Warehouses and E-commerch Work Hand-in-hand

Surveys show that although the economy is suffering, e-commerce remains a strong source of sales for retailers. Consumers searching for deals employee the internet find them. Third party logistics companies are working harder than ever to assure high web traffic in order to attract buyers.

When assembling a commercial website, a web developer will typically work on including attractions like:

• The use of blubs, blogs, and community boards, which encourage consumer interaction. It is more likely that a consumer will purchase from a retailer that makes them feel part of a community.
  
• There is an increase in the use of “refer a friend emails.” In fact, 81% of ecommerce sites now utilize this resource.
  Ratings and products feedback again make consumers feel as if they have a say in product feedback and knowledge.
  
• Cross marketing technique that include offers that consumers could not take part otherwise tend to improve product sales.
  Banner ads along with newsletter sign ups are becoming popular as well.
  
• An attractive website with clear and complete product details give consumers the confidence to purchase.
  
• Warehouse distributors working with their web-masters will also want to work to provide good interactive search tools along with search engine optimization. Effective keyword searches are imperative to increased selling opportunities. There is nothing worse than to lose a potential customer because of an ineffective search engine.
  
• Consumers that shop on the web are more likely to make purchases if they feel confidence about the product and the retailer. Ensuring consumer confidence by the uses of credit and debit payments that is secure is essential to continuing success.

Make sure to visit your website often and test the effectiveness of the site. Do not hope that it works but make sure that you are happy with the results. One thing is for certain, if you do not like to use your own site, others will not either.

Sources
Vendorseek.com
Allbusiness.com/Research and Markets
Ecommerce guice

From Barge to Warehouse

When the U.S. was young, we took advantage of river ways to transport supplies quickly and efficiently, but with relative inexpensive fuel costs in the past, companies have remained faithful transporting goods over land. However, in recent years, the rising fuel costs have encouraged supply chain transportation managers to find alternative methods of transport. This alternative comes in the form of container-on-barge transportation methods. Europe has used this mode of transportation for years, but this is a new concept in the US.

The wave of the U.S. future follows Europe's example

Using the intermodal concept of transportation, often warehouses will arrange transport for goods across the nation; ideally, transporting commodities in the most efficient method. This system utilizes local water straights via shipping to transport containers rather than rail way or trucks. The container-on-barge method streamlines the process even further by reducing the amount of documentation along with the number of trucks needed to transport commodities, effectively reducing traffic congestion at the port.

The loads are reviewed and sorted according to color. Each color represents a destination or delivery method; for instance, truck or rail. For each container, the heavy crane operator receives orders for where it needs to go from port to barge and vice versa.

Warehousing facilities have become open to this concept because of the cost savings incurred and quicker turnaround times. Where it may have taken several days to convey commodities, now it may take three, effectively cutting transport time by half while fuel costs is distributed.

Sources
Port of New Orleans Launches Container-On-Barge Delivery
Sea Point
Bizjournals.com

Public Warehousing as a Resource

Sometimes we think about public warehouses as COSTCO where many vendors can sell their goods in bulk. Typically, the quality is very good yet the price is much more affordable than retail outlets.

The other public warehouse is the third party warehouse that handles all the risk on your behalf. Risk like:

• Technological changes that require regular updates or modifications of software
• Workers’ compensations claims and OSHA requirements are no longer your problem
• Short-term agreement to accommodate seasonal changes
• Space accommodated based on client requirement
• The advantage of specialized expertise in the industry
• Discounted rates based on volume activity
• The warehouse company is required to handle the document requirements for shipping
  

As you can see, there are many advantages of using a public warehouse, but consider the downfalls.

• Unless you work with a warehouse facility that is willing to accommodate your needs, you may be required to work within the parameters established by the public warehouse
• The warehouse may have limited resources to accommodate space requirements
• If the warehouse facility closes on short notice because of economic limitations, you will be forced to find alternative storage and distribution methods on short notice
  

Convenient for individuals and companies that need additional storage on a temporary or long-term base, there are pros and cons to both public and private warehouses. The ideal situation is based on your product needs and company requirements.


Source
Private vs. Public Warehousing
Seaboardwarehouse.comAllbusiness.com, WAREHOUSE & DISTRIBUTION - Markets Reveals Strength in an Economic Downturn
Vendorseek.com
Vendorguru.com

The Kaizen Revolution

The warehouse industry like many can benefit from the Kaizen revolution that has spread worldwide. It makes sense for managers to find methods to increase efficiency, productivity, and work environment as well as decrease inconsistencies and inefficiencies. The Kaizen method is the process of continuous improvement, which involves every level of worker in your company. Who better to assist with process improvement at the line level then an employee that works in the trenches? Ultimately, the goal is to gather groups of individuals within the organization to study a particular work process or task and determine how to eliminate waste and improve workflow.

