Warehouse Solutions That Will Improve Your Supply Chain


Warehouse Solutions That Will Improve Your Supply Chain


What is the supply chain, and how is your business affected by it?


Your new product development department would grind to a halt without an effective supply chain acquiring new components and materials.Your management department couldn’t come up with a proposed budget and estimated costs unless supply chain provided accurate forecasts on materials.Your company wouldn’t be able to sell anything unless supply chain supplied materials to make products.


Supply chain is what nurtures your company and keeps it running.


A supply chain is the network between your company and your suppliers; this systematic web encompasses the resources, activities, and information needed to produce and distribute a specific finished good to the final buyer.


Putting it more simply: if you sell something to a customer, you have a supply chain. And if you have a supply chain, you may want to take a look at the following warehouse solutions since they play an essential role in your entire channeling system.


Proper management of a supply chain is important in order for a business to succeed, since a supply chain represents the steps you need to get the product to the end user. You want these steps to be short, cost-effective and conducted competitively. On the contrary, a poorly managed supply chain results in higher costs and longer production cycles.


According to a survey conducted by Deloitte in 2014, 79% of companies with high-performing supply chains achieved revenue growth superior to the average within their industries. On the other hand, only 9% companies running with inefficient supply chains were able to grow as much in the same period.


One common mistake is confusing logistics with the supply chain. The logistics department is in charge or moving goods (from receiving materials to shipping), while the supply chain covers many other aspects of business – purchasing, customer service, shipping and warehousing, among others.


Nonetheless, logistics does play a crucial role in supply chain – being responsible for dealing with shipping companies (analyzing options and strategies), parcel delivery companies, and brokers, customs and freight forwarders. Logistics can have a large impact on the costs of a company – after all, shipping is one of the two most significant expenses in the entire supply chain.



Inventory and its impact on the supply chain


The other high-cost aspect of a supply chain is inventory. The main difference between logistics and inventory is that in the former, you receive the service when you pay for it – the benefit is already obtained. For instance, when you pay for freight service, the goods travel and are collected at your warehouse –so the benefit is immediate.


Inventory, on the other hand, does not work the same way. In most cases, companies need to “sit” on considerable amounts of inventory –which they already paid for – until they sell it and receive their benefit (i.e., sales).


Companies tend to keep low levels of stock (just-in-time approach in extreme cases such as the Ford Motor Company), so the risk associated with having goods sitting at your warehouse is minimal. However, no one would like to err in calculations and have product shortages, therefore losing or upsetting customers, and having an even larger financial loss.


Companies in the tech industry are often found at this crossroads. With newer versions of devices and gadgets being released so quickly, it is hard to keep track and inventory management becomes a balancing act. Businesses related to seasonal products and depending mostly on trends continually have this issue as well.


How can you take advantage of an increased demand for a particular toy,for instance, without risking the possibility of the trend fading sooner than expected? No one wants to be sitting on thousands of fidget spinners that kids do not like anymore.


Although tricky, managing inventory efficiently can be achieved. Being attentive to market trends, having a close relationship with suppliers and crafting effective purchasing strategies are just a few ways to do it. There is another variable that can help enormously when it comes to controlling inventory: in-house management. By having properly-trained staff, adequate systems and by applying some tried-and-tested warehouse solutions to common problems, supply chain improves drastically.



Learn from the leaders


It often helps to consider the leaders in retail to glean insight into creative and effective supply chain strategies. For example, Walmart is a worldwide champion in supply chain management. The company is internationally famous for having a well-developed supply chain strategy. A few of the changes this corporation implemented are:


  • Strategically removed links from the grocery supply chain. If a product has to go through fewer steps before reaching you, its cost will automatically be less. You want to be as close to the source as possible.


  • Built strategic partnerships and deals with vendors. Walmart is a guru when it comes to handling suppliers – their incredibly effective alliances have lowered prices and created favorable conditions. Your suppliers are your partners, your allies. If you do not visualize them that way, it is time to reconsider your relationship with them.


  • Excelled in the use of technology to increase supply chain efficiency. Ignoring the role of technology in the supply chain is bad for your business. From purchasing planners to inventory control software, the market is filled with useful tools that can be customized to fit your needs.


  • Implemented top-notch warehouse solutions such as cross-docking that enabled reduction in cycles and costs.



Which warehousing solutions can you implement to revamp your supply chain?


Taking Walmart’s example above, all their strategies are worth evaluating to see if you can implement them in your company. The good news is that out of all those, incorporating warehousing solutions is something you can do without much investment in terms of time and money. A software system may have countless benefits, but it requires time spent in decision-making, in acquisition, and in the implementation stage.


Here are a few warehouse solutions for improved performance of your supply chain:


  1. Maximize and optimize your floor space

Adding extra footage is not the ultimate solution to your problems. Instead, aim for better use of the space you already have. Utilizing vertical space, for instance, can help you keep more stored in the same area. Placing small items in large pallets wastes space and increases the risk of them getting lost. Take advantage of the large variety of shelving available in the market – mezzanines, cabinets and bins help you keep your goods neatly organized.


  1. Make your inventory visible

Aside from saving space, keeping your stock keeping units (SKUs) properly distributed and organized gives you a better picture of what you have on hand. Tasks such as order-picking, scanning, labeling and counting are less of a challenge when everything is in its place. Follow the 80/20 rule and keep your most essential items in sight. You will save time, keep scrap and lost product levels to a minimum, and you’ll be able to feed your software system with reliable information.


  1. Pick an adequate warehouse categorization method and stick to it

Consistency while arraying items at a warehouse is imperative. If you start to fall into the temptation of doing things in a different way than what was established and agreed, your whole system will fall apart. The ABC classification is the classic way to begin. You may make your own arrangements later, once you are well-versed in it.


  1. Implement items and tools that keep your flow running

Think of it this way – you want your product to remain idle as little as possible. From the receiving points to the storage area, and on to production or distribution and shipping, you want it to move as fast as possible. Having obsolete docking or poorly designed warehouse layout will delay the flow and make your employees work more for less benefit.



All of the above warehouse solutions will help you reduce your costs and keep tight control on your inventory levels. Inventory accuracy is one of the most critical elements when valuing a company, and one of the most vital aspects of your supply chain. An optimized supply chain means the costs are controlled – or have gone down, the delivery dates are met or improved, and that the company was able to achieve all of this without a significant increase in expenses.


If your customers are happy that you are delivering as promised and if you are growing in revenue, you are most certainly running your supply chain the right way. Bear in mind, however, that there is always room for improvement and that by taking care of your supply chain you are taking care of your whole business.


If you think your supply chain is less than optimal and need someone to look things over and advise you, consult Specialized Storage Solutions. We offer a free Operational Efficiency Analysis in which we review your current environment and determine how we can help you with your storage, process flow, organizational, warehouse space utilization needs. We have effective warehouse solutions that help increase productivity and profitability while reducing costs for businesses.

Specialized Storage Solutions has been dedicated to providing warehouse solutions to customers for more than 25 years.Our veteran team has over 80 years of sales experience, which results in broad application expertise and the ability to “think outside the box.” We are constantly looking for better ways to educate ourselves to keep up with emerging technologies, identify new opportunities, and create innovative ideas to meet your changing needs.