Four Problems in Warehousing, and How to Solve Them

Here’s a fact: regardless of industry, every organization wants to maintain a cost-effective warehouse and logistics operation. No one wants problems in their warehouse. Here’s another fact. We still go on WebMD to self-diagnose our symptoms, even though we know we shouldn’t. Warehouse issues, like WebMD visits, are seemingly unavoidable.

We’d much rather set up our warehouses in a streamlined way that allows things to run like an effortless flywheel. Likewise, we’d much rather not have a reason to slip onto WebMD.

But the reality is, problems sprout up. It often seems like a cycle, doesn’t it? Things are going great, running smoothly. Then they aren’t. So, what do we do? We ignore the problem. Once it can’t be ignored any longer, we get serious. We look up our symptoms. Don’t go on WebMD, they say. But they weren’t talking to us, were they?

We’re busy, so maybe this issue has a quick fix. It doesn’t hurt to check. When we’re lucky, and good, we can pull out of a nosedive quickly and get things running smoothly again. Next time, we’ll catch an issue before becomes a big deal, right? That’s life in the supply chain. That’s life, in general.

What Are the Symptoms of a Problematic Warehouse?

That said, let’s get proactive. Think of this post as a WebMD symptom checker for warehouse issues. If you already have your doctorate from the supply chain school of hard knocks, maybe this post is just a little cliff note. Otherwise, consider this a resource to help quickly diagnose any warehouse issues.

What are the symptoms we need to keep an eye on? How do we know if an issue is small enough that it can be cured with a homespun remedy or best practice? When does the evidence point to something a bit more systemic?

Hopefully, you can catch your problem early enough that you can take care of things under your own roof. Hopefully you understand that one symptom doesn’t mean you have cancer. The following list is intended to help. These are common symptoms of a problematic warehouse, and their cures. But then again, if your symptoms are bad enough, I recommend you call a professional. Remember, I’m not a doctor—I just play one on the internet!

Common Problems in Warehousing

Most problems in warehousing revolve around one or more of the following problems. Any one of these issues can be a drain on revenue. What are we up against?

  • yard management chaos, long dwell times, and detention fees
  • stock-outs and inventory disruption
  • finding and retaining labor
  • marketing your business

We don’t have time in this post to solve all these issues. And this list certainly doesn’t cover all potential problems in warehousing. So, let’s address a cross-section of problems. Chances are good that you’ll find a nugget of information that can help what ails you. As such, what solutions do we have that can help remedy the common warehouse ailments? Let’s dive in.

As you can see, every conversation about problems in warehousing should begin with problems in yard management. After all, problems in your yard tend to become problems under your roof in short order.

Yard Management Systems Bring Order to the Chaos

The story goes something like this. One Wednesday in the middle of April 2020, every locked-down American sat on the couch wondering if we were all going to die. To combat that existential terror, we made one collective gesture as a show of unity. Everyone made an online purchase at the same time. That began a trend that we now call the e-commerce boom.

As a second-order effect, after the e-commerce boom, yard management systems (YMSs) became vital. The reason for this was twofold.

First, the bolus of transactional traffic threatened warehouses with increased operational costs. But Covid-19 restrictions and social distancing measures meant fewer workers to unload trucks. Corresponding inefficiencies lead to detention charges.

In turn, the warehousing, supply chain, and logistics community became serious about integrating YMSs. The technological tools of a YMS increase visibility and optimize processes. In essence, YMS software helps track, stage, and streamline both inbound and outbound warehouse traffic. That can reduce dwell time.

When a YMS integrates with a digitization partner, a warehouse’s entire operation can become paperless. More on that later.

Dual-Source to Avoid Stock-Outs and Inventory Disruption

As the supply chain crisis rolled on, long lead times became the norm. What was once a six-week lead time became six months. Eventually, it seemed like lead times stretched to six years—which is only slightly better than never. Inventory issues and stock-outs are a later introduction to the narrative of the supply chain crisis, which is a concerning trend. Because as we know, in the warehousing industry inventory is the lifeblood of your business.