Each research group can be of any size and will concentrate on one process at a time. Once the group has come to an agreement as to how to improve the process and standardization of the work process, write the process down, and train employees to follow these same procedures consistently. Begin with employee suggestions to repair anomalies, but do not stop at once or twice. Continue the process of group review, suggestions, and standardization. Eventually, this continuous process will become part of your company culture.

This process can be used for any industry at any time within any part of the organization. Start with one department at a time and learn from each exercise. Track the process and find ways to improve the review process each time.

Employee Retention Plan

Is it surprising that there is correlation between labor costs and retention? Unless motivated and happy with his or her job, approximately 83% of employees will look for alternative employment once the economy and job market improves. Unfortunately, many employers continue to practice under the premise of business as usual without considering that it can cost as much as one and a half times an employee’s annual salary to pay for unemployment, recruiting, training, and learning curve.

With the advancement of warehouse management systems, warehouse employees will become more technically sophisticated. As employees require additional training and technical ability, it will become much more difficult and costly to replace that employee.
By taking a few steps to increase moral and employee attitude, employers can maintain a consistent labor force effectively reducing resignations, increasing performance, reducing grievances, theft, and personal time off.

A good employee relations program can assist with these goals. The program may consist of an effective new hire integration program, which begins at the orientation, performance management, which starts with consistent management training, an employee-training program, organizational team building, and the potential of career advancement.

Along with the aforementioned, one of the most important things that a manager can do to improve employee retention is to make employees feel like they did an good job and that they are an asset to the company. Although you may not have the time or resources to implement every employee retention program available, start with making employees feel like an important member of your company. Speak with your human resources manager to help you put an employee retention program together.

Source
PWC.com, Companies Seek Edge Through Engaged Employees
Vendorseek.com

Part of a Team

According to the Bureau of Labor Statistics, by December 2008, the number of unemployed individuals soared up to 11.1 million. The circle of unemployment and decreased production is leading warehouse owners to run leaner and meaner than ever. A key element of running lean is controlling labor costs. These costs encompass elements like advertising, recruiting, administrative costs, training, and most notably turnover.

A major question that managers face is how to keep a consistent workforce, so that turnover is kept at a minimum. Empowering employees may be one of the most effective methods to making them feel as if they are an important aspect of the company. Involving your workers in process and policymaking gives them a sense of importance. Besides, who better to help with developing internal processes then those individuals that enveloped in the daily activities of the warehouse activities?

Positive reinforcement is just an important as promoting employee involvement in policy deployment. Although, it is important to promote disciplinary action if an employee breaks company policy, it is just an important to promote a policy of positive reinforcement. Even though employees are doing their jobs, they want to feel as though they are an asset to their employer. Uttering the phrase “good job” to someone that put forth the extra effort can make the difference between an employee doing a mediocre job or putting pride in his or her work in the future.

Begin by including these simple elements as part of your training program. Soon it will become a natural part of your organizations culture.

Bureau of Labor Statistics, Unemployment in December 2008
FOSTYK, MICHAEL. "Avoiding employee turnover." Warehousing Management. 2001. HighBeam Research. (January 22, 2009)

Private Warehousing?

A thought that may occur to a manager is why do I have to pay an outside vendor to do something that we can do internally? Although, it may sound nice to feel that you have control over where your inventory is stored, labor, and distribution, a good question to ask yourself is if you have the time and resources to manage a separate company within your corporation.

There are many things to consider before expanding your company to include a private warehousing facility. Situations to consider would include:
Where will the warehouse be located? Placement of your warehouse location is so important, because it will affect availability and quality of labor, cost of labor and distribution. Ineffective positioning will affect bottom line, because you will work harder instead of smarter to supply your business with necessary information, labor, raw goods, and transport routes. An imperative step will include research to determine available resources within the region.

Capital expenditure is another major consideration. Warehousing is a major concern for many businesses. Where would you store your merchandise while waiting for orders to come in and shipments to depart? Do you rent or own. If you rent a location, you may be expected to sign a lease, which is a long-term commitment. Whether your business is successful or not, you will be responsible for paying the rent on the building even if you do not use it. Okay, so the other alternative is to purchase a location. Now, you pay property taxes and are responsible for maintaining the facility.

Control is good, but perhaps the alterative of using a third party warehouse service may be a good option by letting someone else handle those issues.
There is no such thing as one size fits all in industry. The primary thing is to do your research before making any decision.

