Every day new warehouses are opened, but even more of them are closed because they can’t keep up with the competition.
Have you ever noticed that the terms “warehouse” and “distribution center” often confuse many logistics professionals because they think they are synonymous?
Distribution centers are a special type of facility (specialized and universal warehouses) designed to speed up the flow of goods and avoid unnecessary storage costs.
They are the central part of the trade infrastructure and the place where products are stored and prepared for further distribution to customers.
Many logistics experts disagree that warehouses and distribution centers function virtually the same way, but Cliff Holste of Supply Chain Digest disagrees.
What are the differences between a warehouse and a distribution center?
Distribution centers today play a significant role in business success and are essential in the supply chain.
Although warehouse and distribution center management operations typically occur in large warehousing environments, the term “warehouse” refers to a traditional product storage model.
In contrast, the “distribution center” refers to a more modern model of much faster order processing.
All products are stored in warehouses, while high-demand stocks are kept in distribution centers. The warehouse can serve as a place to unite transport and as storage in case of production overrun.
Whichever model you choose, distribution center or warehouse, it is very profitable to implement the latest organizational and technical upgrades in your business.
It is also essential to maintain stable business relationships by ensuring reliable logistics and product delivery while reducing costs.
In this blog, we bring you five ways to manage your business to meet all these requirements successfully.
If you want to manage a warehouse or distribution center efficiently, consider the following few tips.
1. Take advantage of technological innovation
Increase the efficiency of the warehouse and distribution center.
There are specially designed programs and software tools designed to monitor distribution centers' activities and efficient operation. These are all high technologies that can help you make the job easier.
An example of this is the Warehouse Management System (WMS). WMS is designed to monitor and automate input, output, management processes and inventory management within the distribution center.
It is crucial for the modern management of the distribution center. There are many different WMS software packages available in the market, so choose one that suits you.
Standard features include the Advanced Shipping Notice System (ASN). ASN can be used to track incoming orders, which is crucial for proper shipment synchronization.
This system can be combined with a vendor compliance program to better integrate inbound shipments with your business.
Dynamic product classification modules and workflow organization systems are also essential tools to simplify warehouse operations. A good WMS system has many useful tools for managing orders, inventory and shipments.
Investing in a warehouse management system is a simple and effective way to increase the warehouse and distribution center efficiency. WMS can improve inventory visibility, reduce the risk of demand volatility, integrate systems and workflows.
Also, consider automation options to make everything work smoothly. Automation will help reduce the possibility of error.
Product wrapping systems, robotic palletizers, AS/RS systems and other technologies can successfully automate warehousing operations and reduce employee workload.
It is up to warehouse managers to implement and use these technologies to work smarter, not harder.
2. Organize your warehouse
Optimize and improve warehouse performance.
Warehouses are centers of logistics activities to customers or internal users (production, distribution). They consist of complex organizational schemes that can increase efficiency and effectiveness in countless ways.
In today’s business, the main questions are how to improve work efficiency and organize storage space. One way is to harmonize the process of storing goods.
Improving the efficiency of your warehouse starts with a proper schedule. A dirty warehouse means a messy job. Treat the warehouse as your own home. Start with small things.
Choose one or two things you can implement right away. Clean the warehouse regularly and keep things at your fingertips. Staying in an organized and tidy warehouse will provide employees with more satisfaction and enable efficient, productive and safe work.
The last product to be unloaded should be the first to enter the truck. It is just a simple example, but logistical issues like this will determine how products are stored and moved through your warehouse.
The process of receiving and dispatching goods should be coordinated in the most efficient way possible.
The most important thing to keep in mind after a warehouse reorganization is to regularly review processes and procedures. Did your changes have a positive impact? Are your employees more efficient?
The organization of your warehouse will enable productive and successful business in the future.
3. Effectively manage your inventory
Run a business without difficulty.
Inventory management refers to ordering, storing, processing and selling inventory, raw materials and finished products. It is a way of managing the entire flow of goods, from buying to selling, while ensuring that you always have the right quantities of the right products.
Inventory is a commodity that a company owns and processes for sale and is a vital component of your operating process. It can be stored in premises or warehouses, distribution centers and other facilities.
