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Warehousing in an all-channel world: the 3 key steps

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Retailers have long been aware that strategic placement of merchandise in stores can boost sales and create efficiencies for the workforce, and customers like shopper A. But as all-channel shoppers like shopper B and C grow in numbers, many retailers are replicating these store practices in their warehouses to try and reap similar benefits. To meet the inventory accuracy, resource management, customer service and information management demands of modern retail, businesses must evolve their warehouse operations. Using the right approach and technology will enable retailers to achieve just this.

1. Workforce Management

Currently, engineered workforce management standards are not widely used in warehouses or distribution centres. Research shows that the average warehouse operating without formal labour management capabilities operates at about 65-70% of its total efficiency. This means that there is a possibility for warehouse managers to improve workforce productivity by 30-35%, without stretching capacity.

Unlike most automated systems in the warehouse, workforce management technology does not increase productivity itself. Instead, it helps encourage a more productive working environment; the real productivity gains come from getting the workforce performing the right tasks in the right way. For example: if a retailer has 100 workers in a warehouse, each worker has a different way in which they perform tasks. The probability that all of them are performing each task in the most efficient way is very low.

Operational process design and the development of methods and standards is not something a warehouse management system will calculate; technology can accomplish the “right tasks” part, but getting the workforce to perform their tasks properly is more complex. It requires accurate process design, the development of efficient methods, as well as achievable working standards that can be measured. By studying operational processes, warehouse equipment and the environment of the warehouse, retailers can establish the most efficient processes around each task. Furthermore, deploying labour management consultants’ processes alongside adequate training and change management procedures will make it possible for retailers to reach maximum workforce productivity.

2. Task Interleaving

Retailers that have implemented engineered labour management standards in the warehouse will make great strides in improving productivity. However, adding a second practice, such as task interleaving, can further improve this by extending the use of accurate workforce data. Many warehouse managers still use paper-based approaches to assign job tasks, which results in workers wasting time when traveling back and forth from a central location to pick up their next assignment. But a modern approach to task interleaving can eradicate this time wastage by empowering workers to be immediately notified of their next assignment based on priorities, proximity and their qualifications via a mobile device.

For example: an unoccupied forklift driver whose primary role it is to replenish a forward pick area from bulk storage can now be directed to other tasks during busy periods. In this case, he has been informed to pick a nearby pallet and take it to a loading dock for a delivery order of an in-demand clothing item. Using technology to prioritise capacity in this way will ensure that orders can always be fulfilled and delivered on time, even during periods of intense demand.

Retailer warehouse managers that allow workers to pick multiple orders at the same time or in “waves” can further help to reduce the travel and order cycle times.

3. Pickface Slotting

Adding pickface slotting is the final step to achieving warehouse operations fit for the all-channel retail world. Think of how you organise things at home; you probably keep coffee in a cupboard near the coffee maker; your refrigerator might have shelves on the door to make frequently used items easily accessible; even on a computer, you probably keep regularly used files on the desktop. In our everyday lives we organise, or slot, our belongings to help us complete everyday tasks with little effort.

In warehousing, however, slotting is the intelligent positioning of merchandise for the purpose of making order fulfilment more efficient. Slotting inventory can help retailers identify the best placement for each item. If a retailer’s inventory has any degree of seasonality; if they support weekly/monthly campaigns for promotional item fulfilment, or have a large amount of new SKU introductions into a facility, their business will benefit from proper slotting of forward pick areas. Proper slotting of high velocity SKUs can significantly reduce pick travel time as well as minimise pick-line congestion, thus making pickers more able to fulfil orders quickly.

Slotting tasks can also be integrated with other warehousing tasks using a warehouse management tool to ensure that re-slotting processes do not disrupt operations. When integrated with a workforce management system, the expected savings and ROI can be calculated prior to accepting a slotting plan, which will let warehouse managers quickly determine whether that particular plan will be effective.

All for one

Today, no one approach will single-handedly increase productivity. A coordinated plan to implement a combination of the above processes will provide the greatest benefit to warehouse operations. Retail warehouse managers must start by examining existing operations to establish a baseline for current productivity levels.

Once this is done, it is important to have an ongoing improvement program to help discover other areas that can increase worker productivity and facility throughput. Retailers should ask themselves: are overall operations as efficient as they could be? Could the warehouse layout better facilitate current and future operations? Does the business have industrial engineers trained in developing preferred methods and engineered standards? Who will handle the critical change management processes when the time comes to implement newer processes? The answers to these questions will determine how to best implement improved labour standards, task interleaving and slotting practices, and make sure that their business is able to cope with the demands of the all-channel shopper.

Published on Tuesday 03 June by Editorial Assistant

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