Fifteen years ago, when mentioning warehouses, one would envision places filled with goods, dusty and far from the city center. Warehouse managers at that time were often referred to as storekeepers, implying individuals responsible for overseeing goods in the warehouse, ensuring safe storage, and preventing losses. These storekeepers performed tasks such as inventory counting, sorting, and inventory management primarily relying on memory and experience. It was not surprising to find storekeepers who could accurately remember hundreds of product codes and identify them quickly with just a glance. However, their reliance on experience and memory became a hindrance when these "warehouse managers" were unexpectedly absent. Goods were misplaced, their identification became challenging, and the entire process of inbound and outbound activities came to a standstill. The saying "the storekeeper is more important than the warehouse manager" emerged from such situations.
Today, the requirements for warehouse management have changed significantly. The volume of orders has increased, product catalogs have become more diverse and complex. The narrative of a warehouse handling thousands, even hundreds of thousands of orders per day has become quite normal. Alongside traditional warehouses, modern distribution centers with standardized quality, located on the outskirts of cities, have multiplied. Activities within these centers involve not only regular inbound and outbound processes but also value-added services, such as order picking, handling returns, and product serial management. All these operations demand detailed management through information technology solutions and strict control adhering to safety standards (fire safety, operational safety, environmental safety, health, etc.). Invisible as they may be, these requirements force today's warehouse managers to truly change their mindset and working skills.

1. Master and Improve Warehouse Operation Processes

     Standard Operating Procedures (SOPs) are written to describe all the steps required in the inbound and outbound activities and inventory management. Mastering all these processes is the fundamental task of a warehouse manager. SOPs form the basis for Warehouse Managers/Distribution Center Managers to monitor and ensure smooth, sequential, and consistent operational activities. SOPs are also crucial documents (alongside Work Instructions or WIs) that warehouse managers regularly use to train new employees. Ensuring that all warehouse personnel understand and adhere to a unified SOP system helps prevent workflow redundancies, avoids random positioning of goods in the warehouse, and overall enhances operational efficiency and productivity.
In addition to mastering SOPs and ensuring operational teams adhere to them, continuous improvement activities, meaning being ready for changes to adjust existing processes, are equally important. This flexibility is crucial for warehouses to meet new customer requirements and represents a core difference in the mindset of the new generation warehouse manager. "Agile" is likely the key term succinctly describing the profile of today's Warehouse Managers/Distribution Center Managers – always exploring, thinking to improve performance through continuous improvements and necessary adjustments. These improvements or adjustments do not happen spontaneously and chaotically; they are reviewed, applied uniformly, and organized. In simple terms, warehouse managers will research, update all changes in the SOP, conduct training, and guide the entire operational team to ensure everyone understands correctly and sufficiently. This ensures that the implementation of improvements is carried out uniformly, avoiding confusion and overlapping with established procedures.

2. Inventory Management & Asset Management in Warehousing

     Inventory is the backbone of a warehouse, and inventory management is a crucial task for a professional warehouse manager. Essentially, inventory management needs to ensure that operations are conducted in control to avoid inventory discrepancies. Defining inventory discrepancies should also adapt to new standards, encompassing not only accurate overall quantities per SKU in the warehouse but also precision in terms of Lot/Batch and accuracy at each storage location. Misalignment in inventory locations can significantly impact picking efficiency and result in resource wastage. Incorrect Lot/Batch management may lead to the risk of expired goods, compromising the quality of delivered products and affecting the reputation of the business.
 
In addition to managing goods inventory, modern warehouses are equipped with various operational assets, either leased or invested. These assets may include storage racks, forklifts (MHEs), charging stations, pallets, Wi-Fi broadcasting devices, RF scanners, computers, consumables (cables, stretch film, tape, empty cartons), and more. Proper and transparent management of these assets, preventing losses, poses significant challenges for warehouse managers. Alongside ensuring accurate asset quantities, regular checks, maintenance, and ensuring optimal performance become integral tasks.

3. Proficiency in Using Warehouse Management System (WMS), Data Mining, and Processing

     Warehouse operations have become increasingly complex, and traditional tools like Excel, Word, and Access reveal limitations and are no longer sufficient. Data volumes in large warehouses can reach millions of transactions per day, requiring detailed tracking of goods attributes (Lottable) and handling operations (Receipt, Internal Moving, Picking, Packing, Dispatching & