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07 Apr 2023
Top 7 Challenges in Warehouse Management

An active cog in the functioning of a supply chain, a warehouse manages an uninterrupted flow of functions, from the collection of raw materials to production to the delivery of the final product. Without a fully operational store system, a company might face an uphill task with pipeline delays in staying true to the manufacturing timeline and ensuring adherence to TAT for every process involved in the supply chain. So, while a fully functioning depot facility directly influences an end-to-end logistics workflow, warehouse management challenges can hinder a company's optimized workflow. This write-up highlights the crucial bottlenecks that can hamper an inventory daily procedure.

Table of Contents

Challenges of Warehouse Management:
Inaccurate Inventory Data
Space Constraints
Stock Management
Unaccountable Labor Management
Lack of Transparency & Connectivity
Improper Time Management
Managing Damaged Products

What Are the Challenges in Warehouse Management?

1. Inaccurate Inventory Data

Untimely updates on inventory data can lead to poor workflow in a warehouse. For personnel working at the logistics center, the key operational requirement at the beginning of the picking process is to know the correct storing location of the product. Considering this step requires a lot of physical attention, with the workforce requiring time to track & trace the goods – the slightest error can cost a company crucial working hours translating into the loss of valuable capital. This occurrence generally happens due to inaccurate manual record keeping & lack of transparency amongst stakeholders.

2. Space Constraints

One of the most practical issues for any storeroom is space constraints or lack of space utilization, which can lead to scalability issues for an enterprise if & when customer demands arise. A poorly structured warehouse can result in unwarranted work accidents, a longer time for product location, and in some cases, damage to the stored inventory. Such bottlenecks can be solved with proper planning giving key focus to space optimization, eventually translating into efficient operations.

3. Stock Management

A warehouse principle focus is to house stock, though if not done correctly, it might result in lost revenue opportunity for the company. An organization cannot afford a shortage or excess supply in its storage, and both extremes point toward improper utilization of funds and lead to a bad balance sheet at the end of each quarter. Many companies now actively employ analytical processes to gauge seasonal customer demands for the foreseeable time, enabling them to be ready with proper stock at opportune sales prospect.

4. Unaccountable Labor Management

The fulcrum of daily operation at a warehouse, labor accountability lays out the blueprint for a company meeting its weekly, monthly, or quarterly targets. How well your labor is versed in business-as-usual activities defines the overall productivity metric of your enterprise. If left unchecked, improper utilization of workforce expenses can leave a big hole in the organization’s financial chart. An organization must have a proper reporting structure with in-line managers keeping a tab on the proceedings undertaken at a storage house. With the transparency of approach & workforce in place, a company will have a better rate of the order fulfillment process.

5. Lack of Transparency & Connectivity

Every process in the supply chain needs to be transparent with its stakeholders aligned, and warehouse operation is no stranger to this modus operandi as well. A storehouse needs the latest technological development to fast forward its daily targets quickly. Lack of such upgradation in infrastructure can result in poor work output and debilitated data cohesion, factors which prove to be a bane for an end-to-end supply chain. Having automation at the helm also minimizes manual effort while collaborating with other partners. With astute transparency & better networking, management can observe noteworthy improvements in key performance metrics.

6. Improper Time Management

Time is the most significant marker to judge the efficacy of any operable framework, and improper time management makes up one of the most major warehouse issues. For instance, an unoptimized inventory-picking process directly impacts the entire order life cycle, subsequently cascading the delivery schedule. Duration assigned to every stage in the supply chain must be followed to ensure near-perfect efficiency, output & complete optimization of resources and capital.

7. Managing Damaged Products

Reverse order flow for any organization is a cost-generating statement as it requires additional setup to carry forward transaction status (canceled or reordered). Considering such a framework is in place, any disturbance in reverse logistics, be it lack of additional labor or shipment wagon, directly impacts storehouse functioning, which is duly counted under the challenges of warehouse management.

In addition to the above-mentioned catch, a company sometimes faces head-on scenarios directly disrupting the regular business operation. Warehouse issues like poor quality control, inapt order management process, siloed data storage, unwanted excess procedures, and unsafe work environment can all result in unrewarding scenarios for a supply chain. Organizations employ Warehouse Management System (WMS) to nullify any potential aberrations in their supply chain's logistics leg to maintain fluency in daily storehouse functioning while focusing on revenue-generating metrics. If you want to keep your productivity high while keeping a tab on the investment, 3SC's WMS solutions will be the perfect aid for your organization. To know more, contact us now.

