Managing a supply chain involves many challenges, but new technologies and warehousing options are beginning to make things easier. Keeping inventories under control still creates some issues, however. Here are three major issues and how to address them.
1. Customer Service
Some companies may not see customer service as part of warehousing, but it absolutely is. This is where the orders come from; customer service dictates demand while logistics are obligated to supply what’s needed and keep materials flowing. With the advent of personalized service and customization, clients are becoming very different in their expectations. It requires seamless communication between sales and fulfillment, and the warehouse is the key to that chain. Where either end makes mistakes or causes delays, the customer and the company are negatively impacted.
The solution isn’t simple in practice, but the basic idea of communication relies on better exchange of information, where technology excels. Inventory or enterprise resource planning (ERP) that can update available product and material in real time as orders are placed can be the center of communication, whether it’s web-based or through API integration with enterprise systems. Sales and warehouse personnel can quickly find information or receive automated updates on stock levels, ordering, lead times, costs, and more so that neither customer service nor the warehouse is caught by surprise.
2. Fulfillment Problems
When there is any kind of disruption to the supply chain, the fulfillment department is the one left scrambling. A poorly organized fulfillment system that’s unable to adapt to change will only compound problems with further delays, inaccurate or mislabeled orders, damage, waste, stress, and other issues. Small and occasionally even large organizations might not have enough personnel or materials on hand to get product out the door in a prompt manner when there’s peak consumer demand, or be left over-staffed when business slows.
One effective solution these days is to outsource all or part of your tasks to a fulfillment center with third-party services. These are companies set up and managed by experts to provide the best possible flow of product. They can kit, pick and pack items, and manage packaging and shipping usually at much lower rates than a small-to-medium business due to volume discounts. Contracted services with a good fulfillment service save the original company time, money, and worries so they can concentrate on making sales.
3. Costs out of control
Costs are always going up and can be difficult to track with rising expenses on labor, freight, insurance, utilities, taxes, equipment, and more. There is also added pressure from a increasingly competitive digital environment and growing urgency on product innovation. With changing strategies, markets, and business leaders, a company can find itself with a lot of money and storage space tied up in product that’s outdated or moving slowly.
The primary goal should always be to maximize the use of space. The only answer is to start viewing your warehouse and supply chain as a value system, not an in-house logistics service. Keeping tighter control over inventory levels is essential, and requires evaluating every factor in terms of timeframes, cost, and risks. Every inch of space has value. Whenever an employee touches inventory it costs the company money, and excess inventory has little potential for return. More data-driven inventory practices are vital. So is minimizing the distance that any raw material or product has to travel for greater efficiency.
Most problems come down to developing more efficient operations, generally in terms of procedures and technologies to optimize communication, cost, and workflow. Solving these problems requires having attainable plans based on real information, executing them, and constantly looking for ways to adjust and improve under any circumstances.