Source:
http://www.geocities.com
Vendorseek.com

Warehouse Kitting

Kitting offers companies that are not equipped with warehouse facilities or cannot afford the capital expenditure of setting up a warehousing facility. Your company can take advantage of the services that are necessary to forward a product to market quickly. Kitting involves the assembly of products in a boxes, shrink-wrap, blister, or clamshell packaging.

Some companies require assistance preparing their product for shipment and display. There is a better chance of selling your product if it is accurately packaged and prepared for market. There is nothing worse than excitedly opening a new item just to find that pieces are missing from the package.

Just an example of how this process may work: You have a several items that belong together in a package. In an assembly line, each individual in the line subsequently adds another component to the package in a specific order. This ensures that everything is included in the package. At the end of the assembly line, an individual conducts a quality review. Part of that review could include weighing the package. If the weight of the package is accurate, then all the parts have been included; no more no less. If the weight is incorrect even by a couple of ounces, then it means that either a component is missing or there is an additional part.

Kitting allows the warehouse to build an order for shipping then distribute or store it. Getting the distribution center to kit your products not only prepares the items for distribution, but may also save your company money, because you do not have the labor costs and capital expenditures to deal with.

Source:
scmexpertonline.com
Red Robot: Kitting

Why Get Certified?

We hear it all the time. Education is paramount to obtaining and keeping a good job these days. This includes the manufacturing and warehouse industry just as much as any other industry. It is so important to become a valued employee by so you can demonstrate that you are an efficient and productive member of the team. One method is by earning your certificate. There are several certificates that you can earn based on your career goal, but for now we will concentrate on certified supply chain professional (CSCP) certification.

The CSCP focuses on operations management professional development. Areas include increasing efficiency, streamlining operations, best practices, and terminology. Learning about and choosing enterprise resource planning (ERP) that best suits your business. Becoming a certified supply chain professional entails understanding about demand management, materials planning, capacity planning, operations, performance measurements, and vendor management.

You can use your education in supply chain management in the warehousing industry, because it entails many of the same business practices such as vendor negotiations, inventory management, customer service, employee management, and production. Ultimately, if you can show your employer that you run an efficient, productive, and profitable organization, you have a better chance of maintaining an excellent career in the warehousing industry.

SOA

We are living in a struggling economy where companies are searching for methods to save money, which includes cutbacks in labor, technology, and business processes. The warehouse industry is facing similar challenges and an enormous area of expenditure is their warehouse management system, which needs to be updated or replaced regularly.

As of the past few years, an important innovation has become quite popular; the service oriented architecture (SOA). The best of two worlds encompasses the service-oriented architecture of your warehouse management system. Warehouse clients want a better method for upgrading and customizing warehouse management systems that do not involve as much time or capital expenditure to implement and upgrade. A strong emerging trend is the SOA system, which allows for an easier integration of a hybrid unit by using both scanners and voice picking hardware and software. The SOA system allows greater flexibility in customization by modularizing components allowing you to select components necessary for the warehouse management system WMS function based on your warehouse flow and business process.

This system allows for upgrades and changes where and when needed along with current web-based applications that permit for real-time information. This web-based tracking system enables supervisors to have the capability of tracking the product and labor as well as easier information technology upgrades.

Source:
Time to automate: from labor savings to just-in-time inventory, automation is the wave of warehousing's future. Software Services & Applications (301) from AllBusiness.com
SOA and Transportation AllBusiness.com

Improving Real Time Data Collection

Another trend that is growing in popularity is improvement in warehouse management systems (WMS). The average shelf life of a WMS computer system is about two years before upgrades are necessary. Warehouse facilities spend thousands of dollars to maintain and upgrade their systems and what we are seeing is two important things.

First, companies want to customize their WMS system to meet their business processes and needs. A one-system fits all is not always the best bet for every company. A garment warehouse does not have the same needs as a refrigeration plant, so a WMS for one does not always fit the needs of the other.

A trend that we are seeing is the integration of radio frequency identification system and voice activated system. The combination of the two systems has the benefits of both worlds to improve efficiencies. For example, a voice recognition system utilizes hardware and a headset that the worker listens to for direction rather than reading direction. This leads to efficiency in picking and packing as well as fewer injuries because of greater awareness to surroundings.
An issue that may arise from the new system is user error. However, because of the integration of both a data scanning system as well as voice system, supervisor are better able to track merchandise and labor to correct issues by providing additional training.

