We are always reading about the latest ways automation is transforming warehouse operations and even the adoption by some companies of “lights out”, almost unmanned distribution centres. According to reports in the Wall Street Journal, over a fifth of warehouse operators have invested in automation to help address labour shortages, particularly to handle surging e-commerce orders. Yet as much as we hear about automation and new cutting edge technologies being more widely adopted, there are still many instances where the technology of choice for managing a busy warehouse is still the humble spreadsheet.

We have first hand experience of this and typically expect to find spreadsheets in smaller warehouse operations. Roughly 2 in 5 of every warehouse that we first visit is using spreadsheets, which have historically been employed to manage everything from inventory management to quality control. Two very common uses are in stock management applications.

Spreadsheets used for inventory management

In this example, spreadsheets can be used for tracking inventory levels including stock quantities available and their locations, plus the status of items being packed in the warehouse. Warehouse managers using spreadsheets will have some visibility of stock levels to manage replenishments and restocking, but it won’t be in real-time. Once a warehouse becomes busier, this causes a lot of problems, because operatives are always working with out-of-date information. They won’t know if items have been picked already or if a location was suddenly changed and they could be wasting time walking around aisles rather than being directed straight to available stocks.

Spreadsheets used for goods in and shipping

Spreadsheets can be handy for tracking when incoming shipments have been received and for recording individual supplier details, stock quantities received, any special storage requirements and the relevant location for stocks to be put away. Again, problems arise because the information is not generated in real time. Operatives won’t know whether the spreadsheet records are completely accurate and this can result in mistakes or inefficiencies.

Common issues when using spreadsheets in the warehouse

Although spreadsheets have a low entry point, are familiar to most workers, inexpensive and widely accessible, they can create a lot of problems. As a business expands and volumes coming in and out of the warehouse increase, they may not be the most efficient or scalable solution in the long run. For larger warehouses, those supporting e-commerce or more complex fulfilment operations, they are not an ideal solution. In the manufacturing sector, this inefficiency is compounded by having to manage two sets of warehouse operations. There are incoming raw materials to manage and picks for production plus the logistics of managing outbound finished goods. A Warehouse Management System (WMS) solution will be a better alternative and over time, pay for itself many times over through improved productivity and efficiency, reduced errors and lower requirements for human resources in the warehouse.

Here are some common ways that using spreadsheets to manage warehouse operations can mean errors creep into processes.

Data Entry Errors: This is the obvious one. People can’t help but make mistakes and manually entering data into spreadsheets leaves an operation at risk of recording incorrect quantities, item codes, or locations. Multiply the propensity to make an error up through a busy operation and across multiple spreadsheets and it’s easy to see how it can lead to much bigger stock management discrepancies. Using a spreadsheet also makes it very difficult to troubleshoot and correct errors made earlier in the warehouse. With a WMS installed, the data is captured in real-time and there is no need to manually enter information on the system. It’s captured automatically with a mobile device. Errors can very quickly be eliminated completely from a warehouse before they have a chance to be made, avoiding the need to correct problems or troubleshoot.

Formula Errors: If you have ever used formulas in a spreadsheet, you will know how easily they can be corrupted. Spreadsheets can be used to calculate total inventory quantities or shipment volumes, but even a small mistake can result in inaccurate data and reporting. With a WMS, the system automatically calculates total quantities and volumes on an ongoing basis. There is no need for users to access the back end calculations, the system comes preconfigured.

Version Control Issues: In a busy warehouse it is very common for multiple users to be working from the same spreadsheet simultaneously, which can present problems for version control management. Keeping track of which versions are being used can mean making decisions based on outdated or incorrect information. With a WMS there is always one version of a report in circulation. It is updated in real time and there are never any risks of working from incorrect information.

Lack of Data Validation: A spreadsheet is typically a static, printed document and users will not have the ability to validate their actions. They could select the wrong items on a pick, go to the wrong storage location or input invalid data. There is no way of checking things until it’s too late and the transaction has been completed. With a WMS, it is possible to build quality checks into each process beforehand. Users have to validate every transaction before starting another and the system checks and approves it before the next task can commence.

Complexity Management: Spreadsheets are fine in a warehouse that’s shipping 50 or fewer orders a day, or in an operation that’s entirely bulk order based. These environments are usually uncomplex and using paper based systems is often adequate. As a business scales, if it introduces e-commerce and B2C deliveries, or if warehouse operations grow in complexity, managing all aspects solely through spreadsheets can become very challenging. Trying to manage multiple and often interconnected spreadsheets to control different tasks will rapidly increase the level of inefficiencies and errors. For example, when using a spreadsheet, it’s tricky to coordinate multi-order, batch picking or to introduce perpetual inventory management. With a WMS, the system offers a single integrated view of operations and can aggregate orders for the day so that the same item can be picked in bulk and packed into the appropriate order later in the day. Pickers can also be tasked with checking stock levels as they move around the warehouse and recording it in the system, eliminating the need for a stock count.

When it comes to investing in your warehouse, there is a point at which it becomes uneconomical to continue working with spreadsheets. If you are employing just a few operatives, or if you are shipping less than 50 orders a day, perhaps there is an argument that you could ‘get away with’ using spreadsheets for a while longer. As soon as your business starts to expand, you may struggle to handle the volume of data processed and the number of transactions needing to be completed. Over time, this can lead to performance issues and an increased risk of errors as we have explained.

If you are not quite at the stage of investing in a full WMS but would like to consider improving warehouse efficiency, one good option is to consider a rapid access solution like Indigo QuickStart. This will provide all the key benefits of using a WMS, but with more limited functionality. It’s just enough to see improvements. Then as your business continues to expand, you can upgrade to the full solution once the investment is warranted.

To discuss how to ditch the spreadsheets, remove these islands of data and overhaul your warehouse operations, contact Indigo Software.

Author

Mark Leavy, CSO, Indigo Software