There used to be a time when business leaders and C-suite types didn’t truly recognize the value in a well run distribution center. Part of the reason for that was the lack of understanding around what distribution centers actually do and how they contribute to the overall bottom line of a company. Fast-forward to now and the benefits of a well run distribution center are far reaching and can really impact the bottom line in a positive way. From automated processes to establishing clear methods of doing business with customers, here are three distribution center best practices that improve efficiency and saves money.
Automation
It has already been proven that automated storage and order picking systems deliver substantial operating savings for distribution centers. Automation can also improve the efficiency and quality of order fulfillment. Other benefits include extended facility life, improved space efficiency, and reduced dependency on labor availability.
Introducing automated systems into a distribution center has hard benefits such as labor and building cost savings, but there are secondary benefits as well. Distribution centers would experience safer, more comfortable environments that offer improved delivery flexibility and response times. Additionally, studies have shown distribution centers improve staff retention rates and improve customer satisfaction.
Implement a Vendor Compliance Program
Getting serious about developing a long-standing strategic relationship between a company, its vendors, and third-party providers requires well thought out vendor compliance programs. These vendor compliance programs cover a range of things that include tracking processes all the way to the source, setting clear and specific labeling requirements and standards, and even maintaining minimum order quantities and standards.
Vendor compliance programs are meant to guarantee and encourage a particular level of quality and service when dealing with vendors and other businesses. It’s also a great way to set expectations for how business will be done with your organization. The benefits include, but are not limited to, increased customer satisfaction, streamlined warehouse operations and more efficient processes, in addition to reducing errors in handling of products.
Advanced Shipping Notification
Surprisingly, many distribution centers still have not implemented an advanced shipping notification system. Distribution centers that are not requiring Advanced Shipping Notification (ASN) even still rely on regular shipping and receiving schedules. However, the inefficiencies of doing business in such a manner are well documented. Without ASNs, receiving at the distribution center suffers from a variety of inefficiencies. These include a complete and total lack of visibility into what shipments are going to arrive and when. Planning the labor schedule is negatively impacted because of that uncertainty, and is unable to implement cross-docking techniques.
Leveraging ASNs allows distribution centers to better manage inventory, purchase orders, and labor management. Being able to plan labor schedules with a higher degree of certainty helps manage labor costs and keep them lower than you would otherwise be able to without an ASN system in place. ASNs also allow for more accurate order fulfillment and result in higher customer satisfaction scores.
Distribution Center Best Practices
Many of the best practices involved in getting the most out of a distribution center, while improving efficiency and saving money involves something as simple as eliminating unnecessary steps. The three best practices outlined above help any distribution center do just that. It’s no secret that every industry and every company has its own specific supply chain needs, but working with dedicated supply chain and distribution center professionals for your specific industry and business needs is a necessary step. Contact the dedicated experts at NSA today, and we’ll work with you to ensure your distribution center goals are met.