Between the end of the Second World War and the beginning of the financial crisis in 2008, the UK saw a steady growth in productivity of around 2% a year. But since 2008, the UK’s productivity has only been growing at the same pace that it was at before the industrial revolution. And for the past five years, growth has only been about 0.2%. This marked reduction ranks UK productivity as the worst in the developed world.
One reason productivity is low is because manufacturing companies and distributors have been resorting to the use of cheap labour in order to ensure they can actually get their products out of the door. With the lowest rates of unemployment for 42 years, UK wages are low at the moment, meaning businesses are willing to spend on wages rather than upgrading their facilities.
But with productivity continuing to flatline, this is a short-sighted strategy. The only way that companies will be able to tackle their own productivity issues will be to address their chronic underinvestment in technology, infrastructure and facilities. Investment in these areas will make the UK workforce – and the country’s businesses – more profitable.
There are five areas of importance within the supply chain that companies can focus on.
Productivity is being hampered by creaking infrastructure. But investment in newer warehouse equipment. Tools such as conveyors, roller slides, pallet racking machines, box makers and filling machines can all help save time in the warehouse.
And automation in the form of robotics can also aid productivity. Robots can work 24-hours a day without breaks, and can supplement a human workforce.
Warehouse Management Software (WMS) enables the use of system-driven processes in the warehouse. This reduces the administration load, often leading to a completely paperless warehouse, and therefore the associated labour costs.
With functionality such as cartonisation tools that predict the size of packing boxes required for each order, packaging costs can be reduced. And labour costs can be minimised by the better forecasting that WMS can bring. When you can accurately predict the peaks and troughs in the volumes of work to be done, you can ensure your stock holding is optimised, meaning an improved cash flow.
Over two years using HighJump Warehouse Edge, one of our largest customers has improved the average number of lines picked per operative user per hour from 36 to 126. Such performance increases are remarkable.
3. Warehouse structure
Having an optimal warehouse layout is another key to productivity. Warehouse efficiency is affected by the layout of the space you have, the accessibility of products, the throughput of your various products and the general flow around your warehouse. When your products are in the ‘right’ place and your warehouse is organised efficiently, then putaway, picking and packing can all be achieved as effectively as possible.
This may mean that you need to implement proactive changes to the layout or positioning of products, according to seasonality, for example. Equally though a reactive response may be required to move popular products closer to picking or packing locations as needed.
Integration of your ERP and WMS with other systems can reduce administration, meaning greater productivity can be achieved, along with savings in time and money. Having systems that talk to each other reduces the need for manual input or manual workflow contributions. For example carrier integration or Electronic Data Interchange (EDI) solutions can speed up and automate processes, augmenting throughput and efficiency.
5. Process review
Ensuring your processes are as effective as possible can negate any weaknesses that may hinder productivity. Adopting the ‘marginal gains’ approach favoured by cycling coach, Sir Dave Brailsford, companies can look to make continual small improvements in their processes that progressively add up to a significant improvement. This ‘kaizen’ mentality of continuous improvement can chip away at minor issues over time, combining to create significant cumulative improvements.
Improving productivity in the warehouse
Addressing low productivity and its causes is key to a company’s success. If you’re struggling with productivity issues, setting a budget to deal with equipment limitations, outdated software, non-optimised warehouse layout, lack of integration or the need for process reviews is vital. If you allocate a budget to improvement, then you reduce your reliance on cheap labour, which, let’s face it, may not be as readily available in the future due to Brexit.
If you want to remain resilient to changes in the market, Balloon One can help you boost supply chain productivity via reviews of your processes, KPIs, warehouse layout, software integration and more. Please call us for more information on 020 8819 9071 or contact us using the website form.