Aberdeen Group just published a report entitled Agile Logistics: Transforming the Distribution Center. The report discusses ways for today's DC managers to mitigate the pressure they face to support an increase in customer demand, without increasing labor costs or expanding the warehouse. Aberdeen uncovered Best-in-Class trends, including enabling real-time knowledge of transactions and inventory as it flows through the warehouse, that provide a blue print for Laggard and Average DC's to target for improvement. As we discuss in the report, BIC distribution centers are achieving this through a combination of technology and basic practices, like cycle counting. BIC DC managers are also more inclined to use technologies such as a extending their Warehouse Management Software (WMS), material handling equipment, and mobile devices and voice technology.
In reviewing the data, Aberdeen found a notable gap between Best-in-Class and Laggard companies in the adoption of both current and, more importantly, planned processes and technologies. What these gaps reveal is that Laggard companies are limited in their plans for future business growth and process and technology improvements. Interestingly, Laggard and Average performers listed Lack of Executive Support and Upfront Costs as limiting factors in their decision not to pursue WMS investment.
A notable 68% of Laggard companies are using spreadsheets to manage the warehouse. The planned adoption rate for commercial Warehouse Management Software is high (51%), but the slow adoption of this technology is debilitating the labor performance of this group. Labor costs among best-in-class companies decreased an average of 1%, while Laggard companies watched labor costs increase at an average of 3%.
Another best practice that we uncovered in our research was the utilization of mobile devices in the warehouse. Almost 60% of all respondents utilize mobile devices (including scanners, voice, and RFID) for confirming transactions. In fact, over 40% of survey respondents (65% of BIC) currently support mobile devices for order picking in their warehouse and another 32% will be adding it in the next 24mths.
With customer order volume increasing, geographical boundaries disappearing, and demands on the warehouse getting heavier and heavier, the pressure is on for today's DC Managers to absorb the impact and increase their flexibility and agility, without increasing costs. Aberdeen has uncovered best practices that are helping today's Best-in-Class distribution centers to ride the waves and set sail to new performance levels. This report will give you insight into the many ways you can uncover inefficiencies and improve operational performance. The time is now to take advantage of available technology and best practices to leverage your existing investments and turn your most prized asset, your workforce, into a lean, mean, agile, machine!
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