Whether you rent or own, warehouses come with high costs for any operation. In the U.S., pricing for physical space is at a premium and steadily rising. Add in labor, equipment, racks, and maintenance, and it can be hard to find room in a warehouse budget for upgrades. That means companies tend to put them off until sometime dire happens.
Don’t put your operations at risk by waiting once the warning signs are there. Avoid becoming a cautionary tale by staying alert for indicators such as mis-picks, tech hurdles, cluttered space, and waiting trucks. Here’s what those signs may look like for you and a few ways to respond.
Mis-picks are on the rise
Warehouses and fulfillment operations live and die by metrics. One of the most important is the mis-pick rate, especially if the warehouse lacks other verification before packing. When mis-picks increase, costs can rise exponentially. You’re potentially paying for additional shipping twice (return and replacement), losing products that expire or can’t be returned, and increased labor for returns processing.
When mis-picks increase, companies need to review processes and the warehouse itself. Suboptimal layouts and outdated technology can mean pickers are always in a hurry. SKU overcrowding makes it much easier to pick the wrong item, especially if you offer a product in multiple sizes.
Warehouse upgrades to target mis-picks include increasing your physical space, auditing options, and adjusting travel lanes, and implementing scanners to verify SKUs during the picking process.
You can’t implement the tech you need
Technology is the primary way companies respond to mis-picks because many wearable devices and even smartphones can scan barcodes and link with inventory tools. Unfortunately, warehouse designs and structural elements might limit your ability to use these solutions.
Modern warehouses need reliable, fast Internet connections and space for tech as well as inventory. You might be due for an upgrade if connection speeds prevent real-time updates or if your network doesn’t cover the entire warehouse floor. Check if you need an electrical upgrade, too, because increased demand from servers, equipment racks, and new tools may lead to tripping or overloading a circuit.
Returns and kits don’t have their own place
As companies grow, their products tend to diversify. In the eCommerce arena, that tends to include kits and subscription options. Those options can increase recurring revenue but require increased production space to store materials and assemble boxes. Kits can be assembled before an order, speeding up fulfillment but needing dedicated shelving or storage. Scaling also goes hand-in-hand with increased returns processing.
This growth creates two demands on space that often lead companies to move to a larger warehouse or outsourcing to a 3PL that has relevant experience and available space. Shrink your inventory holding or expand your real estate to meet these needs. As you grow, there are few options. Waiting too long to increase the available physical space can quickly lead to mis-picks, lost items, damage, and products that languish on back shelves or forgotten racks.
Your dock has become a logjam
If time is money, loading dock issues could be costing you much more than you realize. Poor scheduling, slow unloading, manual inventory updates, and accidents all increase that cost. Dock issues are a clear sign that you should upgrade your space to minimize risks to your people, operations, and margins.
One of the best operational upgrades a company can make is to switch to dock scheduling software. Options generally integrate well with order management tools, making it easy to book appointments. They’ll help you plan and make the best use of your team and tools while ensuring you’re getting trailers and deliveries that work with your dock doors.
You may need to move to a large facility or significantly change your loading area layout if there’s not enough physical space to offload trucks quickly. Inbound inventory needs ample room, and tight spaces make it easy to miscount, trip, fall, or damage goods with handcarts and forklifts.
If your dock operations are leading to common accidents, it’s time for an immediate upgrade. Protect your people and give them the improvements they need to work slowly and safely. It’s the most important upgrade you can make.
Bring it back to change management
The need to upgrade a warehouse typically comes after discovering a process issue. Team leads or managers notice a problem and trace it back to fulfillment. That’s true for declining customer service, increased costs, complaints from carriers or partners, and much more. To respond, a company looks at undertaking a directed improvement with new people, processes, tech, or location. Typically, that means multiple options for how you upgrade.
The most beneficial problem resolution is one that sticks. That reality makes change management a core feature of success, though it can often be left out during decision-making. Give your team and operations their best chance at an upgrade with a positive ROI by considering teams and current practices when you weigh your options.
Letting change management guide problem resolution helps ensure your team gets an initial benefit and can maintain it. From there, you can continue to refine and maximize that gain. And, in some cases, you might realize that reliable change requires more capital than you have for the improvement. Outsourcing may then be your most effective solution and choosing a reliable 3PL means you’ve got successful change management built into the decision.
