November 12, 2020
Achieving warehouse operational excellence is one of the biggest opportunities and one of the most urgent to-do items for any distributor. In today’s increasingly competitive environment, warehouse operational excellence is a cornerstone for business survival.
Successful distributors heavily depend on an efficient warehouse management system (WMS) to meet customers’ expectations while keeping costs under control. But in recent years, with those expectations becoming more complex and sophisticated, not all warehouses have kept up. That’s why Infor is out with a new white paper on operational excellence in warehousing as one of the keys to thriving in a brutal competitive environment.
Too many distributors have gone a decade or more without significant changes to their warehouse operations. They’re trying to make do with old technology that isn’t up to the demands of a competitive, tech-enabled business. Legacy systems often reinforce dated business processes, or require new processes to be jury-rigged into old systems that were never designed to support them.
With distributors world-wide spending an estimated $350 billion per year on warehousing, the speed of business accelerating, and margins under constant attack, it’s time to confront a stark reality: a WMS that was good enough in the past won’t carry you into the future—or even sustain your business in the present.
But for companies that get this right, the rewards are sweet: the return on investment for a state-of-the-art WMS begins with a 15–20% reduction in manual data entry, an 8–15% increase in warehouse team productivity, an 8–12% decrease in the cost of warehouse operations, and a 3–8% increase in on-time and accurate order shipments—all metrics that translate into higher profitability today, and better customer relationships for tomorrow.
Operational excellence in practice
The Operational Excellence Society encourages a corporate culture that “is committed to the continuous and deliberate improvement of company performance and the circumstances of those who work there—and is a precursor to becoming a high-performance organization.” In warehousing, this broad principle shines a light on the long-standing problems a modern WMS can solve, once and for all:
- As modern warehousing becomes more complex, legacy systems fall further behind. A modern WMS includes barcode scanning for incoming items, data validation whenever an employee touches a product, multistep validation to prevent shipping errors, and ABC classification to optimize operations.
- Inefficient processes mean higher costs and frustrated customers. A state-of-the-art, scalable WMS boosts efficiency at every step.
- Customer expectations for rapid, customized delivery drive up freight costs that cut into margins that are already razor-thin. A modern WMS optimizes routing and proof of delivery.
- Older systems, some of them still paper-based, make it impossible to attract and retain a new generation of employees who expect the same functionality at work that they’re accustomed to at home. A modern WMS with simple screens, easy navigation, alignment of tasks with skill sets and responsibilities, and more has become a basic price of entry in the global war for talent.
- A WMS with mobile capabilities puts mission-critical information in the hands of front and back offices alike, making it easier to optimize workforce efficiency.
- A modern WMS deployed in the cloud is maintained and regularly updated by the software provider or service, incorporating the latest cybersecurity support and freeing up in-house IT staff to meet specific corporate priorities.
Keeping up in a transforming market
Faced with the consumerization of customer expectations, tough competition from Internet pop-up shops, and ever-faster disintermediation across established supply chains, you can’t afford to take any customer or business line for granted. A state-of-the-art WMS is one of the best ways to take advantage of the capabilities and increased profitability made possible by internet of things (IoT), machine learning (ML), and artificial intelligence (AI) technologies.
And not a moment too soon: With the wholesale marketplace facing epic disruption, a distributor who tries to stay above water without rethinking strategy and retooling systems faces an unfair fight. The best defense is to make yourself utterly irreplaceable to your key accounts, using technologies like WMS to optimize every system and become embedded in every aspect of a customer’s operations.
Download a copy of Infor’s new white paper on committing to operational excellence in the warehouse with a modern WMS.