Business Strategy Common Business KPI types Warehouse Strategy
Financial Health Profitability Liquidity Inventory Turnover Return on Assets Reduce Costs: per period, per volume, or per order
Governance CSR, ESG and DEI Structure & Accountability Resilience & Continuity Audit Accuracy Expand Reporting, Improve Safety & Sustainability
Growth Customer Acquisition Cost Sales Revenue Brand Awareness Headcount & Asset Value Free Up Capacity, Be Ready to Scale
Process & System Performance Productivity & Waste Project Success Rate Output Quality Capability Adopt New Technology and Build Digital Maturity
Customer Satisfaction Churn Rate Net Promoter Score Customer Lifetime Value Perfect Order Rate Ship faster, in full and with thorough documentation
Culture & Effectiveness Employee Retention Participation & Satisfaction Profit per Employee Performance of Individuals Improve employee quality of life and learning opportunities.

Tackling the Top 8 Warehouse Management Challenges in 2024

January 26, 2024
Joe Fitzpatrick

A good warehouse manager has to be resilient and adaptive.

They must be prepared for the unexpected while pushing for continuous improvement. That's not easy to balance, because on top of managing inventory, staffing, and equipment, they must also navigate customer expectations and relationships with carriers and other stakeholders.

Warehouse Managers who are new to the job tend to face a trial by fire. They need to learn quickly to be able to manage the complex interplay of factors that contribute to the success of a warehouse.

At any moment, they can be surprised with staff shortages or absenteeism, supply chain disruptions, and internal stakeholders with unrealistic expectations. All of this can add up to headaches that require resourcefulness to overcome.

But it's still a rewarding job, especially for the warehouse manager who can navigate these challenges. Doing well can play a major role in the overall success of a business, and there’s nothing like the satisfaction of solving a constantly-evolving puzzle and bringing order to chaos.

Without further ado, here are the 8 most painful challenges almost every new warehouse manager will run into sooner or later.

1. Elusive Inventory Accuracy

Poor inventory accuracy results in stockouts, overstocking and lost sales. A Swiss study on retail supply chains in 2005 found that even an inaccuracy of 2% has a significant business impact. Executives rely on warehouse managers as the first line of defense against these issues.

Even when warehouse processes seem to be working well, manual counts tend to reveal discrepancies from what your systems expect.

To get the situation under control, a warehouse manager should conduct a rigorous root cause analysis, perhaps using an Ishikawa diagram.

There are a number of factors that might not be immediately obvious, like:

  • The impact of storing the same SKU in multiple locations
  • Frequent changes to the inventory mix
  • Tech issues - e.g. faulty barcode scanners
  • Lack of standardization
  • The team’s beliefs about the importance of manual counting
  • Thoroughness of inspection during receiving

There are a few strategies warehouse managers might consider to address these issues.

First, emphasize the direct impact of inventory accuracy on business outcomes in training sessions. Ensure staff understand their role in preventing stockouts and overstocking, so they don’t see inventory tasks as busywork.

Next, implement systematic cycle counting, isolating sections of the inventory to quickly identify and address specific problem areas. This targeted approach allows for more immediate corrections and better inventory control.

If possible, try to unlock more budget from senior executives by explaining the direct impact of technology investments on operational efficiency and cost reduction. If they’re on board, focus on solutions like advanced scanning systems and real-time tracking that offer tangible improvements in inventory management.

Then, conduct a thorough review of existing inventory processes. Apply Lean or Six Sigma methodologies to streamline operations, eliminate redundancies, and standardize procedures for more consistent inventory handling.

Finally, a less-obvious approach: start at the loading dock. Unnoticed discrepancies in what is actually received from suppliers will permeate through your system and soon become invisible. Implementing a dock scheduling system can improve the accuracy and efficiency of receiving operations

2. Loss and Damage to stock

Human error, theft, environmental factors, accidents, inadequate packaging, and even natural disasters can seemingly conspire to keep you from hitting your KPIs.

To tackle this, warehouse managers must combine preventive measures, mitigation strategies, data analysis, and stakeholder collaboration.

Preventive measures include proper staff training, sufficient lighting and signage, anti-theft systems, and making improvements to the facility and storage equipment.

Specific training modules on proper handling techniques and storage best practices can significantly reduce accidental damage. Implementing RFID tagging and real-time inventory tracking systems can also minimize the risk of theft and loss.

Mitigation strategies involve creating and enforcing standard operating procedures (SOPs), conducting regular safety audits and inspections and establishing a clear reporting and resolution process.

Integrating incident reporting into a centralized management system allows for faster response and more effective tracking of recurring issues. Predictive analytics can aid in anticipating potential areas of loss and implementing corrective actions proactively.

