Everybody wants to be more profitable. Making your personnel more productive is imperative. But, what does that really mean?
Sure, there are obvious personnel-related productivity targets, such as increasing the number of sales calls each salesperson makes every week. Keeping employees from surfing the Web during business hours is another one. Pretty soon, you’ve addressed the low hanging fruit and it’s time to investigate other productivity enhancement opportunities.
How can you…
- improve customer satisfaction
- reduce warehouse space requirements
- eliminate excess personnel in the warehouse and shipping departments
- evaluate the productivity of individual warehouse personnel
- speed up order fulfillment and accelerate cash receipts
- reduce inventory investment
- immediately respond to slow-moving inventory items
- manage seasonal peaks and valleys efficiently
…without breaking the bank?
The most certain tool you can acquire inexpensively and install expeditiously, is a new WMS.
A warehouse management software system, you ask? But, they’ve been around forever. What is new that could possibly make that work for my company?
Let’s take a look.
RF technology (radio frequency—you know, those bar code readers you see the staff using at Target—those easy, automated devices that give every employee instant and complete knowledge of what’s in stock) has become affordable and flexible.
Imagine a new warehouse employee with an RF gun. In ten minutes, that new employee is fully trained. The digital readout on the gun tells the employee everything they need to know: where to go to fulfill their picking tasks, what equipment to bring (you don’t want an employee going to pick a heavy item on the top rack with a pallet jack), where to take the picked items, etc. No longer does that employee get a paper pick list to follow. Paper pick lists can be lost, or ignored. They are typically limited to particular orders, rather than sending several warehouse employees out to batch pick for multiple orders. Orders are then assembled at the shipping department, so that each warehouse employee can pick the maximum number of items, along the most efficient route, in the shortest possible time, without the possibility of missing lines on a paper pick sheet. The RF guns automatically and efficiently audit the picking process. If the employee goes to the wrong location, the RF gun won’t let an incorrect item get picked. If the employee skips a line on the digital readout, the RF gun will send the employee back to pick the items in sequence, along the optimal picking route that has been automatically determined by the system. At the end of the day, your supervisor can know exactly who picked what, and how quickly, allowing an immediate opportunity for feedback to employees that are not performing to acceptable standards.
With complete, accurate and real-time awareness of your inventory, you can hold lower levels of inventory in stock. There is no longer any need for “safety stock,” held because you can’t be sure exactly how much you have, or when new inventory will be released from receiving to the warehouse floor. You will know which inventory is moving quickly (and needs to be reordered in what quantities) and what inventory is sitting (and needs to be featured on the “Weekly Blowout Special” on your Web site). You can stage the warehouse so that the fast-moving inventory items are located where they are easiest to pick. You can establish “forward” and “reserve” inventory locations, so that you always have enough inventory for the immediate picking needs, but you don’t have to reorganize the warehouse frequently to keep all similar items together. If the space reserved for a particular item is inadequate because you have increased your inventory level of that item to meet demand, a reserve inventory location can be established for that same item and the RF guns will automatically direct the warehouse employees to the correct location, even if similar items are stored in multiple locations in your facility.
This has an enormous and positive impact on customer satisfaction. First, orders are shipped complete and accurately in the shortest possible time. The WMS will configure the shipping to make it fast and efficient, determining what size box, or package, the optimal shipping method (USPS, UPS, Fed Ex, etc.). It will automate emails to your customers to inform them of order and shipment status. It will automate reorders to suppliers, if you choose to do that. If not, it will automate notice to your buyers that inventory levels are low and reorders ought to be considered. When a customer calls Customer Service, the system ensures that the Customer Service Rep has 100% of the information on the customer and the order required to give prompt, knowledgeable and helpful information to the customer. Instead of fielding complaints, Customer Service Personnel spend time upselling happy customers. This can have a terrific impact on sales and profitability.
And when your busy season comes, you can train new personnel in a fraction of the time it used to take. No more nightmares of inaccurate picking and shipping because the new personnel made costly mistakes.
Your WMS ought to do lots of other important things, too.
Cross docking for immediate availability of inventory upon receipt from your suppliers can help to reduce inventory holding requirements. Drop shipping can allow you to offer a supplier’s entire catalog without the requirement to maintain inventory of slow-moving or expensive items. Because all of your information is in your system, a well-integrated system ensures that every bit of information is accurate and up to date, which contributes to making excellent management decisions because everything required to make good decisions is accurate and at your fingertips.
- If you could reduce inventory by even 10%, how much cash would that free up?
- By reducing inventory, what inventory carrying costs have you eliminated and what does that add up to?
- How efficiently are you shipping? Are you using the correct packaging? The optimal shippers? The best service level? All of this should be automated and optimized by a good WMS.
- How accurate is your picking and order fulfillment? How much does the current level of error cost you?
- Do you have too many people in the warehouse?
- Does it take too long to train new warehouse personnel?
- Do you know which of your warehouse employees is doing a good job?
- Do your Customer Service personnel have all the information they need when speaking with customers?
- What is your returns experience and how much is that costing you?
- Can you ship within a half hour of receiving an order from a customer?
- Are your customers evangelists for your brand? If not, why not? Would improved customer service increase customer loyalty?
- Can employees work without supervision and direction? Do you have too many supervisory personnel?
You can achieve these benefits.
You can achieve them at a cost that gives you a tremendous ROI on the investment.
Let Avectous help you.
Our experience in software design and complex integration and implementation is the difference. We’ve helped the largest and most complex companies to achieve these benefits.
We can help you, too.