Cutting Warehouse Management Costs - Element ID

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Cutting Warehouse Management Costs

Warehouse functions include receiving, shipping, moving, picking, cycle counting and general inventory management.

Shipping late or incorrectly hurts your business and impacts your customer relationships. Even with a great shipping department, mistakes happen. Automation can provide many benefits like RFID portals automatically checking what is going though a dock door against what is on the invoice or shipping manifest. Even using handheld barcode scanners improves accuracy and speeds the shipping process.

Handheld barcode or RFID readers allow paperless picking and can reduce loading time and improve accuracy. Similarly, automated systems can accelerate the receiving process and allow data to be entered directly in the ERP system against your initial purchase order.

Customers frequently complain about the difficulty knowing what they have and where it is. Manual systems break down because people just forget to write it down or it gets copied incorrectly when entered into the computer. These systems have the most trouble during busy times when the priority is on moving materials around. Picking for shipping or clearing the production floor and getting finished goods into the warehouse take priority and the location information just doesn’t get recorded.

Using RFID and barcode can greatly reduce the time involved in capturing the data and RFID portals can completely eliminate the human element. When hand scanning is used, adding portals at key choke points are a great way to add an “audit” feature. The portals will capture everything passing through and an exceptions report quickly highlights any items moved through the choke point that lack a proper “put away” or “move” transaction in your WMS (warehouse management system) ERP system.

Tracking your inventory lets you reduce double ordering and spoilage. Simply tracking inventory has been estimated to reduce shrinkage by 5-10%. Less inventory means less space needed, lower insurance costs, and less personnel hired only to search for product. (You are not alone – a lot of companies have these “searchers”!)

Cycle counting is significantly faster with RFID. Because no line of sight is required, simply pointing and waving a handheld RFID reader toward a storage location and holding the trigger allows for extremely rapid cycle counting of tagged items.

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Benefits

Companies that implemented tracking systems have significantly cut warehouse management costs1

  • Up to $600MM in out-of-stock supply chain cost reduction
  • Up to $180MM in savings in inventory costs

Companies that implemented tracking systems have experienced significant improvements to manufacturing efficiency

  • Reduction in labor costs up to $6.7B2
  • Increase in warehouse productivity up to 40%3
  • Savings up to $300MM via improved warehouse and distribution tracking4

Tracking systems are critical to cutting inventory costs5

  • Companies employing RFID have reduced inventory up to 15%
  • Companies with tracking systems have reduced inventory-related labor costs by over 25%

Automation technologies are essential to reducing asset tracking costs6

  • Companies with automation systems have seen reductions in product losses around 5%
  • Savings on new containers and equipment exceeding $5MM annually

Typical Equipment Used

Business Problems This Can Help Solve

  • How can I track everything I have in the warehouse in real time?
  • How can I cut inventory management costs?
  • How can I find my inventory faster?
  • How do I reduce cycle counting time and cost?
  • How can I track inventory at another warehouse?
  • How do I reconcile production output vs warehouse stock reporting?
  • How can I streamline the picking process?
  • How do I fix errors between staging-to-ship and actual shipping?
  • How do I reduce paperwork in the warehouse?
  • How can I get data on what is in stock into my ERP system so I can better plan production?

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References

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