Customers’ demands, a challenge for warehouse production

When you work with logistics and especially warehouse production, the conditions are completely controlled by the customers’ demands, it is important to understand and accept that. I regularly meet colleagues who is frustrated of their complex flow and order structures with no regard for efficiency. Often the warehouse management arguing with sales organizations and senior management trying to change the sales conditions to the advantage for warehouse production.

In my opinion that is completely wrong way to go. Warehouse management need to accept the Customers’ demands, without customers and sale there will not exist any warehouse and no jobs. Stop fighting about order structures and so on, instead start use the brains to develop the warehouse flow and optimize the warehouse for current conditions. Warehouse management’s most important task is to develop and adapt the warehouse production to ever changing conditions, with other words: continuous Improvement.

There is a reason “agile” is a trendy word right now. Customers buying behavior is changing and there is a paradigm shift with e-commerce and omni-channel. The whole supply chain need to stay focused and agile with total cost control in the whole flow. This places very high demands on warehouse management. Higher skills are required with a great ability for innovative thinking and a leadership that takes advantage of the skills of the warehouse workers. We need to find new productivity enhancement measures. It is not the right solution to get the staff run faster or find cheaper labor force.

We need to utilize technology to the maximum. First, we need the right technology for the purpose. It is completely wrong to use a primitive WMS that is a “homebrew” product. That is in fact the opposite of agile. E-commerce and omni-channel requires top of the line WMS. A competent and well-established product with a big customer base. In this way, you secure a lot of features and innovations from colleagues in the business who use the same WMS, with other words you do not need to invent the wheel again. You also need a competent and well established TMS for an easy handling of different transport modes that e-commerce often requires also for total traceability. Something that even well-established WMS often missing is a good labor management module. I do not know why, too me it seems strange because labor costs is often the greatest post in a warehouse budget. If you are working with e-commerce, you are often handling small in-orders and out-orders and you need to be agile, move staff to avoid sub-optimizing. An LMS is an important and great tool to use for that kind of work. My previous article was about LMS so if you want to know more about LMS read that. You find a link below.

It happens senior management don’t even understand the increasing warehouse costs when implementing e-commerce, a good LMS is a great tool to describe the increasing labor costs and visualize for senior management how you often handle more tasks with a lower value for each task. That is often the consequence of e-commerce.

That is why you need top of the line competence, software and hardware in your warehouse. Stop fighting sales organizations implementing more liberal order structures and e-commerce. We are talking about the company’s survival. Put your energy on developing and adapting the warehouse for the future demands.

If you want to read about the benefits using LMS in warehouse production:

https://www.linkedin.com/pulse/benefits-labor-management-system-warehouse-production-karlsson/

Roberth Karlsson

2 thoughts on “Customers’ demands, a challenge for warehouse production

  1. I agree with your comments, to a point! I have worked and managed small to medium sized warehouses for over
    20 years, and all that time, most business’ don’t understand the day-to-day operational control of the stores department nor invest in quality equipment or training. Very few companies really practice LEAN, then wonder about ineffiencies.

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  2. The base of the article is absolutely right. But, as far as I have implemented, the most agile way to adapt the system to customers demands is to proceed following these steps:
    1- Analyse the task you want to optimise.
    2- Define the suitable working methods according to the size of the task, as many as desired
    3- Set the ranges within each working method is the best.
    4- Create an algorithm to analyse an order, so that an order can be allocated to a working method.
    5- Apply the selected method to an order or to a bunch of orders
    I never have seen a WMS with this functionality inserted. This is something the software provider has to develop, and is reluctant to create.
    This way, you obtain the maximum efficiency every moment. But do not forget your efficiency will not increase if the size of the orders diminishes.
    This is valid for any warehouse.
    Of course, leadership, production management and control, and continous improvement will always be required.
    Some examples can be found at https://loypro.wordpress.com/2017/05/26/echar-a-andar-las-curvas-del-cambio-iiii/

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