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Weathering Inflation with a WMS

Since the beginning of 2022 the subject of inflation has been on most people’s minds. Inflation percentages have hit record highs and have had a big impact of the global economy and as a result on people’s wallets. With both businesses and consumers both feeling the strain from soaring energy and raw material costs, businesses will be focusing on their supply chains for ways to mitigate the impact.

This is especially true for companies that carry inventory like manufacturers and distributors. Higher costs for raw materials cut into profit margins. But passing off inflationary costs onto the customer may not be a sustainable strategy or even possible. Energy costs directly correlate to increased logistics costs and, in the end, affect a company’s bottom line.

McKinsey & Company remarked that CEOs, and by extension business leaders, need to think in broader terms when it comes to performance rather than narrowly focusing in on inflation’s impact on profitability. One of the key questions it asked company leaders to ponder was ‘What is the fastest way to stabilize and redesign stretched and, in some cases, broken supply chains? What capabilities will I need to increase my company’s resilience and control costs?’

With that in mind one area a business can look to which they have complete control over is their own warehouse operations and how they can limit controllable adverse effects. Here is where a warehouse management system (WMS) can provide real value and help to minimize inflationary pressures of warehousing and logistics operations.

Storage space usage is everything when it comes to warehouse rates and costs associated to inventory. With a global shortfall in adequate warehousing infrastructure space for storage is becoming more expensive. A WMS is a great tool for efficiently making the best use of the storage space within a warehouse. By tracking storage location capacities as well as implementing an efficient putaway process a business can maximize their own storage capacity and avoid scenarios where they might have to pay a premium to a third party to rent more storage space. The putaway process can even be automated where the system, based on pre-defined or pre-known conditions can suggest to workers where items should be optimally stored. Factors like item storage requirements, item popularity, ease of picking, item putaway and picking times, and more can all be incorporated to manage storage space efficiently.

Many warehouse operations within a business have quite a few manual tasks which are either unnecessarily time consuming, tedious, or else open to errors. Many of these are in place as either a check and balance or necessary for one reason or another. A WMS can automate many of these types of tasks and points within your various processes. By automating the parts of your processes that can be you’ll eliminate errors, avoid roadblocks, choke points, and maximize your team resources. Furthermore, mobile scanning can be leveraged with process automation and will prove beneficial to your teams as they will now be able to work in a total mobile environment. This will give them all the tools they need to work with a measure of autonomy and independence which will increase productivity. This will provide huge savings in time and will control costs which in turn helps during higher inflationary or uncertain times.

When dealing with inflation the more data you have about your business the better. Having a platform that can accurately accumulate and then provide meaningful reports is crucial. This is where a WMS can prove invaluable. A WMS with robust and advanced reporting tools can help you draw insightful conclusions based on your warehouse operations and how they correlate to the rest of your business. Say raw materials are suddenly eating away at your margins or logistical costs are putting pressures on your bottom line. Perhaps there are low selling products that incur high storage or shipping costs. Whatever the case may be a WMS can track these types of data points and then report back to you on these. In turn, procurement teams, supply chain leads, and warehouse managers can then start to look at ways to mitigate these costs and find alternatives. By having actionable data a business feeling inflationary pressure can be better prepared to navigate these negative headwinds in a systematic way.

Of course, a robust WMS along with warehouse optimization aren’t a cure all for acute inflationary pressures that a business may face. Yet it is part of what should be a holistic business approach with the aim of mitigating its effects for however long it continues to be an issue. What’s more is that these same principles will improve your business in economically favourable times. By implementing a WMS a business strengthens its ability to react and become flexible during periods of inflation and uncertainty while reinforcing their overall warehouse operations.


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