W hile reining in costs and accelerating warehouse operations are worthy goals at any time, their importance is increasing, driven by an uncertain economy, volatile geopolitical environment,
products as received once they cross the facility’s sensor threshold, streamlining the goods receipt operation. The tags also reduce the risk of miscounting or incorrectly scanning goods, so companies can move inventory more quickly and with a higher degree of accuracy. Similarly, placing inspection services on site within a food or cold storage facility at a port of entry enables products that require inspection to more quickly enter the U.S. domestic market. And by evaluating their warehouse and distribution networks, companies can identify the locations that balance efficiency with customer service. The companies highlighted here are leveraging technology and revamping processes to address the challenges their warehouses face. As they do, they’re cutting expenses and improving operations, while boosting
expensive real estate, and a challenging labor market.
“It’s all about cost and speed right now,” says Ashley Hetrick, principal and sourcing and supply chain segment leader with BDO. The two goals often support each other. Moving goods in and out of a facility more quickly generally lets a company operate with fewer employees and in a smaller space, cutting both labor and real estate costs. Many warehouse operators are foregoing capital-intensive solutions for those that incorporate relatively cost-effective tools, such as data
To address high inventory costs for its large, bulky products, U.S. Cellular consolidated from 12 to six warehouses, and boosted forecasting.
customer service and labor efficiencies.
analytics and artificial intelligence (AI). These can help companies quickly identify opportunities for improvement, for example by highlighting picking operations that take longer than average, and showing how a different layout could accelerate them. Artificial intelligence that drives predictive analytics is also moving into the cold storage space, says Brad Hulbert, director with Grant Thornton’s business consulting group, specializing in supply chain. It can aid in forecasting demand, which is critical with many of these products, given their limited shelf life. Also in demand are predictive models that can help in analyzing rapidly changing markets, says Nick Stuart, retail and restaurant consulting leader with RSM US. For instance, wary of ongoing supply chain disruptions, some companies are pulling inventory orders forward. This reduces the risk of stockouts, but also makes inventory volumes more volatile and planning more difficult. Predictive models can help address these challenges. Robotic automation can offset both labor shortages and higher wages. And as their costs drop, robots are becoming more accessible to middle market companies, Stuart says. It’s also possible to implement robotics in stages. This helps companies space out their investments, and prove the use case before making a huge commitment. Some warehouses with slightly higher budgets are looking to access even more data and insight with smart sensors, such as RFID tags, Hetrick says. When attached at the point of manufacturing, RFID tags let a warehouse account for
SIGNAL BOOST: U.S. CELLULAR DIALS BACK COSTS
Several years ago, U.S. Cellular’s network supply chain group was managing one dozen warehouses across the country. Among other responsibilities, this group supports the building and maintenance of the company’s wireless network; handles strategic sourcing for building towers, fiber, and general contractors; and oversees the warehouses. Too often, the group’s inventory wasn’t located where it was needed most. “We spent a ton of money transferring inventory between warehouses,” says Amy Augustine, senior manager, logistics operations. Given the size of many of these products, the costs could quickly add up. U.S. Cellular conducted a network distribution study, which revealed that six warehouses was “the sweet spot‚” that could support the wireless network on a timely basis, while keeping costs in check, Augustine says. The team culled and consolidated inventory within the remaining warehouses, recycling older cabling, radios and other products. A new planning and forecasting team leveraged data from the company’s ERP system and mapping tools to assess where it made sense to stock various inventory items. Another step was to shift from bulk ordering equipment. While this allowed for volume discounts and reduced the risk of stockouts, it often meant that equipment had to be moved from one warehouse to another.
May 2025 • Inbound Logistics 33
Powered by FlippingBook