The Essentials of Distribution Centre Management
Distribution centre operations are very similar to those of warehouses since both take place in large storage facilities. However, distribution centres are an advanced evolution of warehouses, which brings about significant differences in their management. Managers who’re used to the traditional merchandise distribution model in warehouses often have a difficult time adjusting to the more contemporary and high-velocity order fulfilment model associated with distribution centres.
In order to optimize productivity and efficiency in distribution centres, managers need to leverage the latest organizational and technical upgrades, such as warehouse execution systems (WES) to streamline their operations. For instance, WES gather data from different warehouse operations to allow for central, automated tracking of key operating parameters, which makes it easier to identify trends and anomalies. This, in turn, facilitates proper planning with timely inventory and workforce adjustments before issues arise, resulting in smooth product flow and massive time and labour cost savings.
Here are the essentials of distribution centre management to help improve efficiency and overall performance:
Integrating Technological Innovation
There are numerous new technologies designed to facilitate processes at different stages of the logistics and supply chain. For instance, Warehouse Execution Systems (WES) are designed to go beyond the typical functions in a Warehouse Management System (WMS), allowing you to:
- Capture data
- Integrate mobile scanner
- Pick management
- Manage inventory
- Manifest small parcels
- Manage shipping and labour
In addition, WES allow you to automate picking processes, like through the use of robotics to improve order fulfilment process. WES can also be used to enhance other processes, such as automated zone skipping, ship management, and sort management.
Other ways to integrate different technologies in logistics centre management include:
- Using electronically transmitted advanced shipping notifications (ASN) to eliminate the inefficiencies associated with regular shipping and receiving schedules. Problems arise all the time due to delays, equipment breakdown, improper staffing, and other disruptions that affect the normal schedule at every level, from the receiving dock to the warehouse. ASN can improve workforce planning in inventory management and purchase order functions.
- Data collection – advancements in technology have made it much easier to collect data. Rather than writing down or keying in item codes, distribution centres today rely on RF barcode and RFID systems to hasten the product registration process and promote accuracy while drastically reducing problems associated with human error.
- Hands-free order selection – handheld scanners are good, but newer technologies like voice pick, wrist-mounted RF units, and pick- or put-to-light order fulfilment systems have further accelerated the order picking process. Future wearable technologies, such as Google Glass will make the order tracking process more intuitive
- WMS preplan picking waves – rather than using order sequence to send pickers, WMS technology can be used to plan out picking waves using the most efficient routes to streamline the process, provide faster order turnaround, and optimize manpower and labour.
Optimizing Workforce and Workflow Requirements
Personnel requirements are constantly changing in the different warehouse functions, and balancing labour, space, and inventory requires real-time access to vital data such as the available resources, where it’s needed, and how much is needed for what duration.
WES software can be used to display current performance information based on the work type and end-user, revealing areas where the workflow is either accelerating or hanging up for better process regulation and optimization. Further workflow analysis can be used to determine the most appropriate mix of resources for optimal workflow in the entire distribution centre.
With predictive analytics integrated into a warehouse execution system (WES), it is possible to analyze data from the different functions and make informed and timely decisions. Predictive analytics is designed to evaluate key performance indicators (KPIs) and results from different WES pieces, including the enterprise resource planning (ERP), warehouse control system (WCS), and the warehouse management system (WMS) to produce actionable data.
For instance, a labour forecast for one section of the distribution centre may reveal how much has been done and what is remaining, making it possible to predict potential problems in the areas with pending work or projects and limited time to complete it. By providing information from disparate systems, the WES helps with analysis that can be used to check workflow and identify the root cause of issues.
Inventory Management and Space Allocation
Space is a finite resource in any warehouse, which is why it should be properly managed to balanced for optimal performance. Common strategies include:
- Cross-docking – though it requires a rather hefty investment to set up, cross-docking involves the direct transfer of products from one transportation container (supply) to another (customer), completely bypassing warehousing and storage functions. The products are sorted in a staging area before reloading, which results in massive cost and time savings, especially in large distribution centres.
- Dynamic slotting – allocating space in your warehouse based on demand can dramatically improve the efficiency of distribution centres. Slotting should be based on the projected scheduled waves or cycles to match the transportation schedule. Such a system can be successfully implemented using a WES.
WES can be used to help coordinate different departments in real-time to balance space needs. For instance, batch-picking functions involving an automated storage and retrieval system (ASRS) require buffer space for receiving the order upon arrival. If the needed space is not available when the order arrives, the entire process would stop entirely. But with data analysis, you can identify space wastage or overcommitment and increase the buffer capacity to maintain workflow.
Final Note: Enhance Strategic Relationships
Even with technologies and streamlined internal operations, your business may still face inefficiencies if your business partners, including vendors and 3PL warehouse and distribution providers, are not held accountable using vendor compliance programs.
In addition, integrating product identification and tracking processes in the entire distribution channel will provide visibility and seamless product flow. Similarly, using standard product case quantities and clear and specific labelling requirements for all shipments and individual items can also improve the efficiency of distribution centres.
Generally, the objective should be to provide small efficiency improvements that, when combined, have a huge effect on the bottom line: improved transportation times, reduced product handling, streamlined warehouse operations, and improved customer satisfaction.