The Challenge of Distribution & Warehousing
The great challenge in distribution and warehousing is how to transition to the new world of e-commerce and the expectations consumers and companies have of next-day service. This can be summarized in one word… Amazon, which has made an entire industry change their business processes. In response to Amazon and the new world of supply chain management, manufacturing companies are opening warehouses to serve their distribution and retail customers faster. Distribution companies are learning how to sell direct to consumers through e-commerce channels (sometimes by setting up a store on Amazon). Retailers who used to be happy selling from their bricks-and-mortar stores are now serving any customer, anywhere through omni-channel fulfillment centers. Finally, large retailers are extending their warehouse capabilities by requiring their vendors to ship e-commerce orders direct to the retailer’s customers.
With hundreds of Clients and over 600 Lean and Supply Chain projects, Supply Velocity is a proven partner
In summary, consumers and companies want to be served just-in-time. This requires new inventory processes, new warehouse layouts, and new pick-pack-ship methods that can meet the needs for shipping large quantities for distribution or unit sales for a single consumer. To make this transition companies often look to experienced warehouse consultants for help. With hundreds of Clients and over 600 Lean and Supply Chain projects, Supply Velocity is a proven partner.
How Supply Velocity Helps Distributors & Warehousing Clients
Improving warehouse and distribution performance, and dealing with the new world of supply chain management often falls into one of four categories:
- Performance Measurement
- Warehouse layout
- Warehouse order management process
Unlike many distribution consultants our experience includes Lean Operations and Supply Chain Management. Therefore, we use the principles of waste reduction and total cost minimization in all of our methods.
Performance measures can drive behaviors and determine if processes are effective. If your performance measures don’t match the new business environment you can do well on your scorecard and still fail as a distributor. The key is to have Balanced Performance Scorecards that capture the tradeoffs inherent in the distribution and warehouse business.
Warehouse layout must be driven by the minimization of travel time by warehouse personnel. However, when a facility that used to fill up trucks or ship full pallets has to pick, pack and ship a single unit to an e-commerce customer, it may experience cost escalation that can consume all profit, even with growing sales. Our warehouse layout method considers the nuances of serving full-truck, full-pallets, mixed-pallets and e-commerce customers to maximize performance and profitability.
Warehouse order management processes used to be relatively un-important. When shipping large quantities it was not as important to receive and pick efficiently. However, when an order can be a single unit it is important to optimize warehouse systems to put-away inbound inventory, let-down items from over-stock and batch-pick orders. We have helped Clients create their own warehouse management system or define requirements to ensure they match a software package’s capabilities with their business’ needs.
Many businesses still use an inventory system composed of intuitive min/max inventory levels. Inventory managers are told to, “never run out!” but also, “keep inventory low!” Only by classifying inventory into strata of importance (A+, A, B, C, F), applying algorithmic forecasting techniques and optimizing safety stock can a company use their inventory as key to great customer service while maximizing their “profit return on inventory investment.”
As your warehouse logistics consultants, Supply Velocity promises to teach you how to maximize warehouse and distribution center operations and help you profitably grow sales.