To effectively track and analyze loss and damage incidents, warehouse managers should collect data on incidents and their causes and analyze trends to identify problem areas.

Investing in software can turn this data into actionable insights, allowing for more targeted preventive strategies. Regularly reviewing and updating SOPs based on these insights ensures continuous improvement in handling procedures.

Finally, if the problem starts with goods received, the only solution is to talk with suppliers and ensure proper packaging and handling. That can be a challenge if lines of communication are already somewhat strained.

But taking carrier relationship management seriously is worth the investment. Establishing a supplier scorecard system can objectively evaluate and communicate performance expectations, leading to better supplier accountability and collaboration.

"If you want to be methodical, the loading dock is the most logical place to start"
"Taking carrier relationship management seriously is worth the investment.‍"

3. Workforce Turnover

High levels of labor turnover have become normalized in logistics.

As a result, warehouse managers often have to work with teams that don’t operate at peak efficiency, due to poor morale and a lack of familiarity with the facility and its processes, to say nothing of ineffective communication.

This also means that the warehouse manager must devote more time to training and people management, and so has less energy for operational thinking.

The personnel situation in warehouses is a vicious cycle, but there are ways to mitigate it and maintain a convivial workplace.

First we have to understand the causes of this phenomenon:

  • Inadequate compensation
  • Limited growth opportunities
  • Lack of recognition
  • Poor working conditions
  • Mismatch between job expectations and actual responsibilities

To tackle this, it makes sense to start from the beginning, with the hiring process.

Warehouse managers need to manage internal stakeholders involved in hiring and identify discrepancies between what is communicated to applicants and the reality of the work. This ensures new hires are more engaged and trust the job from day one.

Next, they should assess the environmental factors that affect job quality, like temperature, ventilation, noise, natural light and sanitation. In some cases, small changes can have a significant impact on morale. Besides, investing in ergonomics can bring about productivity improvements.

Acknowledging the good work done by employees is the cornerstone of a strong team. Managers are well-advised not to overlook this small, simple daily action.

But above all, getting to know workers, what they hope to get from the job and where they hope to go next is the most valuable thing any manager can do to combat attrition. In some cases, there’s just a tacit understanding that the person will stick around for a few months before moving on. With mutual respect, both parties will work to give each other the maximum benefit from those months.

In other cases, there might be an individual who wants to learn a higher-earning skill, but isn’t sure what that might be, or otherwise lacks the knowledge of what pathways are open to them. If warehouse managers can find opportunities for these workers, whether it’s tasking them with learning the ins-and-outs of the WMS or coaching them to lead others, the morale boost will be well worth the effort.

4. Equipment Maintenance

The repercussions of sudden equipment failure can be dire.

Lost productivity, delayed shipments, and the risk of workplace accidents make proactive management essential. A key strategy is setting up a comprehensive equipment maintenance schedule. Each piece of machinery needs regular check-ups and real-time wear monitoring.

Many warehouses today lean towards outsourcing equipment maintenance, drawing on the specialized skills and resources of vendors or third party maintenance providers. But a 2014 research paper observed that “While outsourcing has great potential for significant benefits, it also includes some potential risks such as loss of critical skills, loss of cross-functional communications and loss of control over a supplier.”

Even with maintenance contracts in place, regular inspections by internal staff are crucial. Predictive maintenance tools, like IoT sensors and AI analytics, can spot issues before they worsen. This not only catches potential failures but also prolongs equipment life.

However, finding time for extensive maintenance is a challenge. Rushed repairs often waste resources and increase the risk of future problems. The issue isn’t just about resources but about prioritizing maintenance within tight operational schedules.

Strategic planning is vital for creating maintenance windows. This involves coordination across departments. By aligning with logistics, inventory, and operations teams, maintenance can occur without disrupting productivity.

Optimizing the loading dock flow also helps. Implementing a dynamic scheduling system for the dock can create predictable maintenance opportunities. A data-driven approach to shipment scheduling ensures no inbound or outbound shipments at specific times. This approach minimizes the impact on daily operations, making it feasible to conduct thorough maintenance

5. Unpredictable Sales Preventing Space Optimization

Rapid business growth can lead to congestion. When sales exceed expectations, warehouses may find themselves struggling to keep up. Inefficiencies appear and quickly get baked into daily operations. Sudden drops in sales can be just as disruptive, leading to underutilized resources.

Warehouse clutter, a byproduct of these fluctuations, can lead to unsafe working conditions and a higher risk of stock damage.

Budget constraints may get in the way of upgrading storage systems, and even changing layouts can be costly and disruptive to daily operations. Worst of all, it’s not easy to predict the impact of such changes on real productivity.

