Three key areas for a successful warehouse production 2018

2018 approaches quickly and as usual this time of the year trend reports for the near future increases on internet, this also applies to the supply chain. It is quite interesting to read these trend analyzes and I must say that quality of these analyzes vary greatly.

Right now, many supply chain experts mention robotic technology in warehouse operations as an upcoming trend. It is very interesting and I think there are great opportunities in this area. However, one thing is certain, as long as the investment costs do not change radically in robotic / automation technology there will not be much progress. Today, a few global players can make an investment of these proportions to pay off. Small and medium sized warehouse can certainly not make an investment of these proportions right now.

Personally, I believe that the following three areas will be trend setting in the warehouse logistics immediate future. Moreover, I focus on small and medium sized warehouses. They are most numerous, and they do not have the financial resources that the large and mega warehouses have. That also make them more interesting in a developing perspective.

  1. Leadership:

It will be much more focus on leadership in the warehouse. Multichannel, free ordering and more and more liberal rules for order structures. That is instruments of increasing competition, this means warehouse operations are finding it increasingly difficult to maintain efficiency. More orders with less quantities and value increases the demands on the flexibility of the staff. Warehouse Management must move people between departments and tasks to avoid sub-optimization and reduce the number of man-hours in the warehouse. To make all these movements of staff immediately requires a trusting and pedagogic leadership that can provide feedback and coaching in a good way. To the leadership we need to add strong analytical skills. Warehouse management have to analyze if all the changes to multichannel and so on increase the costs and what could be done to minimize the increasing costs.

  1. WMS:

In an increasingly complex warehouse environment with more orders and less value per order and challenges with Multichannel then it should be obvious to every company to invest in an established WMS. This, together with good leadership is absolutely the most important key factors for an efficient and qualitative warehouse. I have noticed that more and more companies are investing in a WMS module from the same vendor that they have on the ERP system. Be careful before you make that choice, make a thorough feasibility study to see if the provider is dedicated to their work with WMS. It is a fact that many ERP vendor’s don´t have the same focus on WMS, they use their WMS module as a complement to the ERP to attract more potential customers who wants an easy “all in one” solution. My advice is to look at many vendors and ask companies that are successful in logistics what products they have chosen. My experience is that vendors that have WMS as core business are at the forefront in logistics development and first with new technology and new features. Development is accelerating and trends are shifting faster and faster in logistics business so you need to have systems that keep the same pace and the same focus on development. Key features that should be integrated into a modern WMS is time management and statistic and analytical tools.

  1. Holistic approach with strong collaboration in the entire supply chain:

Within the four walls of your warehouse, you can achieve a certain degree of efficiency but in the end, you will be dependent on other departments to take it to the next level. The best players in the industry have torn down the walls between purchasing, warehouse and sales. All in order to optimize the entire flow from manufacturer to end customer. An extremely complex job that requires each department sees the big picture and not just their department’s best. It requires strong leadership right up to board level to get all departments to work as a whole. As an example, the warehouse together with the purchasing department and their contacts with suppliers can optimize one of the most time-consuming tasks that are goods reception. Another example, along with the sales department can warehouse influence the order structure, etc. to optimize order picking and reduce logistics costs, which ultimately benefits the customer.

As you can see, I have not mentioned the “Internet of Things” (IoT) or “Artificial Intelligence” (AI) at all. Of course, these subjects are very interesting and I follow the development closely. However, these areas according to me have no decisive importance for warehouse logistics in the near future and certainly not small and medium sized warehouses. Of course, these technologies will be implemented gradually in the future, but so far the technology is in its infancy.

I cannot emphasize enough how important leadership will be in the future warehouse. The status of the logistics industry must be raised to the level of manufacturing industry. The willingness to invest in leadership training and recruitment of good leaders in logistics must be greater in many companies. The same applies to WMS. Warehouse management systems must also be raised in status. Instead of putting all the focus on ERP and then purchase a WMS module as a small complement, you need robust pilot studies and procurement’s in order to buy a WMS that can be able to keep pace with developments in the logistics industry. Companies also need to understand the value of competence of WMS, in order to take advantage of functionality and optimize warehouse. A modern warehouse leader need to be multi-talented, leadership and a great understanding of warehouse management systems.  It’s not possible to rely only on application consultants just because they have an academic degree at the bottom. I often see their difficulties linking their system’s functions to the challenges of reality. Practical experience is often needed to make it successful.

The logistics area will be a critical success factor for many companies in the near future. In the manufacturing industry, development has been going for over a hundred years. Basically, all the focus has been on manufacturing but in logistics there is still much to develop, we have only seen the beginning…..

Roberth Karlsson

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