13 Apr 2023
Top 7 Factors Affecting Demand Forecasting

The simple practicality of supply & demand measures a business's performance. The greater the demand, the greater the resources, capital & inventory are required. And, if the orders are delivered on time, along with an impressive revenue statement, an organization gets better customer experience metrics, leading to a stronger market hold. Industries, irrespective of scale, ensure their supply chain is better optimized by employing a demand forecasting process. By definition, demand forecasting is a predictive matrix that works on a company’s historical data to analyze the foreseeable requirement of a particular product in a marketplace. While it is as accurate as the processes come, it is essentially driven by the factors which drive the calculation behind the scenes.

Table of Contents
Factors Influencing Demand Forecasting
Customer Seasonal Demand
Market Competition
Pricing of the Product
Types of Goods
Geographical Preference
Technological Advancement
Inaccurate Data Trend

What Are the Factors Affecting Demand Forecasting?
So, for an enterprise to gather the analytics that eventually helps its operations, it has to bear in mind the validated factors involved in forecasting decisions. Here, we list the potential factors affecting demand forecasting which directly influence an organization's production plans.

1. Customer Seasonal Demand

Often, we have seen a considerable increase in demand during festival seasons. Customer inquiries for a product usually rise multiple-fold during a specific time of the year. Such cyclic boom in an industry is quite common & businesses usually prep themselves by filling up their inventory to the max. While this approach might be a hit & miss based on the sales recorded, a comprehensive framework will involve determinants of seasonality to make forecasting decisions that will directly impact supply chain processes from raw material procurement to production to scale of the deliveries. An organization factoring in user requirements opens itself to multiple marketing opportunities, eventually leading it to hold good ground in sales figures.

2. Market Competition

The industry is filled with many players, and the same competition pushes an establishment to be proactive & retain the majority of the market percentage when the opportunity arises. Demand also gets affected by how many enterprises react to the customer's request. This inadvertently leads to a minute operational space, especially for new entrants who are at the initiation of their business. In such cases, forecasting gets heavily affected as it's wrought with risk and runs more on hope than data.

3. Pricing of the Product

Pricing done well for an item can be one of its major attractions to its potential user base, and in simpler terms, it is one of the best marketing strategies to catalyze an appeal for manufactured goods. Demand forecasting for new products gets its initial momentum in how a company strategizes its cost. Much of it also concerns the region's economics, whose target group mean earning is generally the principal deciding factor. Such factors governing demand forecasting can make or break the future of a new launch, as its acceptance is driven by how exactly its price appeals to first-time users.

4. Types of Goods

Every commodity under-planning stage requires an entirely independent demand estimation framework. Different products, be they perishable or solid goods, have various estimating measures from short-term to long-term. The nature of the commodity subsequently creates the consumption pattern amongst the users, which has a cascading effect on what eventually will be the company's production guidelines.

5. Geographical Preference

Every geographical area acts as a unique calling card for any venture to bring itself up to speed with the popularity of its product & acquisitions of new end users. A supply chain functioning too gets immensely benefitted if the promise of a prospective business in an area further lays out the storage location, shipping cost & potential delivery time. With such an outline done beforehand, forecasting methods can predict the perfect requisites for an enterprise to manufacture the goods which is a hit amongst the masses. A zonal study including headcount & mean income collaborates as an essential factor of demand forecasting.

6. Technological Advancement

Every decade or so, we have seen the influence of technology on how business-as-usual activities are conducted. Such advancement overhauls the modus operandi of any operation and beckons time from a stakeholder's perspective. Technological innovations, when tested & applied on a mass scale, can render the current operations stack less valid. In such crunch scenarios, demand forecasting for a product becomes extremely challenging & a shot in the dark for a business.

7. Inaccurate Data Trend

Estimating demand for an object, whether quarterly, half-yearly, or annually, requires an organization to work on correct operational data. A siloed database repository will factually lay out incorrect indications about the product's reception during its run time. Thus, it becomes imperative for management to make sure that the lack of relevant statistics doesn't hamper the astuteness of demand forecasting software.

For a production house to be scalable, efficient, robust, and capable enough to make the most of presented opportunities, it needs a demand estimating tool which aids the management in making better-informed decisions which leads it to revenue-generating business. 3SC's agile demand forecasting process provides the required analytical insight, which helps you sideline imprecision & chart out a course that gives you the edge over the competitors.

18 Apr 2023
Top 10 Advantages of Demand Forecasting

Demand forecasting is the first step of supply chain planning. It is the process of understanding the future demand patterns for a product or service. This involves studying historical sales data and market trends to estimate the potential sales of the products and services in the future. This process is important for organizations as it helps them plan their production schedules and inventory levels and optimize logistics. By accurately predicting the trends, businesses can ensure that they have enough products to meet customer needs while avoiding overstocking, which can be costly.