This creates a dilemma for warehouse managers, who may need to consider downsizing or consolidating inventory, increasing density or finding temporary storage solutions.

In addressing the unpredictability of sales, a warehouse manager's approach needs to be both flexible and informed. It’s about establishing a system of communication with whoever is responsible for sales forecasting, whether it's a team, an automated system, or a combination of both. The objective here is not just to receive forecasts, but to develop an intuitive sense of what might be coming.

6. Being held responsible for upstream problems

Whether it’s a supplier going bankrupt overnight, a natural disaster, or an outbreak of poor quality control, warehouse managers often take the fall.

This phenomenon is more pronounced in demand-oriented companies that outsource big parts of their fulfillment operations. In this type of organization, senior leadership sometimes sees the warehouse manager as the guardian of the supply chain.

You might get asked ‘what was your contingency plan and why did it fail?’ But even a detailed answer might not satisfy. It’s vital to acknowledge that some scenarios are beyond your control, yet it's equally important to demonstrate proactive planning. Showcasing how you anticipate and mitigate risks, even those upstream, can reinforce your value and foresight in the eyes of leadership.

There are two things you can do to take control of the situation.

The first is up-front expectations management, during good times and bad, always pushing back against inappropriate goals. This involves not only setting realistic targets but also educating stakeholders about the complexities of supply chain dynamics.

Communicate regularly with upstream partners to stay informed about potential risks and changes, allowing you to adjust your strategies and inform stakeholders promptly.

The second is constant collection of data. Experience might give you a sharp intuition, but people outside of logistics won’t always understand. Hard numbers justify your decisions and help you build a more resilient kind of trust with stakeholders.

In this regard, investing in advanced analytics tools can be a game-changer. These tools can provide real-time insights into supply chain activities, helping you to anticipate problems before they occur and present data-backed scenarios to stakeholders.

7. Data Collection

Whether or not warehouse managers seize the initiative, it’s quickly becoming a data-driven discipline.

New tech is designed for a world where business data is clean and accurate. But most warehouses still struggle with outdated systems and manual processes, leading to inconsistencies and errors in the data collected.

Sensors and RFID tags can reduce errors and streamline the data-gathering process, but it’s not always feasible to implement such devices.

Security can also be a concern, as can retrieving meaningful, actionable information from the data.

Some types of data may have to be collected from third parties, either by connecting to their systems or speaking to them directly. Partners might ask ‘what’s in it for us?’ and so warehouses have to think not just about their own tech strategy, but the tech strategy for the whole supply chain!

Fortunately there are paths forward.

Warehouse managers can find easy win-wins with carriers and suppliers, like working together to speed up truck turnaround times at the loading dock. These kinds of initiatives don’t require complex data-sharing protocols. It’s enough to have a platform partners can log into to book appointments.

"Most warehouses still struggle with outdated systems and manual processes"
"When it comes to shipping and receiving processes, there are factors outside of your control."

8. Bottlenecks in the Loading Dock

Warehouse managers can painstakingly optimize every aspect of warehouse operations, but when it comes to shipping and receiving processes, there are factors outside of their control.

Sometimes the loading dock can go a whole day almost in silence, before every truck arrives at once at 5:00 p.m., including loads you didn’t even know were coming.

Slowdowns in shipping and receiving can force you to move workers and equipment from other areas, not to mention disrupting the overall rhythm and flow of daily operations.

The only way around this is to implement dock scheduling, and even then there’s no guarantee that carriers and suppliers will stick to the schedule.

You need a way to incentivize partners to arrive on time.

How to Overcome Warehouse Challenges With DataDocks

DataDocks lets warehouse managers take control of loading dock operations. When shipping and receiving processes no longer demand the lion’s share of your attention, you can focus on other areas of the warehouse.

To do that, DataDocks gives you a dock scheduling platform that collects data on the timings of loads, so you can get more accountability into the conversation with partners. Over time, carriers improve their performance because they can see how arriving on time gets their loads worked faster.

Warehouse management comes with many challenges, and it takes a cool head to face them. But dealing with external partners is one thing that doesn’t have to be so difficult.

For an in-depth discussion of what DataDocks can do for your warehouse, book a demo with our team or call us on (+1) 647 848-8250.

  • Fleisch, Elgar, and Christian Tellkamp. “Inventory Inaccuracy and Supply Chain Performance: A Simulation Study of a Retail Supply Chain.” International Journal of Production Economics. Elsevier BV, March 2005.
  • Mangano, Giulio, and Alberto De Marco. “The Role of Maintenance and Facility Management in Logistics: A Literature Review.” Facilities. Emerald, April 1, 2014.

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