Harnessing warehouse management analytics for smarter operations

The rise of e-commerce has transformed the supply chain management landscape, presenting challenges and opportunities for industry leaders. Inventory management has taken on a new dimension with customers now enjoying unprecedented access to a wide range of products.  

However, by effectively harnessing warehouse management analytics, companies can achieve significant growth and adapt to the evolving demands of smaller package sizes. To fully leverage these analytics, supply chain leaders must understand the limitations of traditional warehouse management styles, recognise the benefits of analytics-driven approaches, and adopt best practices to maximise their potential.
 

Overcoming the Challenges: 

Analytics can be overwhelming due to their complexity and the need for comprehensive data tracking and analysis. Many supply chain leaders were not trained in the era of data-driven decision-making but rather focused on managing large quantities. The growing prominence of data scientists reflects the increasing demand for analytical expertise, yet organisations often struggle to initiate data analysis initiatives.   

Traditional warehouse management models were designed for moving a limited number of SKUs, predominantly palletised or in some cases, from manufacturers to distribution centres, resellers, and customers. However, the surge in e-commerce has introduced a substantial volume of small orders, necessitating a shift in management strategies.

Unlocking the Benefits: 

Warehouse management analytics offer several key benefits, reflecting the ongoing process optimisation in modern supply chains. These benefits can be grouped into five broad categories: 

1. Better marketing efforts: Enhanced understanding of customers enables continuous refinement and targeted approaches to meet their needs through online and in-store experiences. 
2. Merchandise optimisation: Analytics assist supply chain leaders in optimising inventory layout across various shipping channels, maximising purchase opportunities. 
3. Adjustments within the supply chain: As e-commerce expands, reaching customers in emerging markets with limited supply chain infrastructure requires adapting and enhancing distribution networks. 
4. Enhanced store operations: Utilising buy online and pick up in-store (BOPIS) models leverages supply chains by shipping items from distribution centres to stores or utilising brick-and-mortar staff as “pickers,” resulting in higher profitability through faster inventory turnover. 
5. Improved cybersecurity: Continuous analytics-based testing of company programs, platforms, and firewalls enhances supply chain cybersecurity while facilitating information tracking for overall operational improvement. 

Best Practices for Implementation: 

To successfully implement warehouse management analytics, supply chain leaders must redefine the concept of a warehouse in the modern context. Beyond traditional facilities, this may involve managing distribution centres, brick-and-mortar stores as fulfilment centres, localised e-commerce fulfilment centres, and more. Several best practices should be followed:  

1. Recognise facility needs, such as space requirements, to align analytics implementation accordingly. 
2. Identify potential system vendors capable of supporting analytics-driven warehouse management. 
3. Think creatively and expansively when exploring analytics applications, considering any trackable activity or process within the warehouse. 
4. Leverage automation during system configuration, testing, and ongoing maintenance for increased efficiency.
5. Take advantage of microservices to facilitate testing of new services, functions, or capabilities. 
6. Establish connections between data aggregators and analytics platforms to ensure seamless data integration. 
7. Consider partnering with a supply chain systems integrator to optimise the utilisation of analytics capabilities. 

Deploying Analytics for Success: 

Implementing the right analytics strategy in warehouse and supply chain management can be transformative. However, the subjective nature of analytics makes getting started challenging. Seeking the guidance of warehouse management experts can provide valuable assistance in navigating this transformative journey.

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In the age of e-commerce, warehouse management analytics have emerged as a game-changer for supply chain leaders. Companies can unlock new opportunities, save costs, and effectively manage resources by understanding the flaws of traditional warehouse management, embracing analytics benefits, and adopting best practices. Partnering with experienced warehouse management professionals to embark on this analytics-driven path is an essential step towards achieving sustainable success in the dynamic e-commerce landscape.