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Warehouse management: How to improve efficiency

Man on forklift on his way down from retrieving box in a warehouse.

Nearly every warehouse operates with the same goal: process the largest amount of merchandise or supplies as quickly and efficiently as possible, while minimizing damage to products, risk to employees and operating costs. In this universal goal lies a universal challenge: every warehouse is organized with different needs, different processes and different employees. So, how do you make sure that your warehouse management is set up to be as efficient and seamless as possible? Here are four ways to optimize your warehouse logistics:

Implement a warehouse management system (WMS)

When it comes to warehousing and distribution, disorganized processes can lead to costly mistakes, delays, and product losses. That's why a modern warehouse management system (WMS) may offer the greatest opportunity to improve efficiency in your distribution hub.

A typical warehouse management system is a cloud-based platform that captures and organizes data about the moving pieces within your warehouse, and provides you with a clearer impression of what's going on – and what's going wrong. From inventory entering and shipments leaving, to helping you forecast tomorrow's staffing needs, a warehouse management system can help you see the bigger picture and can let you optimize both processes and planning.

An experienced logistics provider such as UPS can not only provide you with a supply chain assessment, but may also be able to assist you in choosing a warehouse logistics solution that fits your needs. Some of the best-in-class warehouse management software is certified by the UPS Ready® program, which approves integrated technology created by independent vendors who can add value by connecting both your own warehouse management system and the UPS® data network to provide an even broader view of your supply chain.

“There are tools that can help companies get a broader view of their supply chain so they can anticipate when they’re at risk of falling short of needed inventory, or to see supply chain hotspots that need to be addressed,” says Simon Bhadra, senior manager of UPS industrial products segment marketing. Bhadra provides an example of UPS WorldShip® shipping global application when used with UPS Quantum View® visibility services. “It’s possible to connect your team members and suppliers, and even your customers, to get everyone working from the same information,” he notes.

Frequently revisit your warehouse logistics processes

During the implementation of your warehouse management solution, you may become more able to look at your processes and determine which ones need to be updated or replaced.

For example, effective slotting practices could reduce costs for picking and replenishment, while optimizing staging areas could improve throughput to your customers. You also may find that a new receiving process increases productivity and brings a significant cost reduction for both you, your shipper and your customer. This is where the previous step, implementing a warehouse management solution, can give you the opportunity to evaluate processes up front and continue to monitor them so you can avoid cumbersome workarounds in accounts payable, shift scheduling, unloading, put-away and facilities management processes.

Identify key performance indicators (KPIs)

A warehouse management solution can help you to track the right things, such as metrics, directly linked to profitability and efficiency. It also can help you to quickly take a look at your most important KPIs and make sure each is tied to a tangible productivity or expense, like inventory accuracy and hours and days to customer. KPIs closely aligned with warehouse pain points - or possible future expenses, like energy efficiency factors - can make it easier to justify expenses and track improvements that really matter.

So, what is one of the most important KPIs to track? "Inventory demand forecasting," says Stuart McAvoy, global director of supply chain optimization and sustainability at UPS. "It is so important in the mid-size business space, because when you're manufacturing a certain SKU or product, it's more cost-effective to manufacture a lot of it. But on the inventory space side, you run out of room quickly."

You have to closely monitor the right balance between all of these functions, and that's exactly what a warehouse management solution can help you do.

Boost warehouse logistics with wearable tech

Productivity in today’s distribution chain is increasingly based on electronic “wearables” that are voice, motion or vision-activated. These cloud-connected devices are now embedded into eyewear, gloves, earpieces and wrist wear, and provide hands-free efficiency and access to a new world of efficiency-boosting data. In the process, they are transforming tech manufacturers’ daily operations, especially in warehouse logistics and distribution.

For instance, warehouse workers who wear smart glasses can be directed to pallet locations in their heads-up display and literally see instructions on what to pick, increasing speed and accuracy. That means more efficient warehouse operations. One European-based manufacturer, for instance, is using smart eyewear headsets to guide warehouse employees through plant facilities to find the optimal route for pallet locations. The manufacturer reported unnecessary travel time was reduced by 40 percent and the accuracy and efficiency of the pick was increased by 18 percent, demonstrating that wearable tech may be becoming an increasingly important element of warehouse logistics.

Deploying wearables in the supply chain can have a beneficial and immediate impact on warehouse inventory management, distribution, service parts logistics, and especially customer satisfaction. Plus, it’s accessible to businesses of every size. If your company infrastructure isn’t large enough to warrant building out this capability, you can partner with top-flight logistics provider that has already incorporated wearable technology into its supply chain. That way, you can benefit from improved efficiency regardless of whether you have invested in it.

Explore on-demand warehouse management infrastructure and services

Just as shared services such as cloud computing and software-as-a-service have helped smaller companies compete with their larger peers, there are a growing number of on-demand services that can help level the warehouse management playing field for midsize and smaller businesses.

Say your customer wants faster turnaround on a high-volume delivery to a certain location, yet the facility is difficult to reach within the timeframe of your service-level agreement. In certain cases, it makes better financial sense to position the product closer to the point of need. But instead of building out a warehouse, you might make contract arrangements with a third-party logistics provider to handle site selection, warehouse logistics and even order fulfillment.

McAvoy notes that UPS operates more than 900 field stocking locations globally. “These locations are positioned so they can provide same day or next day delivery to meet urgent service demands of our industrial, healthcare, high-tech, and e-commerce customers,” he says. “And we can often provide more advanced technology and inventory management expertise than most companies can maintain in-house.”

To learn more about how UPS can help make your warehouse more efficient, explore our warehouse design tools.

Find Out More

  • Integrated for efficiency

    What if your systems could share data across your business? You could reduce duplicated efforts, avoid key-entry errors and ensure consistency . UPS Ready® solutions make this possible.

    Learn more about UPS Ready systems
  • UPS WorldShip® Integration

    Start using WorldShip's time-saving features and integration capabilities.

    Learn more about UPS WorldShip
  • UPS Quantum View® Manage

    Get visibility into your package and freight shipments across your supply chain. 

    Learn more about UPS Quantum View Manage
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