Warehousing is a crucial link in the logistics chain. Whether you’re a sole trader with a small eCommerce store or a household name, how you store your inventory can have a dramatic impact on everything from your bottom line to your customer satisfaction levels.
The modern warehouse is packed with technology that allows goods to be handled and stored more efficiently than ever – but there’s much more to effective warehousing than computers and robotics.
What this article covers:
- What's the difference between warehousing and logistics?
- How to get my warehouse functioning optimally
- What technology should I consider to improve performance?
- What are the key skills needed to create the ultimate warehouse workforce?
- What can I do to make my warehouse more environmentally sustainable?
- What indicates that a warehouse is performing well?
What is the difference between warehousing and logistics?
Despite many people using the two words interchangeably, logistics and warehousing are two distinct (but very closely related) concepts.
Warehousing refers to the strategic handling and storing of goods before they’re dispatched. While you might picture that taking place in a giant, purpose-built warehouse, a business can technically warehouse products in any space – even a small cupboard or spare room of their office.
Logistics on the other hand is the process of strategically managing the movement of goods, right from their acquisition through to the end user. >> Find out more about effective logistics here << Warehousing is an integral piece of the logistics puzzle, but there are many others including transporting goods, fleet and inventory management and order fulfillment.
The COVID-19 pandemic has had a huge impact on global logistics. Border closures, unpredictable customer demands and a recession have all presented unprecedented challenges for the industry.
Australia’s warehousing industry has had to adapt to this changing landscape. With Aussies turning to online shopping in record numbers, warehouses are dealing with an exponential rise in parcel movements, unpredictable fluctuations in demand and other challenges.
According to research conducted by uTenant, some of the post-pandemic priorities for leading logistics and warehousing companies include investing in a powerful Warehouse Management System (WMS), exploring ways to increase their sustainability, and setting up an appropriate 3PL partnership.
How do I get my warehouse to function optimally?
So, you want to get your warehouse functioning as efficiently as possible – but where do you start? While there’s no silver bullet for optimising any business, there are several areas that are often ripe for optimisation when it comes to warehousing…
Utilising technology: It can be easy to forget just how quickly technology is advancing, but just think how outdated your TV from 10 years ago would be today! Warehousing technology has also come a long way over the last decade. From Warehouse Management Systems (WMS) through to Automated Guided Vehicles (AGVs), there’s a staggering amount of tech out there that can get your warehouse operating more efficiently.
Smarter decisions: We’re living in the age of big data. Analysing data can help you make smarter, more informed decisions about how you operate your warehouse. Are you likely to need more staff for a certain period? Are there unidentified holdups in your warehousing process that are causing costly delays? An analytics platform can take the guesswork out of things, saving you money and resources.
Layout: Forget feng shui - rearranging your warehouse layout with efficiency in mind can bring your business good fortune. If your warehouse has had the same floorplan for a while, it might time for a restructure. Look at whether all good are easily accessible, whether your team are frequently having to go from one side of the building to the other, and whether you’re using all your space effectively – including vertical racks. This can help give you a sense of whether there’s a smarter layout that can get your warehouse operating more optimally.
People: Even with the best technology, warehouse layout and data at your fingertips, a warehouse can be made or broken by its people. A team that’s highly trained and motivated can boost efficiency by performing tasks quickly and accurately, avoiding costly mistakes and delays.
What technology should I be looking at to improve performance?
Advances in technology have made the modern warehouse a well-oiled machine – in some cases, quite literally!
One of the most significant technological advances to occur in warehousing has been the rise of automation. From sorting machines and conveyors, all the way to vehicles and robots, automation is being applied to more and more elements of warehousing in order to improve performance. And with the price of these machines dropping as production increases, automation might be more achievable than you thought.
The Warehouse Management System (WMS) has revolutionised not just warehousing but logistics in general. A WMS is essentially a piece of software that helps you manage the day-to-day operation of your warehouse by putting all the important information about your inventory in the one, easy to access platform. This minimises mistakes, allows for better customer service and provides valuable data that can increase your warehouse’s efficiency. Not all WMS are created equal though, so take the time to find one that’s suited to your business’s specific needs.
There are many other types of technology that can help you improve your warehousing performance, including RFID tags, hands-free voice picking systems, Cloud based systems that can be accessed remotely.
What are the key skills needed to create the best warehousing workforce?
Your workforce are the heart and soul of your warehouse. It doesn’t matter if they’re picker-packers, forklift drivers or accountants, ensuring your team is happy and productive is the key to an efficient operation.
To create the best warehousing team, you’ll first need to attract the right people. There are many recruitment agencies out there that specialise in warehousing and logistics and can support you on your search. Whether you use an agency or handle the recruitment process yourself, be as clear as possible about what the role entails and what you’re looking for in the candidate.
Once you’ve hired a good team, you’ll need to keep them around. There’s more to maintaining an engaged and motivated workforce than paying a good salary. Empowering team members by developing their skills and offering clear pathways for career growth is important, as is encouraging regular and open communication, and having a clear strategy and vision for the business.
With governments and consumers increasingly concerned about minimising our impact on the environment, sustainability is now expected of businesses. The logistics industry is currently undergoing a green revolution and the warehouse is an important part of that evolution.
Lighting: One of the biggest energy consumers in a warehouse is its lighting. LED lights are 80% more efficient than fluorescent bulbs, so installing them in your warehouse can have a massive impact on your energy bills and emissions.
Solar panels: It’s hard to imagine a space more suited to solar panels than the roof of a warehouse. The huge, flat surface areas means you can install lots of panels to harness the sun’s energy and decrease your reliance on the power grid.
Machinery: If it’s been a while since you’ve updated the equipment in your warehouse, it might be a good time to look into it. Old machinery’s not only slower and more inefficient, it can also generate much more emissions when compared to modern options, like electric forklifts and pallet stackers.
Improve efficiency: Moving product around your warehouse inefficiently doesn’t just waste time and money, it also wastes energy. Ensuring your warehouse has a logical layout that minimises inventory movement is an easy and effective way of making your warehouse more sustainable.
Any business should always be looking for ways to reduce its overheads. There’s any number of areas within a warehouse that can be operating inefficiently and losing your business money.
Making your operations more sustainable is not only good for the planet, it can also help your margins. Switching to energy-efficient lighting, installing solar panels and investing in new equipment can all have a positive effect on the operating costs of your warehouse.
Human error can also end up costing your business dearly. Seemingly minor things like incorrect dispatches or inaccurate inventory counts can have costly knock-on effects and might be happening more than you think. Minimise mistakes by investing in a WMS.
Before taking any action, do your research. Rather than trial and error, smart businesses examine their warehousing data and KPIs to identify areas where efficiencies could be made. A short-term investment is often needed to save money in the long run, so you want to make sure it will pay off.
What indicates a warehouse is performing well?
As with any area of a business, tracking your warehouse’s performance is integral if you’re to make improvements and increase its efficiency. While there’s any number of metrics you could look at in order to get an idea of how you’re tracking, here are some of the KPIs we recommend monitoring:
1. How quickly you’re turning over inventory
2. How much it costs to carry inventory
3. How efficient your receiving area is
4. Your rate of return
For any further information on how to optimise your warehousing footprint or your warehouse operations, get in touch with us today!