How data help warehouses benefit from continuous improvement?
Every business strives to grow, take advantage of new opportunities, and achieve continuous and sustainable operational and financial success.
However, one particular strategy in warehousing, referred to as a “continuous improvement approach,” has been proven to work effectively in accelerating the development of the companies and being the prerequisite for competitive advantage.
According to KaiNexus, companies like SixSigma, Kaizen, Lean, and Toyota have that particular approach in common, which brings numerous benefits of continuous improvement.
What is more, as the name implies, this strategy motivates the warehousing companies to undertake constant innovation to upgrade their services, products, assets, and processes. And as this is not an easy task, many organizations face the challenge of making the wrong decisions and taking poorly-evaluated risks.
Fortunately, the process of data integration has become a powerful tool, which to give the companies a hand on this matter. You will find out how in the following sections.
Principles of constant improvement
The continuous improvement approach is based on 3 general principles:
Make small improvements
Making small strategic and operational changes helps the warehousing companies to take small measured risks and make well-planned steps. Data integration enables the business entities to have a complete overview of their operations and identify any kinds of changes that should be made in a particular period of time, as well as to measure the risk level of those.
What is more, it enables data-based decision-making for well-thought and transparent planning. This process helps organizations to recognize the tasks which costs the least but would have the highest ROI. In fact, according to the same study of KaiNexus, 1,4% of the improvement ideas have over 100k$ positive impact on the organizations.
Receiving feedback for implemented recent business changes is a great opportunity that should not be neglected. It allows us to effectively measure our performance against set benchmarks and criteria.
Data analytics is the right tool that evidences the results of the incremental changes in terms of financial, operational, and customer metrics. And when the analytics are available to all organizational working units, the visibility and transparency of those assets are improved, and the collaboration between the departments and working teams is enhanced.
Trust the employees
Letting the employees to be in charge of the idea brainstorming process, as well as assessing and planning the implementation of those ideas, make them far more engaged with the business entity, than if they were led by a manager. And when they have all the warehousing data available, they are enabled to base their decisions on facts and achieve a high-quality planning process, which to drive real value to the organization.
Besides, when the employees are engaged with the continuous improvement approach, they are more motivated to act and achieve the set goals and objectives.
Data-related benefits of the continuous improvement approach
The productivity for warehouses is often measured in “completed perfect orders.” And any company strives to enhance its level of productivity to drive customer success and profitability. But how do data help?
By giving a complete operations overview, it provides the businesses with insights on how to optimize the working processes in order to save time and complete more orders. This way, the business entities can make evidence-based decisions on how to reallocate machine capital, how to position human capital, and how to make those two assets work in perfect alignment.
By identifying gaps in the order preparation strategy, warehousing companies can effectively forego any duplication of functions and start working at the ideal level of production capacity without accelerating the depreciation of machinery, nor compromising employee happiness.
As a result, the warehouses manage to improve delivery times, enhance the perfect order ratio, and diminish the internal order cycle.
Improved productivity has a direct relation to cost reductions because, in the warehousing industry, saved time equals saved money. For example, according to the ROI of continuous improvement study, 1 in every 10 improvements saves, on average, $31,043 in its first year of implementation. And 1 in every 4 improvements saves on average 270 hours in the same time frame.
Besides, data integration is able to give the company insights about employee productivity, satisfaction, and trammels. This way, the organization is enabled to improve the employees’ job fulfillment level, target them with appropriate intrinsic and extrinsic motivators, and as a result, lower the employee turnover rate to optimize the human resources costs.
In the long run, a continuous improvement approach provides great organizational benefits in terms of competitive advantage.
Using cutting edge machinery, RFID, AI, predictive and advanced analytics, adopting new consolidation frameworks and IoT networks are only a few of the goals that can be achieved through incremental changes and small short-term improvement.
After all, the benefits of adopting a continuous improvement approach in your warehouse business are worth to be looked into. Engaged employees, lower turnover rate, better services, and proactive learning culture are only the secondary advantages of the implementation of this model. And together with the enhanced productivity, lowered costs, and improved competitiveness, they drive corporate success and valuable organizational opportunities.