The Warehouse System as a tool

We’ve all heard of the expression about “the tail wagging the dog” and have been repeatedly told that, when investing in new IT systems such as warehouse management systems or in warehouse automation, the system should serve the business, and not the other way around!

The question we should be asking though is – Is that really the right approach or is there another more balanced way of thinking that can offer new opportunities and insights?

At The Logistics Business we believe there is:

  • Designing for the future is always a fraught process;
  • The result is often excessive modification and the consequent  legacy time bomb;
  • Using the systems you have as a tool to be exploited enables you to provide the best service at the lowest cost.

Even those companies that start off by saying they want ‘vanilla solutions’, systems that just use standard functionality with no modifications whatsoever, often end up with a range of bespoke functions that they feel they cannot do without.  And as time goes on, more and more functions are added – often in the hope that they will be incorporated into the core solution by the supplier at the next release.

Others who are choosing an automated or mechanised warehouse solution have a similar problem only more so, as they struggle over the years to cope with the lack of flexibility that often comes with these systems.

It’s not hard to see why this might happen.  In every business there are marketers trying to differentiate their offer, deliberately doing things differently and adding more services to attract new customers.  There are designers developing new products that have different shapes and sizes and order profiles and of course there is always the CEO who decides that what the business really needs to do is buy a competitor.

All of these changes mean that warehouses and the systems controlling them are continually having to be re-worked and altered to match the new requirements.  After all the tail mustn’t be allowed to wag the dog.

But what if there were a different way of looking at things?  What if the capabilities of your warehouse were the thing that drove the product offer, the base on which the marketing team and the designers and even the CEO made their decisions, constantly looking for new ways to exploit its talents.

For this to work and for it to make you successful it means of course that your warehouse has to be the best at what it does – able to deliver a better service at a lower cost than any of your competitors.

If this might sound a bit outlandish and risky and leave you wondering who would be daft enough to embark on such a thing!  Well quite a few have and in the process have become very successful.  In-fact, nowhere more so than in internet fulfilment.  In the year we are celebrating the 20th anniversary of the first internet purchase (the CD Ten Summoner’s Tales by Sting priced at $12.48 plus shipping for you quizzers out there!) we have had several reminders of how the likes of Amazon and John Lewis have had huge on-line success.  In part they have achieved this by building best in class fulfilment capabilities and then exploiting them to the limit.  In Amazon’s case by even distributing competitor’s products – because the warehouse has become the product, the tool that you are selling.

You may say that’s fine for retailers but I’m a manufacturer – my product is the thing, the thing that differentiates me from the rest – and that may well be true.  But you can still learn from the likes of Amazon.  By exploiting the tools you already have, your products are likely to be more successful and yeild better margins.  Most manufacturers would regard this attitude as obvious when it comes to production machinery so why not consider the warehouse in the same way.

Maybe sometimes we do have to let the tail wag the dog.