Anyone who has started or “grown up,” as it were, within a small business can affirm that the urge to manage every component of a supply or fulfillment chain is a compelling one. There often seems to be an illusion that maximum control equals maximum profits, and it’s a difficult notion to shake. Mature, steady-growth companies tell a different story, however— one where a pinch of laissez-faire in vendor management best practices and flexibility in their warehousing, resource and logistics operations brings results.
A growing trend towards standardization is bringing the same message to the rest of the business landscape— preaching the wisdom of minimal management to large companies and small upstarts alike.
Injecting a Little Space
Assessing and responding personally to each issue or potential threat to a supply chain takes, unsurprisingly, people. The more people in a workflow, the harder it becomes to adjust, audit or course-correct with expediency or accuracy. Each individual contributes their own interpretation of rules and regulations, requires management attention and adds an additional chance for error in their section of the supply chain. By adopting a standardized approach and taking an arm’s length approach to vendor management, businesses gain more effort and resources to be used in other, perhaps more important, facets of their output.
As the logistics company Ryder explains, taking a lean approach and seizing on standardization as your guiding framework also gives access to consistent feedback numbers that can be leveraged into improvement efforts far more easily than those of a non-standardized supply chain or warehouse.
Public Warehouses and Private Info Don't Always Mix
Jerry Turner recently pointed out to Talking Logistics that keeping an ERP terminal in a public warehouse is not only a security issue, it could even potentially contribute to a Sarbanes-Oxley violation. Caught between a rock and a hard place— information about product movement needs to flow to companies and supply chain providers, after all— some businesses have seized on a better solution through message standardization.
By standardizing the type and flow of messages between a public warehouse's management system and a company's ERP system, the terminal itself can be removed from the warehouse (preventing free access to sensitive company information). And when messages are standardized, there's a clear framework present to communicate effectively. In addition to clarifying information and protecting sensitive internal data in a B2B sense, these standardized messages are very easy to pass along or tweak to serve as updates to clients and customers, preventing resource-wasting inbound phone calls and emails inquiring about an order's status.
Automation Likes Standardized Tools
With many warehouse management and fulfillment systems incorporating an increasing amount of automation, removing human interference beyond general quality control and oversight becomes a prominent goal. With message standardization comes a natural, symbiotic relationship to automation where out-of-stock messages are primed to trigger reorders or overstock alerts are programmed to reduce regular deliveries and so on. Even if automation isn't a major consideration in your current workflow, the overall trend of business tech is decidedly clear, and you'll be making intelligent decisions for the future when you opt to standardize messaging between your ERP and WMS.
Scrambling to catch up when faced with a fork in the road gives your more prepared competition the chance to leapfrog ahead— a vulnerability that can take the wind out of your proverbial sails.
Examining the current complexity of your current ERP-WMS communication and visibility may offer some unpleasant insights, but remember that it's also a great way to establish new, and better, warehouse and vendor management best practices. Workflows that put some distance between your company's future planning and current inventory and fulfillment practices can not only help protect sensitive data, but can be used to improve customer relations through transparency and updates and bring your company in line with accuracy for audits and compliance assessments.