Industrial Components, has been involved in OEM logistics for 35+ years. Along the way, he's developed a wealth of experience setting up and running supply chains for clients from Brighton to Chung-Do, helping them not just survive, but to thrive in the global manufacturing world.