Cadre Whitepapers

Winning New Customers: The Case for Gaining Competitive Advantage Through Operational Efficiency

By Ron Hounsell
Director of Logistics Services
Cadre Technologies, Inc.

Believe It or Not, Competitive Advantages Still Exist!

The biggest source of competitive advantage in the current market, even with warehousing costs at a four year low is, believe it or not, lower costs.

The quickest path to lower costs is, believe it or not, more productive workers.

And there are significant improvements to be made, believe it or not, right in your own warehouse.

Executive Summary

For companies who go after them, operational savings can mean a difference of as much as one-third of the cost of sales. These opportunities take the form of greatly improved operations supported by better technology (decision-making and execution systems); creative utilization of labor resources; and better access to information for everyone in the business, especially the individual warehouse worker.

The range of expectations and requirements of customers is expanding at an accelerated pace. To support these requirements, warehouse facilities need to be more service-centric and flexible. The traditional reaction to new and changing customer demands has been to "throw people at the problem." Today, the answer is to organize flexible facilities with software and communications devices that enable fewer people to do many more, diverse tasks using better information. The other part of the equation is to improve the management of the newly enabled work force to provide a payoff for their increased effectiveness.

And, believe it or not, this will set you up to sell more business.

This document covers three main areas which contribute to higher efficiency and lower costs:

Integrated, flexible software systems that organize and prioritize work. This includes taking more orders from multiple sources, managing diverse inventories, executing tasks for optimal throughput, and measuring the results. The system needs to support very different needs of management, supervisors, and customers, dynamically. This diverse functionality may include order handling via the web, call-center and EDI; real-time communications via bar-code scanning, speech recognition and RFID; system directed tasks such as putaway, picking, replenishment, and cycle-counting; automated shipping methods; and system tracking for accurately billing for services. Systems that accommodate these requirements always vary widely by customer. What many logistics companies are seeking is enhanced application functionality, but not full ERP complexity or cost.
Dispatching warehouse workers to perform a myriad of tasks with better information in order to enable them to be in the right place at the right time and know what to do. This includes better information flow between the centralized WMS and order entry system to the mobile warehouse workers with advanced mobile computers equipped with multiple modes of communication (speech, bar-code scans and browser-based information).
Labor management – the ability to forecast and plan for labor needs as well as the means by which to manage that activity in real time and to provide meaningful and timely reports on execution, quality and costs. By combining incentives with skilled use of labor tools and real time information, labor resource costs can be a major contributor to competitive advantage.

A clear vision of the end result, the right solution, the right partners and a strong focus on implementing the right changes in the right way are the keys to putting these double digit savings gains in place.

And then there's the big payoff: demonstrating these competitive advantages to current and future customers to sell more business.

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