Top Warehouse Management Problems
Warehouse management is the backbone of the supply chain which in turn is the backbone of any business. Efficient warehouse management ensures that the product flow is regulated and under control across the system. Warehouse management ensures that there are no shortages and the movement of goods as well as raw materials is smooth.
While appearing seemingly simple from outside, warehouse management is a complicated process. Across industries, warehouse management is the key that keeps the production running and ensures timely delivery of the products to the end consumer. Inefficient warehouse management can result in uncertain conditions for various stakeholders within the organization. Poor management could lead to external stakeholders such as distributors or consumers losing faith in the organization. So, what are the key processes of warehouse management, and what are the top problems that need to be identified?
Processes Involved in Warehouse Management
Before discussing details, let’s understand the basic processes performed at a warehouse level.
Receiving step: This is the first step when the goods reach the warehouse. It is important for the warehouse to ensure that the products delivered are the right ones before accepting them. This could be verified by the information received in advance from previous stakeholders in the supply chain.
Put-away: When the goods are received at the warehouse, the next step is to allocate an optimal location. This location needs to be selected in such a way that it does not use a lot of space and does not damage the existing goods. Apart from this, an accessible location for the employees to handle the goods quickly needs to be considered.
Storage: The goods need to be stored only after considering the nature of the goods. The step should be implemented, ensuring that the available space in the warehouse is optimally utilized. It should ensure labor efficiency and make things quicker for the workforce.
Picking: This is the step when the goods are selected to be shipped, and hence accuracy in this step is absolutely essential. One wrong delivery could hamper the reputation of the organization.
Packaging: The main aim of packaging is to keep the product safe when it leaves the warehouse and ensure that the products are delivered in their original state without any damage. The packaging also needs to be light so as to ensure that the overall weight of the goods does not increase much.
Shipping: Dispatching the consignment to the right customer and verifying the barcode/QR code attached is the final stage before the products leave the warehouse. Delivering to the right customer and on time is important to gain customer loyalty.
Top Warehouse Management Problems
1. No inventory accuracy in the warehouse
When goods are brought in the warehouse, they cannot be seen or counted manually because of its packaging unless relevant printed information is marked on the stock. Once accepted, the responsibility of handling the goods is transferred to the warehouse and hence, while receiving the delivery damaged goods need to be filtered out and returned to the supplier. A failure to build a computerized network to track the inflow and outflow of stocks may create gaps either for delivery or production. This further adds up to the unbalanced ratio of demand and supply.
2. Inventory location and layout
A convenient and accessible inventory location increases the overall efficiency. Hence, compromising on this and structuring unorganized inventory without any systematic layout may result in difficulties for the workers which, in turn, may increase the loading time and delay the delivery process. Imperfectly configured layout compromises with the total usage potential of the available space and leads to shrinking profits as latent space becomes unused.
3. Utilization of space
Failing to utilize every corner of the warehouse effectively limits the storage capacity and thus increases the cost. Developing faulty design patterns to store the products and inexplicit parking facility of the vehicles does nothing but escalate work and labor efforts. Inadequacy in mapping the utilization of space whether floor or vertical may restrict warehouse management from utilizing it to its full potential. Inaccessibility for the labor to reach the stock or wastage of space considering the vertical parameters needs to be avoided.
4. Faulty picking process
The paper-based or manual mode of entering each data could lead to human errors. Handling the entire process of picking the product until it is loaded is a tedious task. It involves a lot of information about the consignment and the consignee being transferred. Errors in this step lead to wrong shipment being delivered which increases the cost of re-processing the shipment. Exceptions may occur at times for a wrong order being delivered or for a substitute to be shipped. Keeping track of such intricate information manually often results in human error.
5. Fluctuations due to seasonality
As the demand does not remain constant throughout the year, re-arranging the stock according to the need is essential. Administering seasonality of demand requires an updated and precise flow of information. Imprecision in demand forecasting is one of the major reasons for inefficiency in handling the goods. Negligence or wrong entry in regards to the arrangement of goods leads to mismanagement of the entire stock resulting in loss of goods, the burden of which is again borne by the organization.
Warehouse management assists the firms in meeting the productivity goals by providing efficiency in the flow of goods required in the manufacturing or the production process as well as in the delivery of finished products to the right consumer. Effectiveness and efficiency in this chain fuel the overall functioning of the organization. By providing the right stock at the right time, warehouse management brings value to the entire logistics system and helps in achieving the organization’s goals. With technology changing the expectations of the end-user and functioning of warehouse management, organizations need to adopt newer technologies to remain efficient and stay at the top of the game.
