Manufacturers are seeing value in rolling out intelligent software platforms that deliver optimised visibility and control across the entire supply chain; from manufacturing right through to delivery, as David Rubie writes.
The warehouse has traditionally taken a back seat to the manufacturing operation of a business when making investments, however in recent years, manufacturers are changing their approach and seeing value in finding efficiencies and savings in their warehouses.
This alignment of the importance of both the manufacturing production and warehousing operations has led to a much higher degree of integration of technology and systems.
For instance, manufacturers are seeing value in rolling out intelligent software platforms and supporting technologies that deliver optimised visibility and control across the entire supply chain; from manufacturing right through to delivery.
There are a number of external factors encouraging this investment, with an evolving market placing strong demand on manufacturing supply chains to deliver goods more rapidly and flexibly.
Consumers and retailers now demand access to a larger range of products and they want to be able to shop through a number of channels – in-store, online, click-and-collect and more.
Manufacturers are also now competing in a global market, where retailers can more easily source products from producers world-wide.
This increasingly globalised supply chain means local manufacturers have to maintain cost competitiveness in a much larger pool of producers, that, due to differences in geography and legislative requirements, have very different space, labour and operational costs.
Overcoming the challenges
Australian and NZ manufacturers are looking to overcome these pressures by increasingly focusing on integrating their systems, from production right through to logistics.
The greater visibility of their operations that manufacturers have, the better they are positioned to make accurate operational decisions to further optimise their supply chain.
Many manufacturers are re-shoring their logistics operations in-house, in order to have better control over inventory as retailers demand a wider array of products, as well as a higher frequency of delivery.
The priority for manufacturers is increasing efficiency, productivity and visibility, through automating more processes.
The motivation for automation has arisen because it has been proven that the more a business eliminates ‘operator touches’ within the supply chain, the more cost effective it is and the safer for staff.
Due to the nature of the Australian and NZ market, full automation isn’t always realistic, however warehouses should be using labour effectively and automating repetitive tasks, heavy manual work, or work in environments that are harsh and difficult for workers.
While in the past manufacturers had a large network of warehouses, we are now seeing many manufacturers consolidate to fewer warehouses, or a single warehouse, integrated into the manufacturing location.
This is due to the growing issue faced by manufacturers of the increasing cost and availability of land in Australia.
The trend for manufacturers to reduce their real estate and eliminate touches by fully integrating manufacturing and warehousing operations on the same site, is seeing significant operational savings in labour, rent and transport.
Larger international manufacturers are also introducing global benchmarking where they have the systems in place to measure how their business is performing in different locations, allowing them to make the biggest investments in well-performing or high-growth regions.
New technologies
There are a number of technologies that manufacturing warehouses are considering in order to reduce the amount of physical space their facility occupies, as well as to increase automation where possible.
Many manufacturers are investing in high-bay warehouses with automated storage solutions to meet both their space and automation goals.
By increasing the height of storage, high-bay warehouses reduce the size of land required, and may allow a warehouse to be constructed right next to the manufacturing operation with all the benefits this ensures.
Others manufacturers are increasing their automation with Goods-to-Person (GTP) solutions that enable warehouse workers to build orders at an ergonomic work station in order to increase efficiency, throughput, accuracy and operator health and safety.
Warehouses are also increasing automation to maximise operational resilience, reliability and performance through automatic guided vehicles (AGVs), and palletising robotics to build complex mixed-case customer pallets
Those manufacturers that automate to drive efficiency, productivity and visibility throughout their operations will be best placed to rise to the challenge of staying competitive in a rapidly evolving global supply chain.
[David Rubie is Industry Logistics Manager with Dematic]