Inventory counts certainly must be accurate. When the count is off, you can solve it two ways. First, by throwing more time and labor at the problem. In short, make it someone’s full-time job to count inventory. If it’s a big enough problem, make it someone’s job all day, every day. Count everything that comes into your warehouse the moment it arrives on the dock. Unpack each box if you have to. It’s work, but you can get it done and get accurate.

The other option is to work smarter, not harder. I suggest investing in warehouse management software (WMS). Ideally, your software will digitize in order to integrate with your YMS and other software products. Use a barcode system, RFID, or QR code system to track your product from point A to point B, and everywhere in between.

But if your supply chain is disrupted or severed, it’s time to find another supplier. Dual-sourcing was considered inefficient in the recent past. But without lifeblood pumping through the system, you die. So, begin the process of dual-sourcing now. Don’t hesitate. Don’t hold on to antiquated lean principles. If your antiquated system doesn’t like two sources for one product line, change your system.

How to Find and Retain Labor

Where did all the good labor go? And how do we stay competitive on pricing when there’s so much pressure on our overhead costs? Labor rates and overhead are an issue. We must pay our people a fair wage, first and foremost. That’s not rah-rah talk. When the gas station on the corner is offering $15 per hour and $1,000 signing bonus for no experience and no education, you either match it or don’t hire.

I understand the pressure on overhead. But each employee has overhead, too. With rising gas prices and inflation, it’s a struggle for the working class to stay afloat. It doesn’t take much to stay ahead of the competition. Do your research, and figure out what your competitors are paying.

Figure out where you can beat them, and then get your talking points clear. Break down all your incentives to an hourly number. Do you offer health insurance? Dental insurance? A 401(k) match? Holiday pay? Or a year-end performance bonus? Break down the value of those incentives to an hourly number. You may offer $15 per hour, but after all the additional incentives, the apples-to-apples comparison might increase the value of your opportunity to $20 per hour.

Along with formalizing your competitive advantage, differentiate the opportunity at your organization. In my opinion, people simply want to feel good about their story. Put another way, everyone is the hero of their own life. So, sell candidates on the bigger picture. For starters, the supply chain has never had a higher profile. Maybe you work with name-brand customers, and that carries a certain status.

Along with dual-sourcing comes a Made-In-America patriotic story. Also, figure out what roles in your organization are résumé builders. For example, can you offer an opportunity that involves technology or a skilled trade?

Market Your Business

Here’s something many warehouses didn’t need to worry about much during the e-commerce boom: marketing. Customers and clients were beating down our roll-up doors, weren’t they? The search for warehousing space had customers coming out of the woodwork. But even when times are good, we can always find more and better customers, right?

You may have the perfect relationship with all your customers. You may have a diversified portfolio. But if you do, why not scale? Grow your business, replicate your revenue and success. Suddenly, marketing becomes a problem in warehousing again. So, how do we make our warehouse stand out in order to attract new customers?

First and foremost, you must present a picture of health. What does healthy look like in warehousing? Some of it is a you know it when you see it. If you’re struggling with the eyeball test, I recommend considering the classic lean principle Five-S to keep everything organized and orderly from the top down.

Beyond that, promote any and all of your best KPIs. It helps if your KPI reports are backed by data. This circles back to your YMS, WMS, and other software systems. If I was a potential customer and had to choose between a warehouse that had integrated technology and one that didn’t, I’d choose the integrated warehouse every day.

Treatment Plan

We’ve covered a lot of problems in warehousing today. In some ways, these are second-order issues that have cropped up as a result of earlier storylines in the supply chain crisis. So, it’s worth pointing out that we need to keep searching for the root cause of all our problems. That involves looking backward.

But we also must keep looking forward. And we must take action today. If you’re looking for a good way to maintain health during the ongoing digital revolution, I recommend looking into digitization with a software company like Vector.

This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.

 

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