Table of Contents
Benefits of Demand Forecasting
Optimal inventory management
Better production planning
Improved resource allocation
Enhanced sustainability
Improved sales and revenue
Better pricing strategies
Increased supply chain efficiency
Risk management
Competitive advantage
Improved customer satisfaction

What Are the Advantages of Demand Forecasting?
Demand forecasting can enable companies to make well-informed, data-driven decisions and help reduce costs to improve their overall performance. Here are some major benefits of demand forecasting.

1. Optimal Inventory Management

Inventory management is critical for any business that wants to maximize its profits and minimize its waste. The accuracy of demand forecasting helps in successful stock optimization as it helps accurately determine the amount of materials required to fulfill the customers’ expectations. This lowers the risk of lost sales due to stockouts or wastage of resources due to excess stock. Planners can use different forecasting methods, such as survey, barometric, statistical, and trend projection methods, to forecast consumer orders. These methods can help identify patterns in buying behaviors, which can then be used to generate more accurate analysis and achieve optimal inventory management.

2. Better Production Planning

Businesses with accurate data analysis can make informed decisions about production schedules by analyzing past sales data, upcoming trends in the market, and other relevant factors. By forecasting the demand accurately, organizations can schedule production cycles and allocate resources accordingly, reducing the risk of stockouts or excess manufacturing. This ensures that the business can meet the orders promptly and efficiently.

3. Improved Resource Allocation

Demand forecasting can help planners allocate resources more effectively, including personnel, equipment, and raw materials. This way, businesses can ensure they have the necessary resources to meet orders without overspending. This not only helps in increasing efficiency but also prevents the wastage of resources.

4. Enhanced Sustainability

One of the prominent benefits of demand forecasting is enhanced economic as well as environmental sustainability. As the planners have accurate predictions for future orders, it will help them keep their stocks and inventory at the optimum level, further leading to effective utilization of resources while preventing any wastage of material or resources. This results in the better economic and environmental sustainability of the business’s operation.

5. Improved Sales and Revenue

Forecasting demand can have a big impact on sales and revenue. Businesses may make educated decisions on production, inventory management, pricing, and marketing tactics by accurately anticipating how much customers want their products or services. This, in turn, can result in increased revenue. Executives can schedule production accordingly, ensuring that they have enough inventory to fulfill client expectations if they know which products will likely be in high demand. They can find new market opportunities by analyzing data and establishing more effective sales and marketing strategies. This might assist firms in increasing their consumer base and revenue.

6. Better Pricing Strategies

Demand forecasting is important in pricing strategy since it gives critical information about consumer buying behavior, market trends, and sales potential. Companies can use analytics tools to adjust their pricing strategy in order to maximize earnings while limiting risks. By examining historical data and market trends, it helps them determine the best pricing points to enhance revenue and profitability. If a product's orders are higher at particular times of the year, businesses may adjust their price strategy to capitalize on the increased demand.

7. Increased Supply Chain Efficiency

Accurate demand prediction helps planners plan every operation of the supply chains while focusing on the possible customer orders. This way can help the planners optimize their operations, such as inventory management, production planning, and raw material procurement, make more efficient while maintaining the lower cost.

8. Risk Management

Demand forecasting is an important risk management strategy because it enables firms to predict and plan for variations in consumer requests. Effective allows businesses to modify production levels, manage inventory, and allocate resources to meet future demand. It considers different factors, including economic indicators, market trends, customer behavior, and seasonality, allowing planners to foresee possible disruptions in the entire supply chain network and change their plans accordingly.

9. Competitive Advantage

Accurate prediction of demand enables businesses to ensure that they have enough stocks to fulfill those orders and never have to face stockouts. This helps them in enhancing the level of customer satisfaction. This creates trust and gives them added leverage over their competitors, allowing them to outperform their competition.

10. Improved Customer Satisfaction

When businesses can give their customers the best quality products in the right quantity at the right time and place, it can help increase buyer loyalty and retention and attract new consumers through positive word-of-mouth recommendations.

In summary, demand forecasting can provide businesses with a competitive advantage by improving supply chain management, enhancing the customer experience, increasing efficiency, and informing strategic decision-making. By anticipating changes in market trends, organizations can position themselves for success in an increasingly competitive marketplace. With 3SC’s demand forecasting solutions, you can accurately anticipate consumer behavior and ready your supply chain to meet consumer orders and ensure better consumer satisfaction.

