8 Principles That Establish A Cost Efficient Warehouse Management Strategy

What can successfully reduce rework and amount to warehouse cost savings is without a doubt, an efficient warehouse management strategy. It does however happen that an existing warehouse management strategy depreciates in value because of poor decision making and assumptions. The only way to avoid this and ensure that whatever strategy you pick handles challenges properly and promotes profitability, is to base it on efficiency.

Here are principles that can assist in establishing a cost efficient warehouse management strategy.

Use Technology to Automate Data Capture, Analysis and Action

Without stating the obvious, an effective warehouse management strategy needs to be up to date and needs to be able to accommodate technology advancement. In order to meet the demand for customer-demand products, it should to be able to control the power of automation and modern technology such as Big Data and analytics. This will help reduce under-stocking and over-stocking. Additionally, modern technology should be connected to the warehouse management system (WMS), to save on costs across all warehouse operations.

Make Data-Based Decisions

Speaking of automation, data capture that is automated along with analysis and action through automated systems also assists warehouse managers make decisions that are data-based. Warehouse management strategies established today should in fact use data to make improvements to slotting optimization practices so that warehouses can keep up with the changing demands of an omnichannel supply chain.

Adaptable Warehouse Management Strategy

The previous point brings us to our next one, which is ensuring that a warehouse management strategy chosen is flexible and adaptable. Omnichannel retailing is changing how warehouse management operates and the aim should be to have a strategy that’s able to keep up with changes taking place in your customer base or supply chain partners.

Focus On Customer Needs

Warehouse management strategies often focus on what the company believes customers want, and not what the customers actually really want and need. Warehouse managers need to analyze consumers’ spending habits and trends. Data from this review will assist the company find out which items are profitable and which deserve to be a priority in the WMS.

Focus on Long-Term Strategy and Benefits

Try to not focus on just costs, but also consider long-term strategy and benefits. MultiChannel Merchant explained that since system and platform costs are decreasing, they make it easy for warehouse managers to take advantage of innovative technology solutions without major upfront investment – provided system vendors make use of a license-based or subscription pricing model. With all that said, warehouse managers should also assess the long-term strategy and benefits given by such systems, and not just the initial costs.

Consider Third-Party Partnerships

At times, it can happen that you seek to outsource for certain activities ranging from implementation of a WMS to overall logistics management to a third party. Assess the unique needs of your company and figure out if third-party partnerships may be conducive in reducing overhead costs and improving operations to achieve an effective warehouse management strategy.

Incentivize Your Workforce

It might be a good idea to provide programs or other incentives that will give employees something to work toward. Employees often work hard and considering the impact of the workforce on warehouse operations will make you realize the importance of having productive and efficient workers.

Manage All Inventory Flows, Including Returns

Overseeing the warehouse management strategy should include managing all inventory such as the returns management. Returns may mean there’s a problem with a certain product, however, warehouse managers can utilize this as an opportunity to fix and fine-tune existing warehouse stock and ordering practices.

Source: veridian solutions