Increasing demand for service, customer expectations around rapid delivery, and free shipping provided by online retailers have put pressure on shippers to do more, do it faster — but at the same time, keep shipping fees low. One way businesses are meeting this challenge is with space optimization solutions.
The cost of leasing or buying industrial warehouse space has increased by 25% over the past three years, according to Prologis Research. In addition, fees for shipping have shifted to a system based solely on weight to one based on the higher of two measures, weight or space. As e-commerce grows and the number of cartons shipped increases, carriers are exceeding space constraints before they reach weight constraints. Once dimensional pricing models were introduced, shipping costs rapidly increased — 42% in 2015 alone for ground parcel shipments. Complicating matters is the fact that shippers often provide inaccurate dimensions, which can lead to chargebacks and inefficiencies in shipping.
These rising costs have forced companies across the supply chain to place an increased emphasis on space optimization on the pallet, on the truck, and in the warehouse. When margins are thin and every cubic foot costs you more money, wasted space means lost profits.
Automated Dimensioning is Key
In order to better manage these changes and improve accuracy, companies are turning to automated dimensioning solutions. Manual measurement is inefficient, slow, and often inaccurate. Knowing the dimensions of every product can help optimize workflows like pallet building and picking/putaway.
Capturing accurate dimensions for every product on the truck or in the warehouse is a critical part of improving accuracy and reducing costs. Systems are now available that utilize dimensioning scanners and 3D depth-sensing technology to accurately measure objects. For example, the Honeywell AutoCube 8200 system can measure packages of any size, measure multiple items at the same time, and even detect bulges or protrusions. Intelligent dimensioning software can then be used to determine the optimal way to pack items in a carton (even items that are different sizes and shapes), and provide an accurate measurement to help determine and reconcile shipping charges.
Accurate dimensioning data also helps warehouse planners make better use of available space, predict future storage needs, and eliminate dead space in the racks/shelves so that merchandise doesn’t have to clutter up the receiving or shipping area.
In transportation, space optimization technology will help get more products onto a truck by providing an accurate view of dimensional weight when scanner and scale data are combined. It also provides shippers with the ability to give customers actual shipping costs rather than estimates.
Better managing the flow of inventory in and out of the warehouse with space optimization can also lower the cost of holding goods in a warehouse. For companies with limited budgets or that are geographically constrained and unable to expand existing warehouses or build new ones, space optimization also provides a way to do more with existing resources while still expanding warehouse/shipping capacity.
The Solution is More than Technology Alone
Dimensioning alone won’t fully optimize warehouse or truck space, however. The technology should be combined with strategies like smart slotting (storage based on the velocity of specific goods), dedicated pick lanes, full utilization of vertical space, intelligent transportation management software, and other approaches.
Moving forward, space optimization will continue to be a priority as customer demands and the price of warehouse/transportation space increase. For more information on how your business can operate more efficiently and save money with space optimization technology, contact omniQ.