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- Many people take warehouses and distribution centers for granted, but they're not just big buildings where we store boxes. These facilities often house millions of dollars worth of inventory and they employ a large percentage of a company's workforce. So using technology to manage them efficiently is actually a critical part of optimizing your supply chain. In this video we'll talk about warehouse management systems, special computer programs that are designed to help you manage the processes in a distribution facility.
A warehouse management system, or WMS, should help you keep track of four things. First, the products that you're handling. In a distribution center each product is called a stock keeping unit, or SKU. Each SKU has its own attributes, like size and weight. Some SKUs also require special handling. For example, they might contain hazardous materials or they might need to be refrigerated. You also need to keep track of your inventory storage locations.
These are the spots throughout a warehouse where you can store products. A location could be a spot on the floor or it could be a particular shelf on a rack. You need to match the attributes of your SKUs to the attributes of your storage locations. And that's a process we call slotting. Then you need to track the loading dock doors for your warehouse. Usually you'll have one set of dock doors for your inbound deliveries and a separate set of doors for outbound shipments.
But in smaller facilities you sometimes need to use the same doors for inbound and outbound. And finally, you need to keep track of your people and their productivity. You have to understand how long it takes to do the work in a warehouse in order to plan to have the right number of people to do it. Another important inventory location that's sometimes overlooked is the parking lot or the trailer yard outside. Inventory can sit on trailers waiting to be received, or it can sit there loaded waiting to be picked up.
There are also situations where overflow inventory can actually be stored on trailers in the yard rather than storing it inside the warehouse. In order to have full visibility to your inventory you need to have some way to see these trailers, either inside of your WMS or with a separate program called a yard management system. A great resource for keeping up with trends in warehouse management is the Warehouse Education and Research Council or WERC.
They run an annual benchmarking study that can help you compare your facility's performance to other companies. Choosing the right WMS and configuring it correctly can give you better inventory visibility and tighter control of the distribution facilities in your supply chain. And the insights in metrics from your warehouse management system can help you drive improvements and manage your whole supply chain more effectively.