Part 2 of 2: The Value of Automation and Efficiency for an Optimized Warehouse
In part one of this series we outlined some common mistakes made by distributors and the hard and soft costs that are incurred as a result. Additionally we covered how the implementation of good metrics can help you reduce and/or eliminate many different types of errors. This month we will be taking a deeper look into the different ways you can automate your processes in order to gain optimum efficiency.
1. Develop and Implement Metrics and Reporting
Automation is defined by, ‘the creation of automatic processes through technology by which manual labor can be reduced’. The beginning of automation is the creation of real-time trackable metrics. Having the capacity to pinpoint your current location and draw a map to where you want to go is a vital part of warehouse optimization. A great way to implement metrics is through reporting. In order to encourage effective report creation, you should first meet with applicable staff members and managers who can assist you in defining the kinds of metrics that will provide for deeper insight. This may include data and information on customer returns, training effectiveness, shipping accuracy, vendor induced error costs, and more. Next, implement a process in which those metrics are automatically collected by your system and then accessible through up-to-the-minute reporting. These reports will enhance your process by allowing you to track current performance levels in order to improve it in the future, and give you access to the true information you need to keep your warehouse running as smoothly as possible.
2. Don’t Overlook the Value of EDI
EDI possesses the advanced capabilities necessary to keep your processes running smoothly. From Evaluated Receipts Settlement (ERS) which matches the electronic PO to the paperless receipt and invoice to triggering an electronic payment to the supplier – the process is enhanced and automated.
3. Automate Your Return Tracking Process
A third crucial process in which to seek automation is within Return Tracking. If you just sighed in agreement – you know where we’re headed! Typically fraught with errors, frustration, unending paperwork and lost productivity, Returns can be the Achilles heel of many distributors. Because there are so many different facets to this process, from taking the initial call from the unhappy customer, to arranging an RA, receiving the product back into your warehouse, unpacking and entering it back into stock and/or forwarding it on to somewhere else be repaired, to sending out the right product to the customer…the steps seem never ending. If you are currently handling this process manually – you may not know where you are in this lengthy process at any given time and live in fear of a customer call asking for an update. The best way to automate your Return process is through the use of a barcoding software system. Scanning the label at each step not only keeps track of the item’s process, but also can be customized in such a way that it triggers automatic next steps. For example:
- The customer initiates a return.
- Your Customer Service department generates a barcoded shipping label which identifies the item, and links to all information regarding this process as well as any future notes for the receiving department.
- The label is sent (either via email or fax) to the customer, who then ships the defective item back.
- The product is received by you, scanned in (which automatically identifies the item, updates your system, and provides your receiving department with instructions from the CSR in regards to the next step (either to put the item away or forward it to the manufacturer for repairs), and can enter notes of their own, such as: product damage, incorrect quantity, etc.
- The software automatically issues credit memos, and sends any new information to the CSR.
- If the item(s) are to be sent elsewhere, the system can instantly produce a new shipping label by which the material can be tracked upon returning from the supplier to your warehouse.
With all information consistently and automatically updated you can greatly reduce errors, and lost productivity immediately. You can increase the likelihood of turning a bad situation into a good one when you are able to easily assist the customer, answer follow up questions they may have in regards to the state of the return process, and more. On the flip side, your Customer Service Representatives aren’t as stressed because they are able to meet customer requirements, and access the information they need to do their job to the best of their capabilities.
Ultimately the value of automation is immeasurable. From increased customer loyalty, empowered managers and employees, and an overall more efficient and organized process – automation will afford your company the advantages in optimization it needs to best compete in today’s evolving industry. An optimized warehouse is the best foundation for a distribution company’s profitability and future success.
To learn more about how you can improve warehouse efficiency, download our complimentary whitepaper below.