Will you specialize in a particular type of product or receive a wide range of products? How much inventory will you have at any given time? These are questions you need to consider.
The inventory can be anything, from ice cream boxes in a pastry shop warehouse, to a million-square-foot warehouse full of products for large retail chains. In both cases, accurate inventory management is key to a company’s success.
It’s a good idea to target a smaller inventory that moves faster. Otherwise, you will have to pay attention to the shelf life of the product and many other problems.
You can also store different goods depending on seasonal periods, or your inventory may change depending on market trends. WMS can help you with dynamic sorting and storage to manage inventory efficiently.
Inventories protect against uncertainties in demand and the order cycle, such as transport delays, loss, damage, schedule delays. They allow supply and demand balance to be maintained and production specialization.
4. Always analyze everything
Monitor and improve business processes regularly.
This advice is linked to the first tip about using technology, more specifically, information technology.
There are modern ways of data collection and analytics available to supply companies. It would be best if you took advantage of big data to maximize efficiency in all aspects of your business.
A large amount of data collection can be done automatically using features such as barcode and radio frequency identification. They can be integrated into your WMS system to have more control.
Other ways of collecting data include voice-activated technology and various technologies based on radio frequency, the so-called RFID methods (Radio Frequency Identification).
RFID is a technology through which product identification is made wirelessly via radio waves. This technology has a wide application in any human activity area where data exchange is required and is increasingly used in production and storage.
It is necessary to collect and analyze data for constant improvement of warehousing processes and fulfillment of set goals.
Collect more data from your business processes. If you treat each product movement as a transaction, you will have a more extensive database determined by the way the goods move in the warehouse, which ensures maximum efficiency.
5. Take care of your employees
Invest in training and educating your employees.
The right amount of automation and data tracking will allow you to develop efficient logistics, but your warehouse is as useful as are your employees.
Implementing a quality training program that provides appropriate guidance for working within your warehouse is always a good idea.
The training should include training on machine maintenance and operation, warehouse organization, work reports, business processes, customer service, and other essential components of your business.
Workforce management software can help monitor the effectiveness of your employees.
Employee feedback is always valuable because field information are the best kind of data. Employee satisfaction with the work environment improves communication and staff cohesion, which also enables quality warehouse operations.
Keep in mind that employees are your most valuable asset. Motivate existing employees and take care of their development needs. Take the time and resources to train and invest in employees and their development.
Improving employees' mental and physical ability has the effect of enhancing the work performance of the entire organization and reducing errors.
Success in today’s dynamic retail market depends mainly on reducing costs while maintaining or increasing the current service level.
The main goals of distribution centers are the quality organization of business distribution and the transfer of goods from suppliers to end-users. The flow of goods must run smoothly and with as little downtime as possible.
These five tips will guide you on the right path and give you a great direction towards maximum business efficiency.
How to increase the efficiency of the distribution center?
The key is quality management.
Distribution centers in the supply chain are among the essential elements of the supply and logistics chain. Every successful and sustainable distribution center must be business efficient and have satisfied customers.
The distribution center is much more than a warehouse. It is a place where products from different suppliers are temporarily stored to be later delivered to end consumers.
Managing a distribution center is an incredibly complex undertaking. It takes a lot of time and experience to make everything work properly. Also, you have to struggle with a changing market to increase your profits.
Every business activity in the company should be aimed at improving customer relations and improving the business.
When working in a warehouse or distribution center, the answer to the question of how to stay competitive in the global supply chain is speed.
Survival in today's competitive market requires monitoring trends and constant investment in the company, new technologies, employees, and other relevant business segments.
To arrange the transport of goods from a warehouse or other delivery point, you will need a logistics operator.
A logistics operator is a registered and authorized legal or natural person who performs or organizes numerous logistics activities related to the movement, transportation, transfer, distribution of raw materials, semi-finished products and finished products.
Hubbig is an online digital platform for browsing and ordering LCL transportation. By simply registering on our website, you can get an informative offer for transport, customs clearance and delivery of your LCL shipment and order transport.
Within the Hubbig platform, we have created a marketplace with existing traditional logisticians transport that can be done in digital form. This way, you can speed up and simplify your business.
Make the whole process easier and choose the Hubbig digital platform!