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Common Challenges Shared by DC Operations

Common Challenges Shared by DC Operations

Maximizing DC utilization and consistently maintaining peak performance — now and in the future — are common goals shared by DC operators. At Honeywell, this starts with identifying and evaluating your unique business requirements. The following areas represent some of the most common challenges DC operations encounter— whether in a single warehouse or across a network of facilities.

Capacity

Increased demand due to e-commerce sales, seasonal peaks and stock-keeping unit (SKU) proliferation are forcing companies to utilize their DCs to their maximum potential. In fact, capacity-related metrics were a top concern to DC leaders, according to the Warehousing Education and Research Council (WERC) DC Measures 2018 Trends & Challenges survey1. Within the top 12 metrics in the annual survey, industry leaders cited the need to improve utilization for both average capacity and peak demand seasons.

Accuracy

Accuracy is among the most important issues facing DC’s. It’s no surprise that accuracy occupied two of the top 12 metrics for 2018 per WERC, including inventory count accuracy and order picking accuracy by location. One of the chief culprits for errors begins with the analog or paper-based methods still used by many organizations for everyday tasks and workflows. This methodology is highly prone to introduce errors in every step of the process, and severely impairs receiving, inventory counting, picking and packing workflows. Companies are taking paper out of the equation and employing automation solutions such as radio frequency (RF) scanners, light- and voice-directed picking, mobile computers and scanners drive significant efficiency and accuracy improvements.

Consistency of performance

Maintaining consistent performance from year to year, is a shared priority for DCs. According to WERC, best-in-class operators saw performance decline on 50 percent of the metrics as defined in the study. Whether the causes are a lack of essential technology, economic challenges or an absence of capital to invest in infrastructure, performance suffered. Mitigating these challenges to achieve consistent performance is a top priority among DC leadership.

Labor

The integration of people, process and technology is the key to driving successful operations. Industry growth is outpacing the labor pool by six to one. Understandably, five of the top 12 metrics for 2018 according to WERC were employee-related, specifically: part-time workforce to total workforce; overtime hours to total hours; contract employees to total workforce; and the percentage of cross-trained employees.

The following three factors need to be addressed to achieve maximum operational efficiency from your DC’s labor force:

  • Labor productivity —Your workforce needs the proper tools to enhance their output and improve efficiencies. These solutions need to provide real-time and historical insights into individual and collective performances.
  • Labor training — Workers need intuitive tools that help reduce training time, help them continually learn, and improve their daily performances in order to complete tasks more efficiently and productively. Such tools also incentivize performance and forecast resource requirements.
  • Honeywell believes in putting people first and never forgetting that distribution and fulfillment is still a people-centric business where relationships are important.

Improving processes

An essential part of making the digital transformation is improving upon existing DC processes. A total of 89 percent of respondents in the WERC study suggested that people and processes have been primary areas of focus over the past two years. And while people, processes and technologies must converge for operational efficiency, almost 35 percent of respondents are still not using warehouse management or execution software to coordinate warehouse activities.

Making process improvements requires a thorough review and evaluation of your existing processes. Once established, this documentation can be updated for continual process improvement, or entirely revamped to incorporate new workflows or automation.

Technology

While 30 percent more facilities have implemented a warehouse management system (WMS), in 2018 almost 35 percent were still not using WMS to manage warehouse workflows. As companies increasingly invest in technologies and robotics and autonomous vehicles gain traction, companies need the adaptability and flexibility to stay competitive.

According to the 2018 WERC study, technology within the supply chain is becoming increasingly important. Many companies are beginning to focus more on digital transformation by focusing on more on mobile technologies, cloud-based services and big data practices. 

The study also points out that a majority of distribution centers use no other technology beyond a warehouse management system (WMS) and mobile devices with RF/Barcode scanners. In terms of adoption plans, over 90 percent of warehouse managers expect to be using mobile technologies within five years (which is just over 50% today). Eighty-six percent expect to be using big data and real-time analytics within five years which is a 60% increase over the percentage of people using the technology today.

Achieve Better Outcomes with Honeywell

At Honeywell, we have extensive experience in successfully solving complex problems for a variety of e-commerce and omnichannel businesses. We’re committed to solving your DC accuracy challenges through relentless innovation and a desire to deliver best-fit solutions. We provide access to the actionable insights and information you need to transform your business.

Our expert assessment teams will partner with you to understand your unique business requirements and identify where opportunities exist to optimize your workflows and increase efficiencies within today’s competitive retail climate.

Take your Distribution Center to the next level. Contact a Honeywell Solutions Expert today! Call 1-800-934-3163.

 

1DC Measures 2018 Trends and Challenges, WERC

Barry J. Ewell
SPS BLOG EDITOR

Barry J. Ewell is a Senior Content Marketing Communications Specialist for Honeywell Safety and Productivity Solutions. He has been researching and writing on supply chain topics since 1991.