Without the collection of data, you cannot accurately measure process improvement. And the more data you collect, the more insights you can potentially gain. Process measures quantify different aspects of your operation, from the operator level and up:
- How long did it take to receive pallets last year? How much did it cost?
- What are the most wasteful steps? How do we eliminate them?
Until recently, warehouse managers had to rely on manually gathering data for process improvement, a cumbersome and time-consuming undertaking. Perhaps, as a result, organizations have tended to put the focus on outcome measures (“We spent $XX on supply chain last year and delivered YY Packages”) that may be easy to report but only serve to solve “the problem of the day” rather than deliver true insight.
With the advent of the Internet of Things (IoT) and the associated warehouse technology, however, letting process improvement take a back seat to simpler forms of reporting is detrimental to the productivity of your organization. A growing number of organizations (your competitors?) are day by day discovering the benefits of putting IoT technology to practice in their warehouse, distribution, and manufacturing operations. Spending on the Industrial Internet of Things (IIoT), for example, is expected to rise to $500 billion worldwide by 2020, up from $20 billion in 2012, according to an Accenture report.
An article in SupplyChain 24/7 observes:
“Increasingly, companies are applying IoE [Internet of Everything] technology to their supply chain operations. That includes connecting the different players, from suppliers to retailers. But it also involves another crucial link in the chain: warehouse operations. Such smart warehouses are able to accomplish a host of improvements, from reducing forklift damage to increasing productivity, with a significant impact on the bottom line.”
As a side note, the same SupplyChain 24/7 article cites Spokane Industries as a prime example of a company that leveraged an IoT system – equipment monitoring by TotalTrax – to reduce forklift damage and improve driver accountability. Spokane lacked a formal system to track forklift impacts, relying instead on drivers to report incidents, but poor driving habits, misuse, and impacts were taking a noticeable toll on the company’s fleet. Following the implementation of the equipment monitoring solution, the company quickly realized a 90 percent reduction in impacts related to vehicle damage.
Warehouse technology connects all the pieces of your warehouse – drivers, managers, forklifts, pallets, etc. – collecting real-time information that you can use to determine where your costs lie and what the drivers of those costs are.
In addition, taking advantage of the functionality of enterprise level tools (LMS or WMS) allows you to understand how assets are actually being utilized, how they relate to one another (speed of delivery vs. safety and costs, for instance), giving you the root cause of problems and a clear understanding of what process improvements are needed.
In the quest to examine and improve the underlying structures that drive costs in your organization, IoT technology should play an integral role.