January 24, 2023
Advice from the Experts at Open Sky Group
In today’s supply chain industry, developers find themselves facing plenty of challenges. From rising costs to the demand for labor, the list of disruptions just grows, with limited relief in sight.
While some challenges are unavoidable, it can help to embrace the struggle and find ways to move forward. So how do you avoid the unavoidable when it comes to transportation, shipping, warehouse space, and labor, and investing in automation?
Open Sky Group consultants dive into the tough questions in our first of many articles where we “ask the experts”. The following discussion unpacks perspective and advice to executives wrestling with how to do more, with less, in today’s rapidly changing global supply chain.
Question: Given spiraling costs and capacity constraints, how can companies better manage their transportation spending?
Answer: “GET A TMS!” But that doesn’t mean just any system, but one that fits what your operations need. Understanding what tools and functions are needed and how to best suit your warehouse is crucial. Pay for what you need. At a minimum, your operations should get improved routing compliance, freight pay, and audit function (to make sure bills are being charged correctly). Your TMS should be helping to free up capacity in manhours to repurpose those hours to other functions more critical to the business rather than focusing on manual transactional activities.
Q: Shipping volumes are projected to increase over the next few years. Combined with labor constraints, how can shippers prepare to be successful in this new environment?
A: The major growth is in e-commerce. That means additional labor will be required to pick more individual orders without some automation solution. Voice picking, high-velocity pick zones, robotics, and goods-to-person are some considerations. The right solution will be unique to the operating environment of your warehouse as there is no one size fits all solution.
Q: Warehouse space is at a premium; how can companies better use the space they currently have?
A: Much like the labor constraint challenges, look inward for opportunities. Can you relieve yourself of any obsolete inventory? Do you have slow-moving or excess inventory that can be stored in the yard? Is there space in your current location that can be better utilized either through consolidation or perhaps reconfiguring the physical locations? Do you have room to go upward? There are some vertical storage options on the market that might help.
Q: What is the best automation investment for warehouses?
A: “The one that works”…while that is the initial reaction, this question is not easily answered. It is so unique to your environment. The key is to make sure you clearly understand the problem you are addressing. If it is service-related, perhaps the ROI is not as critical as it would be in a cost-focused improvement plan. The strategies that need the most focus include:
- Making sure that process and technology are aligned. Adding tech to a flawed process is a disaster.
- Getting your hourly team involved early and making sure individuals are communicating well, over-communicating is even better. It’s natural that your employees will have concerns and taking their thoughts into consideration will help them to understand how their jobs will be impacted for the better.
Q: What strategies are most effective in dealing with labor market constraints?
A: The primary labor market challenge continues to be supply and demand. There is an increasing demand for warehouse labor (close to 500,000 open warehousing jobs with an expected growth of another 500,000 jobs within the next 3-5 years).
Focus on reducing the time needed to complete your operations order fulfillment processes. The trick? Look at your value stream map and discover what options you may have for reducing wasted time, such as the amount of travel time spent during your picker’s day.
Concluding Thoughts
While challenges within the industry are not going away, the key is working to find strategies to overcome them and get ahead of the competition. Reflecting on options and how they may affect your own operations is important, finding what will work for you and how you may be able to avoid the unavoidable.
