Executive Briefings

Warehouse Management: Success Built on Process Improvement and Partner Collaboration

Analyst Insight: From a strategic perspective, warehouse managers are faced with balancing competing objectives. They need to get orders out of the door faster, keep inventory moving amid fluctuating demand, and minimize costs. It will require not only process efficiencies within the four walls but better collaboration with both upstream and downstream partners to keep these competing pressures in check.

While operating expenses are a main concern for warehousing professionals, they are far from the only issue that needs to be addressed.  Participants in Aberdeen research also cite large pressures regarding customers' demand for faster order-turnaround times, as well as fluctuations in demand that make it difficult to plan operations. So what are companies doing to address these pressures, while keeping a constant eye on the costs?

Just like cost is a constant concern, process improvement is always a potential source for savings. Beyond this approach, companies are focusing on both upstream and downstream collaboration for additional gains. They are looking to better collaborate with suppliers to improve visibility of inbound inventory, enabling better activity planning. They are looking downstream for two reasons. First, they are helping their partners better plan their own operations by providing information on outbound product and taking on some value-added functions. They are also looking to utilize information from farther down their supply chain to foresee fluctuations in demand.  This will let them better position inventories and better allocate their warehouse resources to respond to upcoming changes. By taking these steps, they are not only helping partners improve their operations, they are strengthening relationships that will pay dividends in better times.

Within the warehouse, managers are also concentrating on getting real-time visibility of inventory.  They are using supporting technologies to provide their underlying systems with constant updates, and relying on those systems to integrate and manage the data to improve operational flow in directing fulfillment activities.

The Outlook

On the systems side, we expect a focus on small upgrades, rather than new systems implementations. There is high interest in labor- and task-management solutions to monitor and improve workforce productivity. Similarly, companies are looking to business intelligence and analytics to drill down on accumulated data to better understand trends that impact warehouse performance.  For internal improvement projects, Aberdeen's community shows great interest in automated data capture to provide an information foundation for these advanced analytic and planning processes.

While operating expenses are a main concern for warehousing professionals, they are far from the only issue that needs to be addressed.  Participants in Aberdeen research also cite large pressures regarding customers' demand for faster order-turnaround times, as well as fluctuations in demand that make it difficult to plan operations. So what are companies doing to address these pressures, while keeping a constant eye on the costs?

Just like cost is a constant concern, process improvement is always a potential source for savings. Beyond this approach, companies are focusing on both upstream and downstream collaboration for additional gains. They are looking to better collaborate with suppliers to improve visibility of inbound inventory, enabling better activity planning. They are looking downstream for two reasons. First, they are helping their partners better plan their own operations by providing information on outbound product and taking on some value-added functions. They are also looking to utilize information from farther down their supply chain to foresee fluctuations in demand.  This will let them better position inventories and better allocate their warehouse resources to respond to upcoming changes. By taking these steps, they are not only helping partners improve their operations, they are strengthening relationships that will pay dividends in better times.

Within the warehouse, managers are also concentrating on getting real-time visibility of inventory.  They are using supporting technologies to provide their underlying systems with constant updates, and relying on those systems to integrate and manage the data to improve operational flow in directing fulfillment activities.

The Outlook

On the systems side, we expect a focus on small upgrades, rather than new systems implementations. There is high interest in labor- and task-management solutions to monitor and improve workforce productivity. Similarly, companies are looking to business intelligence and analytics to drill down on accumulated data to better understand trends that impact warehouse performance.  For internal improvement projects, Aberdeen's community shows great interest in automated data capture to provide an information foundation for these advanced analytic and planning processes.