Sources:
warehouse-solutions.com
Truck Transportation and Warehousing
Warehouse Management Systems - WMS
VendorSeek.com

Warehouse Trends

You may see many changes, because companies will want to find ways to save money as well as improve process owing to a struggling economy. Changing times means changing trends in the warehousing industry. Recent changes that have developed in the past year include several apparent trends that will affect the warehouse industry in the long term. We may see fewer warehouses, which may cause a higher demand on the warehouses that are currently in business. This means changes such as more frequent shipments verses fewer large shipments, little to no inventory because of improved WMS tracking and more efficient labor due to just in time shipping, which leads to picking and packing weekly which will replace the batch system.

Other services that may see a modification includes clients that will be looking for companies to handle more cross-docking action. Clients will be looking for customization of warehouse services that include on-demand packaging, compliance labeling, ticketing and tagging, palletization, and preparation of floor ready merchandizing. The faster the retailer gets the product to the sales room floor, the sooner the retailer makes their money.

Companies will want to concentrate on their core competencies, which may lead them to focus on third party warehouse facilities to handle the distribution aspect of the business. Finally, an important trend we will see is the enhanced automation of warehouse facilities leading to improved worker education in order to keep up with technological changes. Improved total operation leads to improved quality of the work force.

Source:
biznet
http://www.logisticsmgmt.com
logisticsmgmt.com
VendorGuru - Welcome!

Warehouse Employees and INS

All employers need good workers, regardless of where they're from. However, employers that do not take immigration and naturalization services (INS) seriously can encounter penalties that can include thousands of dollars in penalties, company closure, even incarceration of responsible individuals.

Although, the procedures are simple, unfortunately many companies do not follow simple protocol that could save their company from immigration issues and raids by INS authorities. Policies that should be enacted are basic such as properly completing the I-9 form at time of hire. Employees have three days to provide proper documentation from date of hire, otherwise appropriate measures up to and including termination of the new employee along with discipline of the employee that is responsible for completion of new hire paperwork.

Specific polices should be enacted like following best practice that includes written policies and procedures and proper storage and tracking of INS forms. A good practice is keeping the forms in separate files or binders. For example, keep forms that do not need to be reverified in one binder, terminated employees in another binder, and forms that need to be reverified in another. It is important to keep these documents separate in case of INS audits or if managers need to review files in order to avoid biasness.

Along with following proper procedures is the element of training. Managers and employees that are responsible for completing and maintenance of I-9 forms should be thoroughly trained, audited, and training should be freshened periodically. Do not get caught up in problems that could easily be avoided. Create and follow policies that will keep your company safe from legal issues.

Sources:
uscis.gov
New Hapmshire Business Review

Economies of Agglomeration

In relation to economies of scale is economies of agglomeration. How does a manager decide where to build or open a warehouse? There are many factors to take into consideration: economies of agglomeration, which is the analysis of urban spatial structures and location of households. Location of warehouses affects the bottom line of your balance sheet. Poor placement could mean added labor expenses, increased transport cost, and even increased assembly costs. Placement of warehouses in the right market is important to ensure a successful company.

Part of this theory relates to functional linkage, which is the link between industries that manufacture related products. This includes information, raw materials, finished goods, and transport links. By placing your warehouse in a market conducive to your industry, you can take advantage of external economies like labor and training. For example, industrial links and support can include exchange knowledge between firms, product exchange, or delivery through proximity.

Another factor to consider is the current economy and unemployment rates as well as labor search. A warehouse located in a city that has labor resources, but is located beyond reasonable travel proximity can adversely affect payroll expenses along with transport costs. A thorough analysis of the warehouse requirements along with the urban economics is important when considering a warehouse location. Make sure you know the advantages of that come with warehousing.

Sources:
answers.com
huduser.org
Journal of Urban Economics

Economy of Scale

Smaller companies are at a bit at a disadvantage when it comes to economies of scale. In a very basic nutshell, economies of scale is based on the assumption that the cost per unit remains the same regardless of output. The advantage comes when marginal costs are spread over a higher number of units produced. For example, marginal costs encompass fixed and veritable costs and problems may occur when the marginal costs increases because of price changes in those fixed or veritable costs. Smaller companies may not have the negations power because of lower volumes of productions, so when per unit costs increase, profits decrease.

Larger companies may be able to keep per unit costs lower because they may be able to organize production more effectively. In addition, output necessary to afford greater purchasing in volume, allows negotiation for decreased unit cost relating to raw goods, labor, and parts. This theory applies to transportation and fright costs because rates usually decrease as volume increases.

Established warehouses have the advantage of monopsony, which affects all areas of productivity and giving them the advantage of bargaining power due to volume of production such as purchasing in bulk, long-term contract, labor, lower interest rates, and specialization of managers. Ultimately, warehouses offer the ability to negotiate certain costs that smaller firms could not. If you're looking to open a warehouse or find a fulfillment service, consider these factors first.

Sources:
linfo.org