Wednesday, September 11, 2013

From Manufacturers to Freight Forwarding Groups - All Want Supply Chain Costs Cut

Report Says a Properly Balanced Warehouse Management System Can Reduce Overheads
Shipping News Feature

UK – Ask the boss of any small to medium freight forwarding outfit what he thinks of the costs he incurs throughout the supply chain and it is a time honoured tradition that you will observe a furrowed brow and a dark look which speaks volumes. Now a report, based on the responses of 132 British businesses, from warehouse operators across manufacturers, wholesalers and 3PL warehouse services providers, reveals almost half have the same opinion when it comes to warehousing at least.

The survey, was carried out by Redshift Research on behalf of Access Delta, a warehouse management system (WMS) vendor which deploys its products both at home and across Europe. The results show that 43% of respondents regard reducing the cost of running warehouse operations as their most critical challenge for business improvement, even more critical than speed of fulfilment. The white paper published as a result of the investigation, ‘War on Warehouse Costs’, reveals online ordering, pick and pack operations and wastage were found to be areas where companies are likely to be more successful at reducing their warehouse costs if they apply technology appropriately.

The survey finds that nearly a quarter of businesses now receive most or all of their orders online, and almost 50% receive half or more of their business this way. Making online ordering a smoother and more capable process from the back office is clearly one way to reduce costs. Growth in revenue and the ability to reach new customers are also reported. Firms who stay ahead of the game in terms of their on line competence tend to be advanced in their adoption of other technologies such as mobile and hand-held devices, barcoding, RF communications and voice technology headsets and often employ a dedicated warehouse management system.

Pick and Pack operations are seen as a significant part of the business by over half of the firms surveyed, and others expect it to become so. 64% of those surveyed reported growth in their pick and pack operations, and it appears to be an even more significant factor amongst third party logistics operators. Despite this only 11% of the firms said that the IT which controlled their pick and pack was fully integrated ‘end-to-end’, while 15% admitted that different systems, such as warehousing and invoicing, do not communicate.

Another factor of concern was that of wastage with almost half of those surveyed reporting some degree but 6% admitting said wastage occurred at a level that is creating a significant problem. Access Delta says that this too is a challenge which can be addressed with the right WMS. Robert Hodgson, Supply Chain Divisional Sales Manager at Access Group commented:

“The ‘War on Warehouse Costs’ white paper, and the survey on which it is based, show that companies applying technology are getting to grips with reducing the cost of running warehousing operations. Integrating communications technology with WMS will reveal clearly where warehousing costs can be reduced and help businesses to tackle them. Appropriately integrated software makes operations more efficient and less manual, saving cash in every area from the cost of mispicks and returns to the overtime and weekend working costs of periodic stock checks.”

A copy of the white paper ‘The War on Warehouse Costs’ by Access Delta (part of the Access Group), is obtainable HERE.