The growth of omnichannel is subject to hype and fact. Some supply chain leaders and experts argue omnichannel is the improper term to describe the state of warehouse transformation today. Others voice concern over how warehouse transformation could increase costs when not adequately managed. Supply chain leaders need to understand why an omnichannel warehouse requires transformation within the entire supply chain and how a few best practices can enable actual omnichannel warehouses.
Challenges of Warehouse Transformation
Supply chain leaders understand the value of automation and digital strategies in the warehouse. According to McKinsey & Company, the average supply chain is 43% digitized, and those that have achieved digitalization can increase annual growth of earnings by 3.2%. Unfortunately, supply chain leaders still experience a disparity between the actual gains and potential gains. Technology gaps have become commonplace as supply chain technologies were put on the proverbial back burner after an initial burst of innovation and implementation. They did streamline sophisticated functions, but the next generation of digital solutions is available and ready. Even in this case, more companies experience a decline in service levels following the improper deployment of such technologies. Ultimately, each new improvement requires complementary technology improvements, such as increasing the scale of your data mining, and analysis to understand what is needed to truly maximize operational efficiency.
Warehouse Transformation Is Key to Omnichannel
Warehouse transformation is about much more than just data. It refers to the full use of warehouse automation technologies, such as smart forklifts, autonomous robotics, API-based integration, and remote capabilities. At the same time, automated technologies, specifically drones, and robots, will invoke new concerns, such as reliability and safety, not to mention accuracy in movements, reports Supply Chain 24/7. Amazon hinted at the broad deployment of its drone-delivery fleet in mid-2019. Now, supply chain leaders must act to keep pace with the Amazon Effect once more. Since more information in warehouse management enables better inventory visibility, today’s warehouses must work to augment the power of their facilities through technology.
Best Practices to Enable Omnichannel Warehouses
Supply chain leaders can overcome the obstacles of warehouse transformation by following a few best practices, including:
- Increase inventory visibility by bringing wireless, IoT-enabled sensors online. Remember any new sensors will need to connect to your existing platforms, especially data analytics.
- Deploy automated technologies to reduce delays. Automated technologies can reduce delays, but they can only do so if the complementary services that monitor and manage automation, including artificial intelligence, are in place.
- Take advantage of analytics to understand your warehouse. Analytics can cover insights in the most minuscule of detail, and supply chain leaders should take advantage of the full supply chain analytics suite. Thus, they can understand what is happening, what needs to happen, the ways to achieve the best outcome, and how such changes will affect other complementary operations.
- Consider the use of track and trace platforms. The use of track and trace platforms can successfully enable better insights and visibility into supply chain operations, but the same capability should be applied to internal warehouse operations, which will improve labor-management, inventory visibility, and more.
- Integrate technology with all platforms. Many systems are in use in today’s modern warehouse. Warehouse management systems, transportation management systems, ERP, YMS, and more. These systems must be successfully integrated with existing and new platforms to ensure maximum return on investment and to gain a unified approach to the visibility these various systems provide.
- Avoid unnecessary modification, opting for OTS solutions instead. One of the biggest problems that arise today occurs when supply chain leaders attempt to modify off-the-shelf solutions to suit a specific need. In many cases, these additional modifications are necessary, so supply chain leaders should look for solutions that meet their minimum requirements and enable continuous growth without the high cost of modification.
Bringing Omnichannel to the Forefront of E-Commerce
Achieve Greater Inventory Visibility and Comprehensive Management of Your Supply Chains Now
Warehouse transformation is the map to greater inventory visibility and comprehensive management of your supply chain, and address critical concerns to enable omnichannel operations. Supply chain leaders that understand the challenges of warehouse transformation and follow the right best practices can succeed.