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Warehousing Is More Than Just Storing Goods; It’s Full-Service Logistics

Thursday, July 9th, 2015

The International Warehouse Logistics Association (IWLA) recently turned 125, and the American Journal of Transportation (AJOT) released an article detailing industry advancements over that time. To gain inside information, AJOT decided to interview our very own vice president and IWLA chairman, Rob Doyle.

At its core, the warehousing industry has always received and shipped boxes. “That is the nexus of what we have done for the last 125 years,” explained Rob. However, the greatest advancements in the industry have come from offering an ever-increasing menu of value-added services though embracing and capitalizing on new technology.

Technology made its first big impact through improved inventory management systems that replaced the time-consuming and error-prone manual methods. These cardpunch computers paved the way for future systems including today’s radio-frequency identification (RFID) and complex inventory management software. This technology has greatly increased the speed and accuracy at which product can be stored, moved and shipped.

However, inventory management is not a remedy for all the difficulties associated with warehousing. Real-time status information is one of the largest demands from customers outsourcing their warehousing and distribution. This is the heart of providing quality customer service. The speed at which information can be delivered improves the entire supply chain by providing real-time status updates that make just-in-time inventory models a possibility. This lean supply chain model allows for greater control of cost for the customer, which can then be passed onto the end user of the product. Former IWLA chairman, Jere Van Puffelen, elaborated:

“When you look at the potential for trimming back the inventory level a little because of the days you can take out of the cycle, and the faster cash flow that you can create – with everyone’s cooperation – it provides a lot of opportunities for our industry [and customers] in the future.”

There are a lot of manual processes left in the distribution warehousing industry. As automation continues to take hold, the next step in increasing efficiency will be harnessing the increased availability of fiber optic lines. These lines have the potential to open up data pipelines to further increasing cost-effective measures. Rob said, “The 3PL [third-party logistics firm] that can provide real-time information real fast and in a customizable fashion has a leg up on the competition.”

Rob also spoke at great lengths about how technology is pushing the warehousing industry beyond just providing the established and basic function of receiving and shipping product:

“Traditionally,” he said, “a warehousing company just provided warehousing services to store a customer’s goods and that was the extent of the relationship. Today, the relationship is more complex and multidimensional, as many 3PLs now offer a full suite of supply chain services to include asset-based transportation, packaging, kitting, fulfillment, transportation management, freight forwarding and many other services.”

“A ‘one-stop shop’ has become more commonplace as our customers prefer a single point of contact where possible.” Doyle continued. “This combining of services helps them in many ways to include complete supply chain visibility, fewer contracts to maintain, ease of invoicing, cost reductions and a higher level of quality as they begin to view their 3PL as a partner versus a vendor. The ability to offer a more robust suite of services will also lead to a competitive advantage in the future.”

The future of the warehousing and logistics industry looks incredibly bright, but it’s not without its dark spots. Another trend that isn’t easy to overcome is the lack of management expertise in the field along with a driver shortage on the transportation side. Rob termed this “the war for talent” and concluded that the key to maintain a quality workforce is creating a good work environment, inclusiveness and good wages where they know they have a path to more responsibility as they move up the ladder.

Over the last 125 years the IWLA has played a very important role in meeting this industry challenge head on. Having helped develop and grow the current workforce, along with push the entire industry forward, they have the knowledge and wherewithal to develop the needed quality operators in North America.

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