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Posted January 8, 2016

The Future of DCs and Warehouses

Data Driven, Agile and Real Time

by Howard Coleman,
MCA Associates

Howard ColemanAs a consulting firm, MCA Associates has done some great work, I believe, with our wholesale distribution clients in modernizing their distribution centers and warehouses. This work has resulted in significant increases in productivity, reducing transaction costs, avoiding future costs, improving inventory control, inventory accuracy and order fulfillment accuracy. Much of this has been accomplished through new or improved warehouse design as well as integrating new processes and equipment.

Having said that, we try not to think of ourselves as a ”hardware shop.” Of course, automation and process improvement does remain pretty cool stuff. But, time after time, we see the need for better enterprise software and analytics utilization to support warehouse management. Specifically, the ability to connect people, processes and data in such a way that is usable and useful. So, the DC and warehouse of the future doesn’t have to be just about automation and materials handling and storage equipment.

I think it’s about ways to automate decision making and the myriad of mundane processes that are currently done by people; being more data driven, agile and real-time.

The key to the future of DCs and warehouses? It’s about the movement of data just as much as it is about the physical movement of product. In the future, this may take the form of greater utilization of bar codes or even RFID tags.

In other terms, it’s about knowing where you stand in order processing, the remaining workload, where it exists, and the labor required to assure on-time processing – and delivery. It’s about understanding “time-on-task” data, knowing how you are performing against expectations, not waiting for some report issued at the end of the week, but knowing right now! It’s about understanding and using data to reveal the root-causes of waste – particularly wasted time. It’s about understanding the data to drive you towards what picking and put-away methods are best for specific products and/or warehouse storage areas. It’s about knowing when inventory adjustments should be made on-the-fly, rather than waiting for a scheduled physical inventory. And that’s just a sampling.

For instance, in the future DC or warehouse, a facility could use information received from a carrier or from an RFID tag on a pallet about the delivery of product needed for a hot order or backorder. The warehouse could then pull together and stage the other items needed for the order. Sure, bar coding isn’t new, but the processes in which we use them may be new! In other words, how we do things and use the data. An explosion of data!

One of the biggest obstacles, I find, is the change in mindset required, not thinking beyond the traditional, in order to thrive. I can tell you for sure, though, getting data savvy in your DC or warehouse will be crucial. The businesses that standout, that differentiate themselves, will be the ones that understand that they need swift, responsive systems and data capabilities they can wield to ensure survival in their ecosystem.

Fortunately, it can happen right now.

Howard W. Coleman is principal of MCA Associates, a management consulting firm that works with wholesale distribution and manufacturing companies that are seeking and committed to operational excellence. Our staff of senior consultants provides operational excellence – thought leadership  and implements continuous improvement solutions focused on business process re-engineering, inventory and supply chain management, sales development and revenue generation, information systems and technology, organizational assessment and development, and family-business succession planning. MCA Associates may be contacted at 203-732-0603, or by email at hcoleman@mcaassociates.com. Visit our website at www.mcaassociates.com.

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