Automating the Warehousing Supply Chain is Critical to CPG Success

Getting the right product to the right place at the right time is critical for all manufacturing companies. For producers of consumer packaged goods (CPG) products, this is vital to ensuring continued success and profitability. An integrated and automated supply chain is critical to reaching this goal.

Tapping into the Warehousing Supply Chain

When you look at a supply chain you can see that it is a combination of multiple chains woven into one. There is the material supply chain and the information supply chain along with other processing chains. Warehousing is a piece of the supply chain puzzle but has interconnected pieces that make up the “warehousing supply chain,” as seen below in Figure 1.

(Figure 1)

This concept is not limited to finished products. Anything used in the production process is stored in a warehouse or other storage location. Raw materials, ingredients, packaging, works-in-process and tooling, for example, must all be stored, inventoried and tracked. This is especially important in food manufacturing to ensure product safety and integrity.

When speaking of finished products, there can be multiple locations that need to be managed. There are manufacturer-owned facilities, third party logistics (3PL) locations and customer distribution centers. To ensure the efficient movement of inventories throughout the manufacturing and distribution processes, an organized warehouse can be a manufacturer’s best friend. Many times, delays in both manufacturing and distribution are caused by the inability to track product through the warehousing supply chain.

In many food and beverage operations, there are multiple warehouse locations in the same facility. There are temperature and non-temperature controlled spaces. New government regulations are restricting what types of products can be stored together. Raw food products (ingredients) cannot be stored with finished goods, works-in-process or packaging supplies. This justifies the need for multiple refrigerated or frozen warehouses in the same facility and emphasizes the need for serialization and license plating on cases, pallets and storage bins. These warehouse best practices are not just put in place to avoid food safety issues, but also to maintain inventory control and shared knowledge of where all items are at all times. Automation of warehouse facilities can greatly reduce many of the issues that can occur in warehouse environments as well as speed up the picking process and movement of goods.

Automation Benefits in the Warehouse

Automating warehouse processes can improve efficiency, allow for better management of employee activities, minimize costs and make it easy to adapt to business changes. The industry is growing, consumer preferences are changing and more products with shorter life cycles are now being introduced. This is increasing the number of products that need to be stored, and with next day delivery requirements, more and more smaller shipments need to be managed as warehouse traffic increases. New tools, systems and processes are also needed to adapt to these changes. In addition, even as automation makes managing data easier, there is an increase in information needed. The industry needs to evolve with these changes.

Automating the warehouse can have a number of benefits:

• Compliance
• Connectivity and Integration
• Speed and Agility
• Flexibility

Many consumer products manufacturers are facing pressures for increased product safety. Maintaining records and organizing all processes is critical. Producers of food and beverage products need to comply with changing government regulations and pressure to provide safe, quality food products. The more touch points that food and beverage products go through during their journey to the final selling point, the greater the risk for contamination. Automation allows for better tracking and traceability of these items. In addition, documentation required by government agencies is better managed and organized which enables compliance.

Communication is Critical for Automation Efficiency

There are many links to the supply chain. Keeping those links close together is essential and communication critical between the links. Automation not only modernizes equipment and facilities but also determines how data is managed and flows through an organization. Automation allows for instantaneous communication of critical data and improves data accuracy, which allows for better inventory management and reduced costs.

In today’s fast-paced market, reduced time in managing all aspects of the order management process is crucial for fulfilling orders on time and maintaining customer service metrics. There are more orders to process and less time to process them and get them out the door. Automated picking, sorting and product movement can reduce times managing and filling orders.

Product life cycles are shrinking. New products are being added and non-performers are being removed. Trends are driving businesses today. Automation in warehousing with the use of IoT, robotics and modern technology storage units can help a company evolve as the business changes. Modernizing and automating warehouses allows for efficiency in the future as well as today.

Success with Warehouse Automation

Manufacturers of Consumer Packaged Goods have a common goal: get the right product to the right place at the right time and in the right quantities. It seems like a simple task but in the changing world of today, this is becoming a growing challenge. The companies that will succeed will be the ones who can adapt to changes quickly and deliver the products that the end consumer needs with a synchronized supply chain and streamlined business processes. Automation throughout the organization is critical to reaching this goal and one critical piece is warehouse management. Automating warehouse operations is a major step in building the agile and effective enterprise.