Today, the reality in many, if not most, warehouse operations is the existence of separate islands of information. The vision for the future is the linkage, integration and consolidation of the Warehouse Management System (WMS) with Enterprise Resource Planning (ERP), the Yard Management System (YMS) and Transportation Management System (TMS).
These linkages help remove inefficient information silos, promoting collaboration and increasing the recognition that changes in one process can and will affect others downstream and upstream. For example, changes in packing and staging can affect load plans, trailer drops, routes selection, rates and more. Anticipation of—and response to—these effects is crucial to not only improve warehouse efficiency and productivity, but also to create a more synchronized and agile supply chain.
5 Ways the Warehouse of the Future will be Better, Faster and Smarter
1. Optimize Storage and Distribution Growth Network
New initiatives to increase the number of warehouse facilities launching twice as fast as expansion plans for existing warehouses; lower transportation costs; shorter delivery times; responding to new supplier and partner locations and requirements. Shifting view of the warehouse and DC from cost center to center with potential for differentiation and growth.
2. Decrease Labor and Turnover and Training Time
Reduce average length of training by 44 percent, while at the same time preparing employees for an increase in new procedures they will need to perform as a result of task interleaving. Realizing such a dramatic reduction in training time will require new thinking, new solutions and new technologies.
3. Reduce Rate of Returns
The percentage of organizations with reverse logistics programs is expected to almost double; from only 16.7 percent in 2013 to 30 percent by 2018. Redesigning returns management from one of the least automated processes in the warehouse into one in which automated reverse logistics enables faster receiving, return to inventory and customer credit issuance. In addition, reduce the volume of returns caused by internal warehouse problems by consistently operating outbound order fulfillment in a “no fault” mode.
4. Increase Automation in Inbound and Outbound Handling
The industry vision is to increase the number of barcoded items received at a warehouse or DC from 67 percent today to 84 percent by 2018. It is also to ensure that supplier and partner processes meet the requirements of, and properly utilize the capabilities of, GS1, GDSN, ASN and RFID, support more highly prioritized picking and storage processes and enable stronger collaboration across the supply chain.
5. Link and Integrate Warehouse Systems
Unlocking value by providing a single source of accurate information. A strong shift away from homegrown and basic WMS solutions, with 68 percent of organizations moving incrementally to best-of-breed, cloudbased and full-featured WMS systems, and to increasing communications and collaboration across IT and operations.
As customer satisfaction and supply chain efficiency become more important drivers of warehousing operations, the industry is re-examining its perceptions of the business. Fewer organizations continue to view warehouses and DCs simply as commoditized links between endpoints of the supply chain.
Senior business executives across all market segments can no longer afford to simplistically look at warehouses as necessary evils that are fundamentally cost centers. The movement from linear to complex, multi-node supply chains recognizes this shift in perception, and is being driven by greater volatility, constrained capacity, evolving regulations, major shifts in customer demographics and buying patterns, and increasingly demanding customer and supplier requirements.
Overall, the warehouse survey points to more industry professionals seeing the bigger picture and viewing warehouses and distribution facilities as historically underleveraged centers that can drive competitive differentiation and, by doing so, increase profitable growth. These changes are positive. They provide warehouse management with an opportunity to benchmark their current capabilities against what their businesses, their suppliers and their customers are going to need in the next five years and beyond.
They can also take inventory of where their current performance levels are, and how they stack up across their different processes— from inbound handling to storage and inventory control to picking and filling orders and, ultimately, to outbound handling. This reshaped vision of warehouse operations as a fundamental driver of top-line and bottom-line business value points the way to achieving the ultimate objective of flawless fulfillment.