Warehouse Technology—when used correctly—can improve safety, increase productivity, and boost profits. But it can also create plenty of room for error. Mistakes with technology will have a negative impact on ROI.
When upper management approves the budget for new technology, warehouse managers either breathe a sigh of relief or shudder at the thought of the changes to come. Either way, the work is far from over.
The overall goal of warehouse technology is to optimize efficiency and therefore improve the bottom line.
This could entail changes like:
Whether the changes are large or small, implementing technology requires an investment of time and money. But money and time aren’t the real problem. The true danger is the expectation that technology will solve problems or eliminate procedural weaknesses.
Unfortunately, too many warehouse managers jump on the technology bandwagon. They sometimes choose the wrong products for the wrong reasons. The result? Spending money on a solution that actually compounds existing problems or worse, creates new ones.
By watching out for the following errors, warehouse managers can ensure their technology choices provide the best ROI.
One mistake we see again and again is warehouse managers with unrealistic expectations about technology. They assume that technology is the answer to all of their problems (read our article Why WMS Won’t Help Your Warehouse), or they expect immediate results.
Technology will not fix a flawed system. (In our Warehouse Set-Up 101 series, we stress the importance of optimizing a warehouse layout). A company first needs an efficient flow of products, people, and machines. Otherwise, expensive software and high-tech machinery is a waste of money.
After taking a long look at procedures and layouts and making necessary changes, warehouse managers can pinpoint where technology will make the most sense. Their choices should promote a holistic view of the warehouse, rather than a quick fix for one area. We like to compare it to doing a health checkup of the entire operation, not applying a band-aid to an isolated problem.
Once in place, technology solutions will continue to “earn their keep” by shining a light on additional problem areas. Bottlenecks or inefficient processes become more apparent, making it easier to fix them.
It’s also worth noting that the successful implementation of new technology doesn’t happen at the flip of a switch. Installation of new software or machinery takes time. It may even cause temporary disruptions.
Once installed, new systems need testing. It may be necessary to halt operations for a time, or the old and new systems may run parallel to one another for a while. A new system without bugs or in need of tweaks is the exception, not the rule. Finally, a rollout can’t happen without investing time in staff training.
Just as the monetary investment is discussed and considered, so should the time and inconvenience that accompanies the new technology. That inconvenience shouldn’t be an excuse for not moving ahead with automation, but it is something to anticipate and prepare for. For example, scheduling installation during a warehouse’s summer lull makes more sense than the peak of the holiday rush.
The whole point of adding technology to a warehouse is to be faster, safer, and more accurate—in other words, more efficient. Unfortunately, not everyone in the organization will fully embrace the changes that come along with it. “This is the way we’ve always done it” is a common excuse for clinging to outdated methods.
It’s human nature to resist change, but that resistance can cost a company in productivity. Sometimes, managers see nothing wrong with their current methods and don’t want to invest money in a technology-driven solution.
Take the example of data collection. Automating and integrating inventory and accounting functions will always be better than manual data entry or Excel spreadsheets. Manual methods are slower and create bottlenecks. They’re subject to human error, too. Because of the time, it takes to gather and process the numbers, manual reports typically take a snapshot of what has already happened.
In contrast, technology makes data collection faster and more accurate. Picture the difference between tracking inventory by physically counting items and tallying them on paper versus scanning a barcode.
Data calculation is faster and more efficient, too. Reports can include real-time data. Projections for the future can happen quickly enough that managers can be proactive, not reactive.
Then again, managers who are on board with technology changes can encounter resistance from their staff, too. They might not understand the purpose, fear that their job will become obsolete, or simply not trust that the machine can do it better than they can. Managers need to communicate the purpose and importance of adopting new technologies in the warehouse. Thorough training and follow-up will help bring everyone on board with new procedures. Allowing employees to slip into old habits will inevitably create even more work down the line.
In general, employees feel more valued and empowered when they are given the appropriate tools to do their jobs. If management wants new technology to succeed, they will need employee buy-in and compliance with new processes and machines. They must make adequate training a priority.
Ideally, every employee receives comprehensive training on each piece of technology they use in their job. Realistically, many warehouses rely on training team leaders who impart the information to the members of their team. Training methods will differ from one company to the next, but what is important is that the new technology is used to its full potential.
To ensure that this happens, managers must plan ahead, making sure that training time is built into the scheduled rollout of the new technology. They must also look at staff education as an ongoing thing. A periodic follow-up is necessary to make sure new tasks are being done correctly. Procedures should be put in place to train new staff and retrain existing employees when necessary.
As we discussed in our article about warehouse automation, companies can start with small changes. Part of the beauty of technology in a warehouse, though, is the ability to integrate systems. When systems “talk” to each other and work in harmony, ROI can increase exponentially.
One example of successful integration is software that triggers an order of products when inventory falls to a certain level. Without such a mechanism, an unexpected spike in sales could catch the warehouse off guard, resulting in a bunch of backorders. Integrating real-time inventory data with sales data provides a powerful forecasting tool for your business.
As another example, let’s say a change of address for a repeat customer is recorded by the accounting department. If the accounting software isn’t integrated with the shipping department’s software, someone needs to let them know. Shipping needs to make the change in their system, too. If they don’t, the next shipment could be sent to the wrong place. In this case, integration not only saves steps but also ensures accuracy.
It’s possible to link stand-alone systems to make them interact. A better option is to invest in a system designed for seamless integration. For a detailed account of the advantages of integration, read our white paper: 5 Exciting Ways Software Integration is Revolutionizing Logistics.
A WMS comes with a lot of different moving parts. Some managers can be dazzled by the bells and whistles promised by certain products. If they have done their homework and know what their warehouse truly does and does not need, then their choice stands a better chance of getting results.
When managers choose a product, they need to ensure they’re using all of the features that will improve their operations. As in the example in Mistake #4, using the label printer but calculating DIM weight manually is a waste of money if the technology you purchased can do both. If DIM weight isn’t necessary for a warehouse, perhaps a less expensive product could have been found that didn’t include that feature.
The ability to customize a WMS solution is important. Customization ensures you’ll get everything you need while preventing you from paying for features you’ll never use. Adding technology is a significant investment. There’s the initial capital investment, monthly subscription fees, staff training costs, updates, and ongoing maintenance. Companies need to be sure they’re getting their money’s worth.
One important part of warehouse technology is the amount of data it can provide managers. A number of key performance indicators (KPIs) help warehouse managers analyze processes and gauge results. Here are 19 Warehouse Metrics and KPIs that we think are most important for your business.
Automated data collection provides real-time numbers to help managers make decisions. WMS and ERP (enterprise resource planning) software help businesses with a multitude of logistics and tracking tasks.
For example, tracking your transportation cost per package can point out inefficiencies in the way the warehouse is laid out. A high number of damaged orders could point to a problem with a vendor or the carrier delivering products to the warehouse. Only when managers keep an eye on these KPIs can they address potential problems and fix them.
Ignoring KPIs is the same as underutilizing the features built into a technology solution. It’s like squinting to see what’s in the distance instead of using the pair of binoculars around your neck. WMS and ERP put data in the hands of managers. Failing to use them is a waste of time and money.
Managers must be careful not to sabotage the ROI that technology can provide their warehouse. Better efficiency through increased speed, accuracy, and safety is the goal. By planning, training, and integrating properly, they can ensure that the automation decisions have the desired results.
Adopting technology correctly takes time and commitment. Luckily, you don’t have to go it alone. Infoplus advises warehouses on what technology they need and how to implement it. We offer guidance on everything from installation, to integration, to roll out and training—and we make sure it’s done right.
Schedule your demo with Infoplus today.
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