The need for analytics and extensibility in the warehouse

Workers using laptop and cell phone warehouse

October 28, 2020

Getting actionable insights through advanced analytics for operational improvement

As warehouse operations increase in complexity, the need for comprehensive analytics is greater than ever. Many warehouse directors lack the insights needed to improve shipments, manage inventory, monitor labor productivity and more.

While most warehouses have no shortage of data at their disposal, ensuring a reliable source of data, to gather insights from generated reports are much larger pieces of the puzzle. However, once these capabilities are in place, directors have the ability to measure critical KPIs at the facility level, as well as on the enterprise level, and make adjustments to areas that most need improvement.

Furthermore, having the ability to combine and leverage data from multiple systems allows for additional operational efficiency. For example, being able to incorporate insights from the organization’s transportation management system, order management system, or resourcing planning system allows warehouse director to measure volume or throughput shifts and schedule staff accordingly. This can be crucial when considering seasonality, promotions, new product introductions, and more.

Recognizing technology constraints and needs

For many distribution centers, technology investments involve a warehouse management system (WMS) built to serve their needs at the time of implementation.

As organizations grow in complexity, the WMS may be connected to the transportation management system to properly combine orders and reduce costs. According to the UC Berkeley Labor Center “Using a WMS is a fundamental building block for the adoption of many other technologies, and yet it is estimated that at least one-third of warehouses in the United States do not use such a system.”

As more and more systems require connection to an organization’s WMS, the need for open integration is a crucial to ensure the WMS can receive and execute all the task require to meet operational needs.

Unfortunately, many organizations utilize warehouse management systems that are built on an older technology stack that in many cases has become obsolete. As a result, current or previous vendors have informed clients that those systems are no longer supported or will be discontinued soon. As a mission critical system, organizations cannot afford disruption of a failed warehouse management system or frequent age cycles associated with aging hardware and software.

Another issue many warehouses run into regarding their older systems is the problem with scalability. Unfortunately, older systems provide the elasticity needed for seasonal items and promotions, volume swells and lulls, and expansion into new facilities. As a result, many organizations struggle with warehouse capacity challenges, inadequate labor management, or poor service levels that result in higher costs and missed opportunities.

Establishing operational excellence within the warehouse and distribution network begins with identifying which areas of your warehouse management processes are most ripe for improvement. From there, it involves creating a strategy for implementing the necessary changes and best practices designed to achieve perfect order fulfillment, increase service levels, improve omnichannel capabilities, and build a strong workplace culture where associates are set up for success. While change doesn’t happen overnight, the need to adopt new models for warehouse operations have never been more prevalent.

To learn more about how you can drive operational excellence in the warehouse, checkout the complete best practices guide.

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