Problems

Warehouse management is labor-intensive and continues to be so for many companies

who do not adapt to more modern solutions. The processes of loading, sorting, unloading and

shipping out products, regardless of the type of the warehouse, are still highly reliant on human

effort. Inventory management is very important for companies in all industries to meet customer

demands, optimize sales and have a smooth logistical management. However, many

organizations struggle with optimizing warehouse management, whether it is due to not having

clarity of the stocks at any given time, restocking in a timely manner or in the costs and time

needed to manage the warehouse in general. This paper discusses three main problems that

modern warehouses face: inefficiency in inventory management, inaccuracy in counting stocks,

and inability to meet acceptable safety standards.

#1 Inefficiency in inventory management

The process requires a lot of time and manual effort for the movement of the inventory in

and out of the storage. Even the use of forklifts and other machinery in the warehouse is not

enough to speed the process adequately, especially when comparing to the alternative options

available. These innovations include automation and robotics, where the process of not only

sorting the inventory within the warehouse, but also the management and tracking of the stocks

are done in an instant and labor-free approach.

Current practices with traditional and manual methods of sorting, managing and tracking the

inventory of warehouse products does not have a systematic and standardized lead time and

associated costs with it. Employee productivity, motivation and quantity of stock to be moved or

counted are all variables that impact the speed and costs needed for the warehouse management,

which impacts the company’s ability in having a reliable estimate to factor in its budgeting [1].
 #2 Inaccuracy in Stock

Over-reliance of human knowledge may risk stock keeping and therefore inaccuracy.

Therefore, relying on human effort also impacts the accuracy of the warehouse management,

from having live updates on the stocks of each type of product stored to the timely restocking of

items that are in high demand and rapidly offloaded. This impacts the customer perception and

experience of the company because there will be long waiting time for restocking products in

demand, which ultimately affects the sales, profitability and reputation of the company. In fact,

one of the biggest problems that warehouse management faces is not having a clear, accurate and

responsive inventory management system. With manual record keeping, there is a higher chance

of human error and a late indication in reduced stock of a particular product in the warehouse.

Finding out a product requires replenishing in the warehouses, or need to transfer from the

warehouse to the retail stores too late has a direct impact on the customer experience and

perception of the company. Given the time-consuming nature of manual stock counting, the risks

include delays in supplying stores with fast-moving products, which could result in the

customers choosing an alternative brand. Financially, this also compromises the cash flow of the

company, and the need to do discounts or special offers that negatively affect the profit margins

in order to regain or retain customers [2]. Relying on manual counts and movement slows down

the reaction process of the company to any demand changes in the market and, given the highly

competitive nature of warehouse management, it is an integral component for a company to be

able to effectively, quickly and at minimum operational costs be first-to-market and proactively

catch up with latest trends. Meeting customer demands therefore directly related to how accurate

warehouse management is for both local and international markets [3].

#3 Safety
 A third limitation of the current practices in warehouses are the facilities’ safety aspects.

Despite having safety precautions in place, the nature of physical or heavy equipment usage by

the employees puts them at risk of accidents and workplace hazards. Forklifts and other

machinery have long been incorporated in warehouse management, but they pose safety risks for

the employees that can result in serious injuries and even fatalities. Warehouse management

records some of the highest frequencies and risk likelihood of loss time incidents and health

hazards to the employees as field of work [4]. The most common types of injuries are related to

the physical handling of the packages, whether they are heavy loads that could fall, sprain a body

part and injure the worker [5]. In fact, 11.3% of injuries such as accidents caused by falling,

slipping, tripping, things falling from above, forklift collisions, and exposure to hazardous

chemicals are caused in warehouses due to being in awkward postures while handling the

packages, and 8% from falling to a lower level in the warehouse [6]. Exerting physical effort in

the long run also causes chronic conditions to the employees, from exposure to loud noises that

could impair their hearing to posture and mobility conditions [7].

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