Transitioning from traditional SCM to modern supply networks emphasises collaboration among interconnected entities, each with its own priorities. This shift necessitates managing conflicting objectives and information asymmetries, prioritising trade-offs enhancing collective performance.
Designing effective Warehouse Execution Systems (WES) requires adopting a high-level perspective to balance global and local optimisation. Elevating the viewpoint from ground-level processes to a strategic and holistic view can prevent the pitfalls of local optima and enhance overall efficiency. Global optimisation treats the warehouse as a unified entity, focusing on overall efficiency by aligning all processes and resources.
In contrast, local optimisation targets specific process-level KPIs, which can sometimes undermine overall performance. For instance, imagine a factory where every department excels in its individual KPIs—production meets daily targets, maintenance reports minimal downtime, and inventory is balanced—yet the factory struggles to meet overall goals. This is because locally optimised KPIs can create a false sense of achievement, while masking systemic inefficiencies.
Production line efficiency: A smoothly running production line might face shipment delays due to logistics bottlenecks, affecting overall performance.
Maintenance downtime: Minimal machine downtime is beneficial, but poor scheduling could lead to underutilisation and lower output.
Inventory levels: Perfect stock levels mean little if raw materials are wasted or used inefficiently, driving up costs.
Transitioning from traditional supply chain management (SCM) to modern supply networks emphasises collaboration among interconnected entities, each with its own priorities. This shift necessitates managing conflicting objectives and information asymmetries, prioritising
trade-offs that enhance collective performance. Global optimisation of warehouse operations becomes crucial, involving synchronising inbound and outbound processes, minimising bottlenecks, and ensuring cohesive functionality—much like a well-coordinated sports team.
Real-time data and practical insights are must to find this equilibrium. Monitoring global metrics such as TAT and storage utilisation, rather than solely focusing on local KPIs like individual system throughput, helps warehouses adapt to dynamic demands. Real-time operational dashboards help identify bottlenecks, therefore supporting seamless running and accomplishment of strategic objectives.
For instance, using a WES might result in a 20 to 30 per cent increase in order fulfilment rate. Furthermore, real-time inventory and order status visibility can cut up to 50 per cent off pick and packing errors. The enhancements help to significant cost savings apart from improving output.
Real-time data integration can enhance decision-making by offering up-to-the-minute information, therefore, enabling managers to make more quick, better-informed decisions. Efficiently optimising resource distribution depends on responding to operational problems as they arise, thus, this agility is essential. Real-time inventory tracking guarantees accurate stock levels, therefore, minimising stockouts and lowering inventory costs. Many companies leverage demand projection and real-time inventory tracking to maximise warehouse operations and guarantee goods availability.
