Introduction
Rising costs, increasing complexity, growing customer demands, and difficult global supply chains are all intrinsically linked challenges that manufacturers and distributors face on a daily basis. Meanwhile, expanding omni-channel markets are forcing manufacturers and distributors to not only change how they sell to customers, but also redefine who their customers are. And customers are exerting even further pressure with demands for customization and personalization of products.
Since the rise of COVID-19, complicated supply chains have become an even larger challenge for maintaining visibility into inventory, shipping, and tracking. In addition to making sophisticated warehouse operations even more complex, it is difficult for manufacturers and distributors to remain competitive, keep costs down, and maintain profitability. Ineffective order management, excessive labor costs, and inefficient asset use just exacerbate the problem. To tackle these challenges, manufacturers and distributors must reconsider how their warehouse management practices, processes, and systems need to change in order to improve warehouse productivity, visibility, and costs.
Market Drivers
Over the last decade, customers have grown increasingly powerful and now demand more from manufacturers. Customers want orders delivered more quickly, more accurately, and more specifically tailored to their needs—all at lower cost. Although customers have been forced to experience delays and limited supply of goods during COVID, the current pressure on manufacturers and distributors to turn around orders quickly is enormous. According to Forbes: “The rise of next- and same-day delivery has created a standard of demand that puts a new kind of pressure on businesses.”
Companies can even be punished with fines and chargebacks if orders are improperly labeled, packaged, or delivered. More elaborate packaging has become common as retailers demand more in terms of boxing and delivery formats. Unfortunately, heavy competition and big box retail power mean that suppliers are unable to pass on the added costs associated with these added demands. To add further complication, the exact definition of these customers is also rapidly changing.
Manufacturers and distributors are scrambling to keep up with expanding reaches to markets they might not have previously served, such as online, counter sales, mobile apps, cross-industry, EDI, and even B2C.
Meanwhile, supply chain management has become increasingly difficult as companies struggle to source products, components, and materials. To meet demand, manufacturers are turning to new sources of materials. Similarly, companies are distributing their goods to new and growing markets that have become financially viable. That means products may be traveling great distances and be stored in more locations, increasing the challenges of visibility and threatening “perfect order” delivery.
Turning Challenges into Opportunities
While many companies remain wedded to processes, practices, and systems that perpetuate many of the warehouse management problems mentioned here, some companies recognize these challenges as opportunities to strengthen their competitive market positions. They are taking warehouse management to new levels by adopting advanced solutions that help them deliver the perfect order, reduce labor costs, and maximize the use of space and equipment.
These solutions enhance warehouse operations by taking advantage of next-level capabilities, such as inventory management, work and task management, radio frequency (RF) and voice direction, labor management, slotting, and kitting and light assembly. Advanced warehouse management solutions can be incorporated into an ERP system to position firms to operationally excel and drive profitable growth in today’s hypercompetitive markets.
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Please note: This blog post was based on the Executive Brief “Conquering costs, complexity, and customer demands with warehouse management” from Infor and updated by Datix to reflect 2023 market conditions
