MHI Solutions Community
BY CHRISTIAN DOW, EXECUTIVE VICE PRESIDENT OF MEMBERSHIP AND INDUSTRY LEADERSHIP, MHI
If warehouse workers are constantly bumping into each other while navigating high-traffic aisles, then hiring more manpower likely would add to the chaos instead of boosting throughput. Likewise, moving into a bigger warehouse, a tremendous undertaking with a hefty cost, is no quick fix for businesses experiencing prolonged growing pains.
That was the dilemma facing a major distributor of bicycle parts before the company implemented a warehouse management system (WMS), unlocking the power of data and automation. The WMS quickly paid dividends for that client, increasing productivity 30-40%, according to Bill Denbigh, vice president of marketing for MHI member Tecsys.
Using handheld devices connected to the WMS, workers went from picking orders one-by-one to grouping orders together, picking a bunch of the most commonly purchased products in a single pass through the warehouse. Guided by the WMS, pickers were now taking the most efficient path through the warehouse, and popular products were positioned closest to the packing stations to reduce wasted movement.
“Workers were all moving in the same direction, so they weren’t colliding anymore,” Denbigh said. “The WMS allowed them to finish picking at 2 p.m. instead of working late into the night. They were able to pick orders that day to deliver to the customer the next morning because they now had a system that let them hit their customer-service cutoffs.”
Amid rising costs to borrow capital and to acquire workers and warehouse space, some supply chain professionals might think it’s a bad time to lobby the C-Suite for a new WMS. But if you come armed with data building the case for a quick return on investment, the C-Suite might prove more receptive than you’d think, according to Ashley Rhodes, systems project manager for MHI member St. Onge Co.
“I have quite a few clients who are interested in implementing a WMS,” Rhodes said. “The fact that labor costs are rising is one of the main things I would mention to the C-Suite. I’ve had clients realize their ROI within two years. A lot of those savings come through automating manual processes that require a lot of paperwork. That’s where you’re likely going to see the biggest bang for your buck.”
With a WMS, warehouses typically require fewer workers and are better positioned to retain their most productive employees, according to David Teitsma, account executive with MHI member Ascent Warehouse Logistics.
he WMS’s online dashboards allow managers to track operations in real time and redirect labor to areas that are falling behind. Since managers know their team’s average picks per hour, they can gauge whether they’re on pace to achieve their output goals for the day and take corrective action if necessary.
When workers must walk fewer miles to pick products, the job is less demanding, which reduces turnover. Managers also can reward their best workers by gamifying processes like picking or packing orders. Top employees may receive gift cards or bonuses for winning production competitions, and when it comes time to hand out raises, the reports generated by a WMS make it easy to identify the most-deserving employees.
Young employees have grown up with technology such as smartphones and computers, so businesses that still rely on paper checklists and tedious, manual processes risk alienating a large portion of jobseekers, Teitsma said. Some companies learn that lesson the hard way, sifting through dozens of resumes, conducting many interviews and making multiple offers to land a single new hire, then watching that hire walk right out the door.