As consumer spending cuts hit grocery sales Jez Tongue of @logistics Reply explains how food manufacturers can minimise the cost of warehouse management to ensure margins remain strong.

Until recently grocery retail had largely escaped the tightening of household budgets with big ticket items such as cars and electrical items taking the hit. However, the rising cost of food production has pushed the price of even basic food items beyond the means of many and more than ever value is the determining priority for a consumer purchase. To survive, food manufacturers need to look at ways of cutting costs and increasing efficiencies without reducing quality or service to their customer – the retailers, or to the retailers’ customers’ –the consumer.

This should not be reviewed as a threat, but an industry-wide call to action. A time for all businesses within the white-label food production supply chain to review processes and address new practices and technologies, many of which have been proven in other markets, to introduce new efficiencies and cut unnecessary costs.

Automation is the key; a minimal upfront investment for long-term operational and competitive gain. Manual warehouse management processes no longer suffice.  There are too many suppliers and too many products and distribution channels to manage with pen and paper. What is needed is a warehouse management system (WMS) that draws together every activity function within the warehouse.

This sounds expensive and it can be! However, there are proven cloud-based WMS solutions, such as SideUp from @logistics available that provide the functionality of an on-premise solution with the “pay-as-you-go” convenience [and cost management and low maintenance] of utility supplies such as gas and electricity.

One of the major businesses benefits of a cloud-based versus on-premise WMS is the minimal need for IT system management or maintenance. This is all done behind the scenes by the solution provider. Only paying for the solution as and when you need it is another major capital benefit because it eliminates the cost of dormant capital investment or upgrades that serve only to meet demand peaks.

From an operational perspective the intelligence provided by the WMS enables the management team to achieve an ultra-lean warehouse.  Shift patterns can be reviewed; picking accuracy and efficiency improved with the introduction of RF or voice picking applications that deliver fulfilment instructions and best picking routes directly from the WMS to the picker.

Automated picking also enables real-time stock tracking and logging of damaged goods.  This introduces the option of just-in time stock ordering and item rotation to reduce waste and ensure the longest shelf-lives are always delivered to retailers and in turn, to their customers.

Automating a warehouse using a cloud-based WMS is low-risk and low-cost.  It guarantees financial simplicity and control and could quite possibly be the solution to save the grocery retail sector [and all those serving it] from the grips of the recession. With minimal start-up costs the return on investment for a cloud-based WMS is immediate.

Increased supply chain efficiency cuts overheads.  Lower costs maintain profit margins despite the growing cost of ingredients and fuel.  Healthy margins at all points of the supply chain mean retailers could avoid passing all rising costs on to the consumer or compromising on quality.

SideUp, @logistics Reply’s SaaS WMS provides complete visibility of the supply chain from warehouse to delivery.  It supports all elements from ideal stock placement through to route and fleet management.