Warehouse management strategies for operational success

posted by Nick Shroeger
23 November 2020

The rise of e-commerce has had a significant impact on warehouse management strategies and increased the need for streamlined operations.

As the complexity in this space increases, so does the need for more sophisticated digital and logistics solutions.

The most effective strategy in the age of e-commerce, as many shippers are discovering, is to distribute inventory across the countries they serve. This approach means keeping fewer total products in one place and instead diversifying through a network of smaller hubs near population centers. Although the management may be more complex, this strategy enables a much faster response to ever-changing customer demands.

Supply chain decision makers predominantly believe that full software integration across all business units is the area that they need the most expertise, according to Coyote Logistics’ Technology + Humanity research study. A warehouse management system (WMS) can deliver on this need and often be fully integrated into shippers' existing infrastructure. 

Managing a warehouse is complex, so it's worth taking every opportunity to streamline procurement. As a business grows, it’s often beneficial to outsource certain elements of their supply chains. Improved logistics can help shippers develop organisational agility and flexible capacity, which is critical when supply chain disruptions occur. As Coyote Logistics' study shows, shippers with annual sales of over €710m outsource approximately 37% of their total supply chain functions. 

Modern supply chains are incredibly dynamic and complex, but shippers can enhance the efficiency of their networks by collecting and analysing their data to identify bottlenecks and opportunities for enhancement. But in order to take full advantage of all available data, supply chain professionals need the right systems in place to capture and store it. Access to data is becoming increasingly important, especially as more advanced AI technologies enter the supply chain – all based on massive data sets. If you don't collect and use it wisely, you won't be able to integrate new solutions as effectively.

The digital transformation will enable greater connectivity between different customers and networks, while enabling "sharing economy" ventures that were previously unthinkable. Induced benefits include efficient consolidation of warehouse space, real-time visibility into on-demand storage capacity and better network overlap with other shippers and carriers. Strategic partnerships for warehouse consolidation across similar industry verticals and with ports to sell jointly to customers can also be realised through this increased connectivity.

While implementing digital solutions and adapting their strategies, shippers must remain vigilant to the evolving needs of their customer base. This may seem like an obvious point, but all too often shippers develop their strategy by looking at their own needs rather than the needs of their customers first. Putting the customer at the center of every business decision is the key to an effective strategy and positive outcomes. 

☛ Nick Shroeger is a chief network solutions officer at Coyote Logistics.

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