For our third post about efficient warehouse management (see the first two posts from Ryzex and Psion Teklogix here and here, we’ll continue to explore an Aberdeen Group report entitled “On-Time and Under Budget, Maximizing Profits with Efficient Warehouse Management” — this time looking at best-in-breed strategies. You can download the entire Aberdeen report here.
According to Aberdeen, many of the top performing organizations adopt a PACE model as shown below, harnessing a combination of strategic actions, organizational capabilities and key enabling systems and technologies for effective warehouse management.
But even for these best-in-class organizations, which have (by definition) achieved high levels of accuracy while operating below established budgets, operating expenses continue to rank high as central concern. Given demands to improve fulfillment time and provide additional services beyond pick, pack and ship, how can an organization improve operations and help customers manage uncertain demand, all while keeping a close eye on costs?
The graph below shows that the answer — for a majority of companies across all performance classes — is by focusing on improvements to process efficiency in order fulfillment. Increased process efficiency, in turn, directly addresses two of the top competitive pressures we identified in our first post on the Aberdeen report: lowering costs and improving turnaround. And the cost savings from process improvements should not be underestimated: warehouse labor generally accounts for 35% of total warehousing costs across all Aberdeen research participants.
In our next post, we’ll follow along with Aberdeen’s exploration of specific strategies and focus areas for improvement at best-in-class organizations. As always, if you need help assessing your warehouse management strategies or technologies, Ryzex and Psion Teklogix offer a variety of services, technology and educations resources. Just contact info@ryzex.com for more information.
Tag: WAP3
Product Spotlight: Psion Teklogix Workabout Pro 3
Equip your employees with tools that ensure maximum productivity and success. Warehouses and distribution centers use the Workabout Pro 3 to manage inventory and orders, wirelessly and in real-time, accelerate picking and stacking and reduce data collection errors and operating costs. Learn more about the Workabout Pro 3 in our knowledge center.
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Filed under: Warehouse Tagged: | Warehouse, warehouse management
