Introduction to Warehouse Challenges
Warehouses are an intricate ecosystem with several different processes working in tandem to serve customers effectively. Warehouse management challenges act as a major roadblock in the efficiency and productivity of the warehouses and can cause serious damage to the complete warehouse workflow.
Recent events have warranted warehouses to change their business dynamics and stay profitable while fulfilling customer orders as well and the best way of ensuring sustainability and longevity for your warehouse is to overcome some of the common warehouse management challenges.
Managing laborers efficiently, making the most use of available warehouse space, and adapting to seasonal demands and other issues require warehouse managers to stay on top of their game at all times and get ahead of warehousing challenges.
Let's explore some of the key challenges in warehouse management.
Top Warehouse Management Challenges
This article will highlight 10 of the most common warehouse management challenges and how they affect your business.
1. Inaccurate Inventory Information
Inaccurate inventory management can be one of the several warehouse challenges. It causes picking problems as workers can go to a location where the product isn't available. The same can happen while storing products in a location that's already full.
Manual processes of updating inventory data lead to improper stock information, the buildup of obsolete inventory, and workers spending a lot of time in physical checks and error correction.
These less-than-optimal processes end up wasting a lot of valuable time and money for the warehouse being one of the most crucial warehousing challenge.
Incorporating Hopstack's automated warehouse management system that has a robust inventory management and optimization module can help automate all these activities and alleviate errors.
2. Inefficient Space Utilization
A poorly configured warehouse can cause challenges in inventory management for the warehouse manager. The average warehouse capacity utilization is only 68% proving that warehouse spaces are not being utilized efficiently.
With an optimal layout, warehouses can utilize their floor and vertical space better to store as many products as possible making layout optimization the perfect counter action to warehouse challenges.
Warehouse setup mistakes can also lead to unnecessary time wastage in searching for high-frequency and fast-moving items. The setup inefficiencies have a direct impact on profitability as the more time a picker spends in finding a product, the fewer orders they can fulfill.
3. Improper Labor Management
Labor costs can comprise nearly 65% of the total warehouse budget. Laborers are an integral part of the warehouse and managing them effectively can improve the overall productivity of different warehouse processes.
With staff ranging from associates to managers, and the availability of expensive equipment, managing a large labor force can become chaotic and complex leading to major warehouse management challenges.
Warehouse managers have to make important decisions for getting the most out of the available workforce. They have to find areas where automated systems can pitch in to reduce labor costs and make the order fulfillment process more efficient
4. Following Rudimentary Processes
While warehouse digitalization is picking up speed in several industries, most warehouses are still following obsolete paper-based processes. Challenges in warehouse management like manual data entries, excessive handling of products, and passing the same ticket among different workers can be time-consuming and costly.
With business dynamics changing post the COVID-19 era, warehouse managers need to adapt and evolve quickly. 77% of the organizations are serious about automated warehouse systems and mapping a plan to maximize data-driven performance.
Using modern warehousing technologies such as barcode scanners helps in streamlining warehouse processes and counter problems in a warehouse. Automated warehousing systems move fast, complete tasks more efficiently, and eliminate duplication of efforts.
5. Adapting to Seasonal Demand
Changing customer demands is something the warehouses can't control, but it is one of the key challenges of warehousing. Seasonal changes, economic cycles, trending products, and other factors lead to fluctuations in customer demand.
The shifting customer demand cycle poses some serious challenges in warehouses in terms of product fulfillment. There can be a dip in sales in some months while demand can surpass inventory levels in other months.
Keeping a balance between demand and supply is very essential for the fulfillment process. There shouldn't be any gaps between the warehouse and other aspects of the supply chain, especially procurement and transportation.
Hopstack's advanced WMS and prep center software helps warehouse managers in responding to changing demands more effectively. They can bring changes in product placement, order in-demand stocks early, optimize the picking module, and manage their transportation network properly.
6. Substandard Picking Process
Picking is one of the most important steps in any warehouse. It causes some of the biggest problems in warehousing as well. As soon as an order is placed, a picker is assigned with the responsibility of completing the full order. If picking isn't done efficiently, a lot of time would be wasted in fulfilling a single order.
There can also be picking errors and inventory issues that delay the process even further. This hinders the warehouse's fulfillment process and its capability of fulfilling as many orders as it can.
50% of a picker's time is spent in movement and not picking items. Picking should be done in an optimized way to minimize movement and time consumption. Enhanced inventory layout and warehouse automation systems reduce picking errors and increase picking efficiency.
Proper data capture and storage also make it easier for pickers to identify which product is placed where. Hopstack's Warehouse Platform boasts of an advanced picking module that utilizes AI algorithms to create optimal batches to improve picking efficiency.
7. Flawed Order Management
With the advancement in technology, consumers have multiple sources for ordering a product. For a warehouse with an omnichannel sales channel, managing customer orders coming from multiple channels can be a tedious task and complete warehousing challenge.
Orders can come in from company websites, e-Commerce portals, offline sales channels, and more. Excel sheets and pen-and-paper-based methods can give rise to several errors in order management and fulfillment.
This can lead to challenges with capacity allocation, pickers being sent to retrieve incorrect orders, and customers receiving something they didn't order. For such problems in warehouse management, an order management system is a must.
8. Managing Heaps of Data
Warehouses can generate a lot of data while executing different processes. While this data can be too large to manage and analyze manually, it holds valuable insight for improving warehouse productivity and making it more efficient.
Tracking goods movement through the supply chain, managing logistics operations, multiple delivery channels, and dealing with the returned or damaged products can be a herculean task for warehouse managers, especially for the small and medium-sized warehouses that don't have a lot of budget at their disposal.
Hopstack's advanced data-mining and analysis capabilities can help warehouse managers in having better visibility of their warehouse operations by transforming digital data into actionable intelligence.
9. Variety in Products Stored
Another one of the top warehouse challenges is that most businesses operate on the Pareto Principle where 80 of their sales come from 20% of the inventory.
However, constantly finding that 20% of products can be difficult given the frequent shifting landscape. With customer demands changing in an instant, warehouses are storing a wider variety of products than they did before.
Incorrectly forecasting customer demand and ordering large stocks of a product that end up staying on the shelves can hurt the warehouse's ROI. Similarly, having less stock of a fast-moving product will lead to warehouses missing out on customer orders due to unavailability.
10. Poor Quality Control
With hundreds of orders coming in and going out every day, quality control can sometimes end up taking a backseat. Due to the pressure of fulfilling orders quickly, workers can sometimes overlook key details during picking, packing, or shipping. This can lead to customers receiving poorly packaged, incorrect, or damaged products and having a forgetful shopping experience.
The pandemic has posed serious challenges for quality control as warehouses are trying to do more with less. Proper quality control can eliminate the hassle of returns and below-par customer service.
Intelligent warehouse management and execution systems like Hopstack help in digitizing different warehouse processes to make it easier for managers to keep an eye on every operational detail and help you overcome challenges in warehouse management.
Our team of experts collaborates with warehouses to understand their issues and warehouse challenges and offer solutions to help them in the long run.
Robust inventory management and optimization, paperless automated picking in warehouse, multi-channel order management, and seamless integration with devices increase warehouse efficiency which, in turn, enables them to serve more customers and grow revenue.