Optimizing logistics and warehouse management allows companies to save time and precious resources.
In particular, with the growth of e-commerce and the potential opening to a much broader market. There is a need for performing tactics that support business strategies.
It is necessary to organize and design strategic solutions to transform the warehouse into an effective resource. Limiting waste and inefficiencies that endanger your business. To achieve your goals, the pragmatic management of warehouse logistics is a priority you cannot avoid.
In this article we will see the right approach to warehouse management. 3 Practical tips to increase productivity and develop optimal supply chain management.
Logistics and warehouse management: the right approach:
Warehouse management is one of the hidden costs that companies struggle to analyze. It contain efficient warehouse requires the support of IT tools suitable to govern the flow of information. Storage and handling technologies and equipment, compliant with the reality of ‘plant. However, that may not be enough.
The warehouse is a pivotal point in the complex process of the supply chain. Its role varies according to the type of customer to be served and the needs of the market in which you compete. So, if you want to offer an excellent service capable of being a distinctive element compared to competitors. The identification of logistics processes is essential.
Undoubtedly there are needs and dynamics that vary according to the size of the company, but, regardless of the situation in which you find yourself, to get the most out of warehouse management it is essential to consider it as the center of your business. Tips to grow your business
It is, in fact, the place where you manage three crucial aspects:
– stocks, or the company’s ability to answer customer questions;
– operational capacity, that is, the rapid and correct preparation of orders;
– organization of shipments.
The logistics process is a flow of goods, information and actors with which the company must interact and which must be optimized at best: here are three tips for strategic warehouse management.
# 1 Establish reorder points:
The reorder point inventory management technique is the best solution to avoid:
– keep a surplus of products in stock, especially when subject to rapid obsolescence;
– have insufficient stocks to satisfy incoming orders.
The reorder point is therefore the level of inventory that draws your attention, signaling the need to issue a new purchase order. To determine the reorder point for your products, you will need to take into account several factors, including:
– the analysis of the demand (therefore the frequency of incoming orders, for that particular product);
– the order fulfillment times (lead time);
– the calculation of the safety stock.
This technique allows you to better manage the workflow that, from the commercial sector of your company, comes to impact the warehouse. Things you should know before hiring the forklift
# 2 Classify products in stock and apply the principle
Avoid focusing only on the products with the greatest movement: for efficient warehouse management you will need to classify all products and have a complete picture of your inventory.
To facilitate this phase, you can apply the ABC analysis, or make a product statistic based on the Pareto principle. In short, applied to warehouse management, it states that most of the effects that can be found in your logistics process can be traced back to a small number of causes.
Divide the products into 3 macro categories (A, B, C) to assess the degree of economic and quantitative impact:
– the products classified with A will be those items of primary importance, with the greatest impact on your turnover. Applying the Pareto principle, it is that 20% of products in stock that produce 80% of the annual turnover;
– items classified with B will be those that are of secondary importance, with an average influence on turnover of about 15-20%;
– classified with C will, on the other hand, be all those products with a lower annual consumption value. Usually, around 40% of the products in stock generate only 5% of the turnover.
By taking advantage of this 80/20 principle, and the ABC analysis, you will be able to identify the 20% of products that bring 80% of the turnover, thus assigning the right priority to those that create the most value for the company to ensure a forecast. accurate reorder point.
After checking which category A products are, you can focus on the others, possibly even making drastic decisions, how to get rid of all those items that do not sell and that take up space and resources (on these products you can also organize a sale to make up for costs investment and repossess an amount that would otherwise have remained on your shelves).
Remember that the 80/20 rule is not mathematics, but a principle that performs the role of “guide”, to allow you to optimize resources and priorities. In addition, it will be useful in every area, from placing products in the warehouse to inventory management.
# 3 Don’t give up on warehouse inventory
Mapping the traceability of goods, from their arrival to shipment, passing through storage, is of vital importance. Inventory operations are extremely important, and you can envisage three different methods:
– physical inventory: quantitative evaluation of warehouse products. Usually, this type of inventory takes place annually, but it could also be monthly, depending on the sector in which you operate. It takes time and resources, but it is a practice that you cannot give up. If the quantities do not match, it is necessary to check back in time to understand what happened;
– sample control: useful inventory when the warehouse is very busy, it consists in carrying out spot checks on a product, to verify its stock. It is a verification procedure that you can apply to the most valuable products: those that are categorized in band A.
– inventory in rotation: Allows you to optimize the resources available. Basically, every day or week, you have to check a small amount of products, according to a set schedule. In this way you can reconcile the physical inventory with the accounting ones, recording any deviations. You will always have up-to-date stocks, and you will lighten any inventory at the end of the year.
Strategic and accurate logistics is crucial for companies that aim to improve their performance.
