11 Supply Chain Best Practices for Warehouses and Distribution Centers
Establishing best practices in your warehouse and distribution center operation will help you save time and money.
We've enlisted the help of our own supply chain engineering experts to figure out how to increase warehouse and distribution center efficiency while lowering expenses.
11 Supply Chain Best Practices for Warehouses and Distribution Centers
The top eleven tried-and-true best practices for improving warehouse and distribution efficiency are listed below.
1. Set up a Vendor Compliance Program
A vendor compliance program is a highly successful technique to improve the strategic connection between a company, its vendors, and third-party logistics providers. Streamlined warehouse operations, less product handling, improved transportation service times, and ultimately increased customer satisfaction are all common outcomes of well-thought-out compliance programs.
Integrating uniform product identification and tracking processes all the way upstream to offshore or domestic vendors would aid in ensuring adequate visibility and smooth product movement through the supply chain.
To make warehouse and distribution center operations more efficient, employ clear and specific labeling standards as well as standard case amounts for each shipment and individual item. Small efficiencies mount up over time to make a big difference on the bottom line, as they do with many optimization stages.
Note that companies that run their supply chains correctly incentivize all parties involved to contribute to a more efficient supply chain rather than simply punishing them for noncompliance.
2. Create an Advanced Shipping Notification System
Although it may appear to be a no-brainer, many distribution centers still do not have computerized advanced shipping alerts in place (ASN). Using a "standard" shipping and receiving schedule might lead to inefficiency at the distribution center. Delays happen, disruption occurs, and the "normal" timetable is disrupted.
The problems that result begin with insufficient staffing at the receiving dock and spread throughout the warehouse. Labor can be planned with greater confidence if electronic advanced shipment notifications are used inside the purchase order and inventory management activities. Order fulfillment and transportation processes can be tweaked to meet service time requirements, and transportation modes can be streamlined to reduce costs.
3. Make Use of Data Collection Technology That Is Automatic
Automatic data collecting is one area where technology has evolved greatly in the last decade. Most warehousing and distribution centers now use RF barcode and RFID systems to eliminate human error from the tracking process, which is a far cry from the days of copying down a long number by hand or even typing it into a keyboard.
Any step that can be automated reduces the number of steps to handle, while also allowing you to collect more accurate and timely data to aid in supply chain decision-making.
4. Use a Process that Allows You to Choose Your Orders Without Having to use Your Hands
Beyond portable scanners, other technologies like wrist-mounted RF units, voice pick, and pick-or-put-to-light order fulfillment systems speed up the picking process even more. Wearable devices, such as Google Glass, are being developed in the future to make the tracking component of the picking and order selection process more intuitive.
5. Picking Waves in Advance
Tier 1 Warehouse Management Systems (WMS) give technology that can plan out picking waves in the most efficient routes rather than dispatching pickers based on order sequence. This streamlines the picking process, resulting in not just faster order turnaround times, but also more efficient labor and personnel utilization.
6. Make a Transaction out of Every Movement
Any movement or process step that cannot be monitored or documented as a transaction is either superfluous and should be deleted, or it should be added to the "fix it" list. When things happen that aren't part of the process, it's called a "turnback," and it needs to be recorded (see our previous post about reporting turnbacks as a crucial part of warehouse optimization process).
7. Minimize the Number of Touches
One example of removing unnecessary steps in the distribution center process is picking directly to a shipment carton rather of an intermediate bin or tote. When unnecessary processes are removed from a process, it becomes faster and more streamlined, customer relationships improve, and bottom lines improve. Looking for ways to improve your warehouse operations is a crucial step in lowering distribution center costs.
8. Schedule Multiple Shipments at the Same Time
There is a possibility to reduce offloading labor in warehouses with numerous dock layouts by arranging shipments to arrive at the same time. This eliminates the need for multiple setups and breakdowns at loading ports, as well as the manpower and time required to load and unload shipments.
Working with vendors to ensure that deliveries can be precisely timed, as well as setting clear benchmarks and a high-performance culture, all contribute to a timeliness expectation that leads to enhanced efficiency.
9. Make a Habit of Counting Your Cycles on a Regular Basis
Implementing an ongoing cycle count program in place of a thorough physical inventory, which may halt operations or cause a major disturbance in your warehouse, is another method to save time and money.
Having a continuous cycle count method that samples different subsets of inventory is a more efficient technique to precisely evaluate inventory accuracy while causing the least amount of disturbance. By concentrating on the most in-demand shipments, the most critical goods will be restocked.
10. Cross-Docking
Cross-Docking is a great way to save time and money. While cross-docking requires a major upfront investment, it more than pays for itself in terms of time and cost savings in bigger distribution facilities.
By sorting products in a staging area before reloading them directly into the next truck, cross-docking allows products to be transported from one transportation container to another, totally bypassing warehousing and storage. This is most commonly utilized with LTL shipments and is particularly useful for larger distribution centers that are strategically positioned for moving goods from one mode of transportation to another.
11. Make use of dynamic slotting
Slotting your warehouse according to demand is a fantastic approach to boost distribution center efficiency. "Slotting choices should be performed dynamically rather than as a batch operation," Tony Tyler tells Supply Chain Digest about the procedure.
To do so, arrange the picks by product in one or more 'look ahead' programmed cycles or waves, which are normally timed to coincide with the transportation timetable and transit periods." For some warehouse operations, the technology required to operate this system successfully is prohibitively expensive, but collaborating with a 3PL that uses Tier 1 technology can provide you with all of these benefits and more.
These are eleven basic warehouse and distribution center best practices that can help you increase efficiency, although they are far from exhaustive. Every sector and business has unique supply chain requirements.
Experts in supply chain engineering that live and breathe warehouse and distribution center optimization and create specific solutions for today's organizations may turn supply chain into a competitive advantage.
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