5 Indicators That Your Warehouse Needs Modernization

16 August 2022

Discover some situations that could harm your business and indicate the need to modernize the warehouse.

Managing a warehouse today does not simply mean planning a load or optimizing a picking route. Nowadays, it is crucial to have precise and immediate information, with quick access through all links in the chain, as well as ensuring the best use of resources and, of course, guaranteeing the best shopping experience for customers.

Those who manage a 100% manual operation may face great difficulties in achieving these goals. After all, how can you have a macro view, reliable data, and maximum efficiency using paper and spreadsheets? And how do you ensure that the employee makes the best decision based on his “feeling”? To eliminate these problems, many companies have already automated their warehouses with management systems. However, there is an important warning: it is necessary to have the right technology, as it may happen that the tool used is obsolete or not in line with the company’s growth potential.

In this sense, the main question to evaluate is not whether the company has technology or not, but whether it actually facilitates work and provides the support the company needs. To do this, it is important to analyze some specific points of the operation that can answer the question: “Does my warehouse need to be modernized?”

Modernizing the operation means having the right tools to increase capacity, improve efficiency, and obtain valuable data that allows for continuous improvement, both in internal warehouse processes and in the level of service offered to the customer. It also means having technologies that follow market trends, which constantly evolve and are scalable.

So how to start? The first step is to evaluate whether your technology offers advantages or is hindering your growth. To help you, we present five signs that reveal you need a more modern solution.

1 – Error rates have increased or are unacceptable

If your operation has reported many errors, such as incorrect items or quantities shipped, improperly packaged products, damaged goods, or incorrect documentation, it is a sign that your warehouse needs to be modernized. In fact, this is the ultimate warning sign because errors generate customer dissatisfaction and cause many damages to your business. Humans make mistakes, so when the operation is 100% manual, errors are practically inevitable. On the other hand, having systems that direct work and alert you in case of discrepancies will make a huge difference in the final result. An example is the WMS system.

A good WMS can handle the current complexity of operations, providing guidance to employees to perform each task, verifying its correct execution at every stage. And, if a mistake is made, the system issues a warning for a quick correction, meaning the software does not tolerate errors and provides full support so that the work is carried out with maximum precision.

2 – Missed deadlines and/or delays in separation

If there are many delays in shipments or the inability to keep up with daily orders, you need to rely on technological support to put an end to these events. Similarly, if during separation employees walk much more than necessary or handle the same object multiple times, it is a sign that the activity needs to be modernized. This is because delivery delays generate dissatisfaction and even the loss of a customer. Slowness in performing tasks and excessive handling result in higher costs for the company.

By modernizing the warehouse with robust management software and automation systems, you speed up picking and can offer increasingly shorter delivery times. Moreover, you will make better use of your workforce. With the help of technology, you can do more with less.

3 – Increasing costs

Many companies do not really know how much it costs them to fulfill each order. The total cost includes labor, facilities, inventory maintenance costs, system costs, equipment, shipping, chargebacks, and returns. As your company grows, the cost of service per unit should decrease, not increase. However, in many cases, in the battle for delivery agility, companies end up using labor and warehouse space inefficiently, which can significantly affect the company’s profitability.

To reduce costs, it is necessary to increase efficiency. And this can only be achieved with technology. It is, therefore, an investment that helps cut unnecessary expenses and make the business more profitable.

4 – Lack of space

If your warehouse is almost “overflowing,” with almost no maneuvering space, you may have problems in several internal processes. Many managers, faced with this situation, think the solution is to increase the storage area. Therefore, they expand warehouses or rent other spaces to store products. But all this can be avoided with the use of the right technologies, which will allow intelligent use of space, without the risk of stockout. In other words, by modernizing your warehouse, you can grow your business without necessarily increasing the storage area.

5- Your customers do not have order visibility

In your company, do customers make a purchase, receive a delivery forecast, and the communication ends there, meaning they are left to imagine the order’s trajectory without being able to track it? If so, there is a clear sign that your systems are not working in favor of your company. Technologies are needed that fully track the order, from the moment it arrives in the warehouse, through shipping, to the final delivery to the customer.

While your company does not offer visibility, competitors notify their customers of every change in order status, ensuring maximum transparency, reliability, and commitment. Therefore, you must hurry to bring the same to your company and win the trust and loyalty of your buyers.

Modernizing the warehouse: end of errors, delays, and rework

In addition to the mentioned problems, we can also add difficulties such as congested receiving docks, disorganization of CDs, high turnover, or unequal workloads, among other situations that unnecessarily take your time in searching for a solution and prevent your business from growing. To put an end to them, there is only one way: modernize the warehouse, with the support of advanced technologies that apply speed and precision to your processes, as well as offering valuable information that helps you make decisions.