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With increasing levels of uncertainty and the inability to predict supply and demand fluctuations because of global economic pressures, today's logistics executives find themselves scratching their heads in order to find balance in the supply chain. The first reaction may be to continue to tighten the belt to ride out the uncertainty and maintain as much status quo as possible. However, today's Best-in-Class executives are taking this as an opportunity to continue to attack inefficiencies inside the distribution center and identify areas to improve performance in order to create agility and flexibility and drive value to the bottom-line. In fact, expanding the use of existing technology infrastructure and investigating new opportunities to leverage additional technology to reduce fulfillment costs have allowed the Best-in-Class to reduce labor costs by over 3 percent while decreasing order turn-around time by 1 percent, setting the bar for others to admire.
SKU proliferation, increased multichannel commerce, rapidly changing packaging configurations, and volatile product lifecycles are just a few of the pressures that make it very difficult to design an automated order fulfillment system that is flexible enough to withstand changing business needs. Despite the economic instability in the global supply chain, many of today's logistics executives are looking internally for opportunities to take action and attack inefficiencies. When you look beyond the efficiencies gained by implementing a warehouse management system and begin to expand the use of technology to create better alignment with the workforce, it's easy to see where today's logistics executives can create efficiencies without adding more space or increasing the size of the workforce.
Investment in technology to increase workforce utilization and ultimately reduce labor costs is high on the list for today's warehouse operation improvements. With almost 90 percent of respondents to a recent Aberdeen Group survey indicating plans to improve warehouse processes in the next 12 to 24 months, the focus is on creating more agile processes and increasing labor efficiency. Almost 30 percent of respondents indicate plans to implement ruggedized mobile devices or speech-based warehousing. With growing investment in RFID (32 percent), as well as in-motion manifesting and automated shipping and sortation systems, it's evident that the investment is around the technology that can augment or enhance the worker in the warehouse and allow them to stay integrated and connected to the real-time business that's driving their activity. The warehouse of tomorrow is focused on synergy between technology and the worker, ultimately creating a more agile and flexible warehouse that can change with the business climate.
The key to any process improvement is the ability to re-visit changes by monitoring and tracking performance. By focusing on analysis, logistics executives can fine-tune process and technology changes in order to drive greater efficiency. With almost 45 percent of organizations relying on daily performance visibility, the ability to make adjustments and respond to disruptions can be identified and implemented in time to avoid a performance impact.
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