This guest post comes from Gracia Smith, a warehousing and distribution expert.
The wholesale supply industry has changed dramatically over the last couple of decades due to advances in technology and profound structural changes in the way companies do business with one another. Because of these changes, there are ongoing myths about the industry that tend to confuse people about the actual functions of a wholesale supplier. What does it actually take to manage a distribution center? In this article, we’ll address two major myths in the industry to help clear up some of the confusion.
Myth #1: Warehouses and distribution centers are pretty much the same thing.
One industry myth that continues to be recycled is that warehouses and distribution centers are basically interchangeable as terms. This is understandable since distribution centers are so commonly referred to as warehouses in common speak, due to their infrastructure. However. today’s distribution center is a very different entity from the traditional warehouse.
This myth relates to distribution center management, alleging that in order to effectively manage, you have to be aware of the nature of the business you are in. You also have to understand what your customers expect of you, and ultimately what the market demands of you, in order for your operation to be profitable and successful.
The reality of today’s wholesale supply industry is that competitive businesses have moved away from the static “warehouse” model, where businesses were storing goods until they were needed, and that was all they did. Today wholesale supply has moved towards the “distribution center” model in which goods move very rapidly through supply hubs, and distribution centers themselves offer a broader array of transportation and order-fulfillment services while playing a greater part in customer service and business relationships.
Successful distribution center managers are people who have gotten very good at speed and efficiency while diversifying their skillsets to account for customer service, value-added services, sales, communication, and other crucial areas. Distribution centers are dynamic places that are always moving product, and always reconfiguring themselves to meet the demands of the market and increase efficiency.
Myth #2: With today’s technology, all I have to do is automate and my distribution center will be fine.
According to Automation.com, over 80% of large distribution centers in North America and Europe were expanding their automation spending from 2013-2015. There are some amazing technologies that distribution centers are utilizing to increase speed and efficiency, and lower costs. Common examples include picking towers, stretch wrap systems, robotic palletizers, dynamic slotting modules, and conveyor systems, all of which greatly streamline the movement of goods.
However, this creates the illusion that all you have to do in order to compete globally is to invest in a highly sophisticated warehouse operation. Unfortunately, you are competing with distribution centers all over the world who are using these technologies, and they are utilizing their increasing experience in the field to improve their processes as well.
Automation can be very effective, but the truly successful distribution center managers have to spend a lot of time and effort building their relationships with manufacturers and customers. Another important element is the actual organization of the distribution center, which takes careful planning.
Of course, all of this can be aided with a warehouse management system (WMS) which can help you better establish relationships with manufacturers utilizing advanced notification systems and vendor compliance programs. A WMS can also collect data in real time and help you better organize your warehouse. However, efficient utilization of these technologies requires a lot of trial and error and data crunching. A distribution manager can’t expect to buy the best automation technologies and then sit back and wait for everything to take care of itself.
As you can see, there is much more to managing a distribution center than simply storing goods and utilizing advanced technologies to get those goods to customers. Managers have to be proficient in business relationships and communication skills, and they have to know how to execute efficient logistical operations with the help of advanced technologies, among other crucial skills. Distribution centers are dynamic businesses that are always changing and it takes experienced professionals to stay on top of them. As long as prospective managers understand these challenges, they’re sure to be more successful than a large portion of the competition.
Author Bio: Gracia Smith is an experienced wholesale professional who has taken up freelance writing to share her knowledge and experience in the field with here readers. Gracial is fascinated with logistics, and she loves to see how much can be squeezed out of a given second.