21 Apr 2023
Advantages of Leveraging Third-Party Logistics for Your Business

Every company focuses immensely on maintaining a good customer retention rate. After all, an acceptance of an organization’s products & services across the masses sets the tone for how the enterprise gets its market share. One of the crucial aspects of maintaining a good repertoire amongst the user base is ensuring timely deliveries of goods under the defined timeline. And that requires a proper sync in supply chain activities, from inventory management to storage to picking & shipping of the products.

While keeping parity across supply chain stakeholders & their operations can be challenging, organizations, in order to manage the scale of their logistics, employ 3PL services. Third-party logistics, by definition, are external distribution centers that cover the entire order processing from picking to shipping and receiving. A comprehensive third party service generally covers end-to-end requirements for a company by duly keeping a tab on the defined parameters of cost & time.

Table of Contents
Advantages of Third-party Logistics
Saves on operational cost
Planning & Execution Through Experts
Better overview of SCM
Better Positioned for Growth & Expansion
Proactive Risk Management
Optimized Network
Higher Customer Satisfaction Metric

What Are the Key Advantages of Third-party Logistics?
Outsourcing supply chain distribution to a third party service allows an enterprise to be scalable, efficient, cost-effective & hassle-free from all the nuances of planning & executing a warehousing action plan. In this write-up, we cover all the beneficial virtues when signing up for a new 3PL partnership.

1. Saves on Operational Cost

Managing an in-house distribution network requires standalone management of its own and sets prerequisites for initial capital investment, which can be too big an ask for an organizational setup, especially for SME industries. In such cases, partnering with a 3PL vendor proves immensely beneficial as their crucial responsibility includes funneling down costs without impacting the work's merit. The critical attribute of partnering with a third party logistics contributes to saving big on transportation costs as an external partner generally has many carriers in the network, allowing more room for negotiation while keeping the industrial shipping standard intact.

2. Planning & Execution Through Experts

When onboarding a 3PL carrier, an organization revels in the fact that it has employed warehousing experts to carry out its business-as-usual activities. From aligning various stakeholders from transportation to documentation to ensuring every transaction is accountable with the required compliance structure to applying the best-standardized practices – specialist can leverage their years of experience to chart out the best way to optimize the present resources towards profitability. Not to mention, such virtuosity is particularly important when scalability prospects are in sight.

3. Better overview of SCM

With experts leading the charge in the day-to-day warehousing tasks, the management of an organization can lead its principal attention towards other processes which require much more core competencies from the perspective of the entire supply chain management. With internal resources free from warehousing accountability, a company can better focus on other equally important aspects of the business.

4. Better Positioned for Growth & Expansion

When one of your key areas of the supply chain (read: logistics) is taken care of, the company can repurpose its effort towards scaling its growth for betterment. With quick response to seasonal demands & user-placed orders, an organization can set order fulfillment targets for its 3PL partners who can navigate the challenges and the resources required to achieve their shipping goals. Offering flexibility during the sudden surge of demands, an outsourced vendor dutifully manages logistical nuances ranging from the workforce to transportation. The added advantage is that even if an enterprise sees a dip in the order influx, it doesn't have to fret over the infrastructure as it's entirely handled by the third party partner.

5. Proactive Risk Management

Since third-party logistics overviews every warehousing action undertaken, they are equally prepared to nullify any potential disruption which might get caused during stages of product shipping. With years of experience handling bottlenecks, 3PL personnel ensures no productivity loss occurs by keeping every stakeholder of the process informed of the contingency plan. Such a quick response to an impromptu situation sets the hallmark for a marquee external warehouse handler.

6. Optimized Network

An external logistics vendor prioritizes the maximum output of the supply chain with minimum capital investment. And, with their diverse network across demography covering shipping companies, workforce, fleet contractors, etc., a 3PL operator directly impacts the cost of business operation with its inter-connected matrix of verified & reliable supply chain consultants.

7. Higher Customer Satisfaction Metric

The crux of any business is to maintain a high customer retention rate & keep up with the user satisfaction metric. For all the efforts put in by the management of an organization, the ultimate barometer for success is how receptive the audience is to the enterprise's services. Collaborating with a 3PL partner ensures timely deliveries of the ordered products, leading to better customer response and organic reach toward new user acquisition.

With such a multi-functional approach, partnering with a third party operator can prove to be a profiteering move from a business perspective. Offering comprehensive services from warehousing to shipping with complete regulatory compliance & timely adherence to delivery targets – an external collaborator holds the potential to drive an organization's revenue to the north. 3SC, with its 3PL services, tick-off all your end-to-end logistical needs with aplomb while ensuring that all the key performing metrics are aligned amongst stakeholders for better optimization & efficiency of operation. To know how 3SC's third-party logistics services can benefit your supply chain processes, contact us now.

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