Driving visibility and productivity with better inventory management
BY GARY RIPPEN
Special to The Wholesaler
Most distributors will say that the number one issue impacting their productivity is effective management of inventory. Although certainly not a new problem, increasing competitive pressures coupled with ever-extending supply chains has made inventory management more complex. Even with the use of a warehouse management system, many distributors still do not have comprehensive visibility into their inventories.
Though a good warehouse management system can improve order accuracy, automate manual processes and enhance customer responsiveness, it often limits inventory monitoring to within the warehouse. Distributors, however, are responsible for goods in transit, in the yard and on the dock -- not just those sitting inside their four walls.
To truly drive efficiency, distributors must have transparency throughout the value chain. Even if a distributor has dock and yard management systems, they may not have a complete view of their inventory. Unless fully integrated with a warehouse management solution, these disparate systems will create silos of information that can’t be readily shared across the organization. This leads to inventory redundancies and delivery delays, which jeopardize a company’s productivity and profitability.
Therefore, distributors need to make sure the data collected by dock, yard and warehouse management systems can be communicated in real-time to all stakeholders within the company. By tightly coupling all three systems, distributors can reduce costs, enhance customer service, and drive efficiencies throughout the company.
Bringing goods in from the yard
The ability to coordinate yard movement with receiving and order fulfillment processes is essential to effective inventory management. With a yard management system, distributors gain visibility into items sitting in trailers waiting to be checked into the warehouse. They are also better able to manage, schedule and record the arrival, placement, location and status of trailers, trucks, containers and their contents.
With an integrated yard and warehouse management system, warehouse personnel know what trailers need to be moved, their location in the yard, as well as their destination. For example, a customer could call regarding a particular item and the warehouse does not have it on the shelf, yet the system shows there are 50 pallets of the product in the yard. This information can then be conveyed to the yard manager, who can identify available staff to retrieve these goods in an efficient manner, effectively completing the order.
Additionally, work tasks can be matched with trailers in the yard, and inventory can be replenished correctly using first-in, first-out methodology or based on customer demand or minimum replenishment levels. With better tracking, improved appointment scheduling and directed yard management processes, distributors can optimize inventory flow, improve visibility and lower yard costs.
Differentiating on the dock
There was a time when inventory management was simply defined as controlling product levels. Today’s business managers must also control multiple locations. The same stock item that flies off the shelf in Seattle may barely move in Pittsburgh. The visibility to accurately predict demand and effectively coordinate the movement of goods to meet that demand is essential to a company’s success. Time delays in coordinating customer orders with deliveries can have adverse effects on a distributor’s reputation and bottom line.
In fast-moving industries such as consumer goods, food, retail, drug and grocery, cross-docking is increasingly recognized as an indispensable way to increase inventory speed and throughput. All too often, goods that arrive at the dock cannot be checked into the warehouse quickly enough due to labor shortages or heavy workload. Cross-docking bypasses the put-away process altogether; instead, it allows warehouse personnel to coordinate incoming shipments with outbound orders. Distributors can consolidate incoming inventory from multiple shipments into a single truck for customer delivery, improving customer service and capitalizing freight economies.
Designed to address issues of warehouse workflow such as receiving, product movement, shipping, picking, and counting, cross-docking offers a high degree of flexibility. Flow-thru can be utilized to deconsolidate receipts based on retail store allocations, or consolidate them with previously picked products in the staging lane, so each store gets the inventory and quantities needed in the same shipment. Trans-shipment capabilities allow companies with pre-packaged, pre-wrapped pallets to unload pallets and packages and get them to outbound staging lanes for fast loading on outbound trucks. Opportunistic capabilities enable companies to review outbound orders, see where outstanding shipments are, and move product directly to the outbound staging lane to fill gaps. As a result, freight can be commingled and consolidated, quickly ensuring each outbound delivery meets service level requirements.
Distribution is a fast-paced and competitive industry with lots of moving parts. To prosper, companies must be able to move beyond the immediate to seek out and adopt new growth strategies, while maintaining costs and adding value in everything they do. An organization’s success will depend on its ability to quickly source materials and work better with new suppliers by seamlessly integrating them into its end-to-end supply chain. Ready access to information about suppliers, inventory levels, outstanding orders and shipments translates to cost control and rapid order turnaround.
Proper inventory management is the key to a successful distribution operation. A holistic approach to managing inventory that incorporates the yard, dock and warehouse provides everything distributors need to handle the toughest inventory problems-from establishing reorder points, to fine-tuning sku placement to accommodate variable demand, to automating the hand-off of goods between warehouse, dock and yard personnel. This enables companies to establish the best possible inventory management technique for their unique business requirements so they can effectively respond to changes in the market, seasonality and customer demand.
Gary Rippen is the Wholesale Distribution director of industry and product marketing for Infor, a leading global provider of enterprise software. Rippen has more than 15 years in the distribution industry and is responsible for building on Infor’s considerable strengths to help drive measurable business growth among existing customer communities and distributors facing strategic change. For more information, contact inforinfo@infor.com.