The staggering nature of waste in many manufacturing organizations becomes clear when companies understand the real costs of inefficiency. For instance, it's worth asking if most organizations realize that the average distribution center wastes roughly 3,000 labor hours because of counterproductive processes, a figure highlighted in RFgen Software's white paper titled "Tomorrow's Warehouse Today: Three Technologies for Exceptional Efficiency."
What are some of the biggest culprits that reduce productivity? Probably the single most damaging process that manufacturing organizations can cling to is using paper-based systems to manage production, distribution and inventory. Manually inputting data increases the likelihood that errors will enter the manufacturing environment, a circumstance that will negatively impact the company's bottom line. Expanded out on a global scale, warehouse management is even more critical for companies looking to stay competitive. The supply chain becomes more complex, and this drives the need for even tighter controls over inventory, production and distribution.
How Can Manufacturers Tell If Warehousing Problems Exist?
According to the RFgen Software white paper, there are numerous symptoms of inefficiency that can severely limit the growth of manufacturing organizations. Here are just a few:
- Shipment errors that stem from problems in orders and result in a high volume of returns
- Falling satisfaction rates among business customers and clients
- Escalating payroll costs due to high rates of worker overtime
- Lack of controls over inventory, resulting in over and under stocking merchandise
If any of these issues appear familiar to a manufacturing organization, it's a sign that necessary steps must be taken to optimize workflows to reduce inefficiency and lower costs. Especially when a company chooses to expand operations on a global scale, the need for streamlined inventory management, picking and stocking grows even greater.
The Risks of Going Global
In many cases, manufacturers are motivated to move into international markets. Whether local competition has limited the number of available customers or foreign consumers have demonstrated interest in a particular product, establishing points of operation overseas can yield positive financial outcomes. However, companies have to weight the risks. Supply Chain Digital highlighted several issues that companies can face when they develop warehouses or distribution centers abroad.
- Uncertain regulatory climate: Even within the U.S., new rules and compliance protocols can have a serious impact local supply chains. Food sourcing and labeling is just one example of regulations that can alter processes. However, it can be more difficult to respond to shifting legislation in foreign markets where governments operate differently. It may be hard to tell when the company must impose changes and what the repercuss