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​10 Years Of Warehouse Evolution

It helps to know where supply chain management will go when you know where you came from

8Jun

Over the last decade, warehousing has changed dramatically in its inventory management, technological integration, and managerial efficiency. The warehouse affects every segment of supply chain and profitability.

Inventory Management

As warehouses have grown in size and complexity, so has the need to manage materials in the most efficient way possible. Ten years ago, the processes now grouped under the term ‘inventory management’ were often handled by different departments, if they were addressed at all. The need to survey all materials, from production supplies to finished product, spurred the growth of the current inventory management model.

The larger, holistic approach to monitoring the supply chain flow of goods within the warehouse reduces overstock and shortages, both of which drain profits. Carrying too much inventory uses up precious slots and may even require a company to rent extra warehouse space. Shortages lead to unhappy customers and premium prices for materials if they have to be rush-shipped and produced.

No longer does one group supervise raw materials and other finished goods. Streamlining the process has led to a much smoother manufacturing process overall, increasing inventory turns to establish a thriving business.

Technological Integration

The astounding growth of technology has not overlooked warehousing. The days of workers just knowing by experience where materials were located and about how much was in stock are gone. Warehouse Management Systems and manufacturing machinery have become faster, more accurate, and more encompassing.

WMS serves as the backbone for many warehousing operations and integrates with the production process as well. These systems assist employees with the day-to-day tasks associated with running an efficient operation. Some of the areas they cover include picking, packing, documentation, shipping and receiving, and inventory levels. The detail and broader scope of the current WMS systems go far out beyond its rudimentary ancestor ten years ago.

Today a well-integrated WMS system includes a number of important communication systems, such as mobile computers, radios, bar code readers, and machinery for material handling. Most material handling systems are now automated. No longer does a simple conveyor belt ease a package onto a checkweigher. The WMS oversees the modern lightning speed processing.

Managerial Efficiency

The fastest gleaming equipment and the latest innovative WMS technology will not help run a warehouse well without skilled managers. This means more today than ever as warehouses have grown into a vital part of the supply chain instead of stand-alone structures.

According to the U.S. Bureau of Labor and Statistics, the number production and non-supervisory workers in the Warehousing and Storage subsector has skyrocketed from 538,000 in January 2006 to 732,000 in January 2016. This rapid growth speaks to the need for skilled supervisors to ensure employee safety, production quality, and shipping efficiency.

Managers need to take time to build employee trust and communicate clearly about topics such as business needs, order fill ratio, outgoing shipments, incoming materials, and inventory levels. As the demands on warehouses grow, this regular communication becomes vital.

In addition, managers also need to keep abreast of federal and state laws, safety requirements, compensation trends, and more. Ensuring compliance in these areas is a top priority. Managers need to conduct vigilant audits of processes.

Supervisors need to keep up to date in more than legalities, however. They should attend conferences and training, passing along applicable information to warehouse personnel.

Skilled warehouse managers will also create and monitor a realistic budget that aims for cost savings. This may be through more efficient processes or reducing prices on materials and/or transportation by negotiating better pricing.

A decade ago the warehouse was its own separate entity; now it is an integral part of the supply chain. As they increase in size and complexity, the next ten years will offer even more challenges and opportunities within the warehousing and storage industry.

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