Expert Advice for Medium and Midsize Businesses

6 Warehouse Challenges Growing Companies Can Easily Overcome

Christiane Soto
Marketing Manager - SMB

Growing small-to-medium sized manufacturers, distributors, and wholesalers face all kinds of challenges. They have to get products to customers faster by managing all warehousing needs and transportation modes. In other words, they need to be able to tell where the product is at all times and deliver when and where it is needed. Transportation and warehouse management is the lynchpin of an SMB’s entire supply chain operations.

The problem is that this cannot be done in a bubble. External forces always mess with the best-laid plans and processes. For example:

  • Customers want fast, convenient service, meaning they want their product yesterday
  • An influx of overseas competition enters the market, and they all have lower production and logistics costs
  • Transportation costs are spread so far across the industry they’re impossible to calculate accurately

But even if transportation and warehouse management could be done in a bubble, internal forces will also raise their ugly head. For example, it could happen that:

  • Communication among internal teams breaks down
  • No one has a clue where a product (or its component parts) are throughout the supply chain
  • Manual processes have stymied decision-making, slowing down the reaction time to new market entrants, changing regulatory demands, and emerging technologies

Sound overwhelming? Well, it does not have to. Let’s dive in and take a look at how to improve your warehousing operations. We can save a discussion on transportation management for another day (and another blog).  

It All Comes Down to Visibility

A warehouse is a building used for storing products (i.e. inventory). If you do not have full visibility into your rapidly moving inventory (no matter if it is sitting in a regional distribution center or a local warehouse or even on retail shelves), you have a problem. You are either going to run out of stock (at the wrong time – hello, Black Friday and Cyber Monday) and lose customers, or you will find yourself with too much stock, tying up much-needed cash and increasing costs.

The right warehouse management system (WMS) can solve a lot of the problems caused by processes that cannot keep up with the speed at which product flows through your supply chain. This includes:

  1. Inventory inaccuracy – The most common cause of inaccurate inventory counts is human error. Initial counts, regular inventory counts, or errors in order picking can create a range of discrepancies in the amount noted in the inventory management system and actual product in hand. The problem is manifested when workers, confronted with conflicting numbers, bypass the problem, in favor of speeding delivery to the customer.
  2. Inventory location – Issues with inventory location generally develop over time, as new products are added and space becomes more limited. Failing to set up an effective inventory location system can significantly slow down warehouse operations, leading to a variety of supply and delivery issuesꟷnone of which will make the customer happy.
  3. Low warehouse space utilization rates – How efficiently are you utilizing your inventory storage capacity? Low utilization rates indicate that the warehouse is too big, inventory is not where it is supposed to be, demand forecasting (see below) is not accurate, or that inventory cannot be replenished quick enough. Low utilization rates cause higher overhead costs. Overhead does not generate revenue, and growth requires revenue (as you all know).
  4. Product diversification – Do you know your best-selling product? Could you name which products have moved from cash cows to dogs? Being able to identify and then eliminate/modify old stock improves cash flow and saves business carrying costs, warehousing costs, and transportation costs. Also, it gives your growing small-to-medium business the opportunity to add a new product line or extend a current one, which in turn improves sales.
  5. Product Picking Optimization – Picking is one of the areas of warehouse operations that can easily disrupt an inventory control system, because the tasks and decisions behind product picking are usually done in a hurry, to serve the customer properly.
  6. Demand fluctuations – All businesses have some level of seasonality, and the cause may not just have to do with the four seasons. Economic slowdowns, severe weather, political/financial unrest, etc. all play a role in demand volatility. By having real-time insights into what (and when) products flow in and out of your warehouse at all times, you can forecast demand much more accurately, and therefore reduce costs. 

Warehouse Management – Take it Off Paper and Into the Cloud

Advanced cloud-based warehouse management systems (WMS) provide real-time insight into your warehouse and equip everyone with the right tools to effectively, efficiently and profitably manage warehouse operation. Oracle WMS Cloud is more than just an inventory control system; it controls all warehouse logistics, from inventory receipt, control, and management to order fulfillment. The benefit of improving warehouse management is increased revenue. When warehouse operations run smoothly, inventory counts are correct, the right product is sent to the right place at the right time, stock is replenished when needed, fewer picking errors occur, and all the people, processes, and systems fall into place, revenue happens.

Learn 5 questions to ask to see how your transportation and warehouse management system would benefit from Oracle SCM Cloud. Download our ebook.

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