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Like any other part of the enterprise, improved service, reduced costs and enhanced performance are the goals of a warehousing and distribution operation. Using these areas for competitive advantage requires a proactive focus on continuous improvement.
While warehousing and distribution operations may not, at first glance, seem as complex as other operations, the human and process elements are in fact wrought with challenges. Processes and performance requirements can change frequently, and there is typically a high degree of employee turnover. This points to a clear need for ongoing process improvement and optimization.
The good news is that basic process improvement disciplines around voice-of-the customer (VOC), business process management (BPM), and Lean may be sufficient to deliver a dramatic improvement in overall performance, when targeted at common challenges like:
Inefficient warehouse design and layout
Warehouse process flows that are not well-defined, creating disorganization and possibly danger
High costs due to excess inventory
Lack of basic WMS functionality
Poor stock and location controls
Labor costs too high due to poor picking productivity
Excessive overtime requirements to meet basic SLAs
Stock losses
Poor people productivity
Lack of visible floor controls for input and output product flows
etc.
Proactive process optimization in warehousing and distribution operations can be inexpensive and provide a savings of 10-30% in annual variable costs, plus significant improvements in customer satisfaction and loyalty.
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