How can a Warehouse Management System help improve your spare parts warehouse?
Many manufacturers are having to adapt their warehousing operations to cope with increasing requirements to store more spare parts for repairs. This certainly increases the complexity of warehousing operations and creates a very strong business case for investing in a Warehouse Management System (WMS) solution.
Research released by the business advisory firm BDO highlights just how attitudes towards minimising waste have changed. Up to £1.3 billion was deployed into circular economy investments in the UK in the 12 months between spring 2022 and 2023, with the industrial and manufacturing sectors being the most prominent. These two sectors accounted for 36% of deal volumes in 2022, topping the circular economy investment league for the second year in a row.
What this data highlights, is how a 21st Century more sustainable ‘make do and mend’ mindset is rapidly taking over British industry. It means that many manufacturers are having to adapt their warehousing operations to cope with increasing requirements to store more spare parts for repairs. This certainly increases the complexity of warehousing operations and creates a very strong business case for investing in a Warehouse Management System (WMS) solution.
Gone are the days when people would accept throwing away equipment rather than trying to repair it. Now fixing is being legislated. The ‘Right to Repair’ movement has already seen legislation passed in a number of US states requiring manufacturers to offer spares. The UK has introduced similar measures and now requires manufacturers of consumer durables like washing machines, fridges and televisions, to supply consumers with spare parts for ‘simple and safe’ repairs. Other parts for more complex repairs must also be freely available to professional repairers, with this level of expanded support required for up to ten years after the original sale date. Very soon the rules will be expanded to include smartphones and a much wider band of consumer electronics that would otherwise end up as waste electrical and electronic equipment (WEEE).
For manufacturers and also service agents, the legal requirement to offer repair services means a sudden need to establish a comprehensive spare parts operation. This will likely involve storing and shipping a huge number of individual SKUs, for current and legacy product lines. It may be the first time some manufacturers will have been required to provide spares and could mean a total overhaul of their warehouse operation. Here’s how a WMS solution can help ease the transition to a new way of working.
Space utilisation and location management – Storing and shipping spare parts will require the introduction of many new warehouse locations, at a time when extra space may be at a premium. Having to re-configure a warehouse to store hundreds of small items could be a logistical nightmare, but it becomes very simple when a WMS takes control. The WMS software will identify the best places to put every item based on how often they are needed to achieve the fastest routes around the warehouse. Available space will be flagged for use and up to 30% more items can be stored in a given area, because the system will guide operatives to find the parts they need. A WMS also allows for the creation of dedicated storage locations for spare parts based on their characteristics, such as size, fragility, or storage requirements. This ensures that spare parts are always stored in optimal conditions and are easily accessible when needed.
Integration with automated racking and shelving – Creating a spare parts warehouse could mean having to go higher, with taller aisles and racking. Many manufacturing companies have already introduced automated shelving or carousels to bring the items to pickers in the warehouse. These can be integrated with a WMS to make the whole picking operation completely seamless and as fast as possible. Rather than having to go to the stock locations, items are delivered to pickers on a packing desk for maximum speed.
Pick multiple orders simultaneously – A spare parts operation will require many small shipments to be created and trying to pick each order individually will be time consuming and inefficient. A WMS allows multiple orders to be handled concurrently. Known as wave picking, this method asks pickers to select the right quantities of the same item needed for different customer orders when they reach a certain location. The part-picked orders are tracked by the WMS and then, once completed, groups of orders can be approved and sent off to shipping.
Avoid spiralling labour costs – Picking costs typically represent the bulk of labour overheads in a warehouse and this could significantly increase in a busy spare parts operation. Using a WMS, manufacturers can achieve many efficiency gains and keep a tight control on labour costs. For instance, when migrating from paper to a WMS, most companies see a 30% improvement to warehouse efficiency and productivity. This will be important because spare part services are not necessarily going to be a big profit making activity, just something manufacturers are legally bound to offer to reduce environmental waste.
Automate inventory management – Stock counts and replenishment management is another aspect of warehouse management to get right for manufacturers introducing a spare parts operation. Without the right technology in place, it wouldn’t take long for out of stocks to be creating supply problems and damaging customer relationships. When a WMS is controlling key warehouse processes, stock management can be automated, with ongoing replenishment requests triggered as soon as stock levels at a particular location hit a minimum level. Perpetual inventory checks also become part of the day to day routine, meaning the warehouse never needs to close for a stock check. For spare parts with specific batch or lot numbers, a WMS can track the movement and usage of each batch. This capability is essential for industries with strict quality control requirements.
Over the coming years we can expect governments to be adding more and more items to the list of consumer products expected to be repairable. Why not take a proactive step towards becoming a more sustainable and environmentally responsible brand before this happens? By adding a WMS to your warehouse, you could be launching your spare parts division in weeks and maybe even create a very important competitive differentiator.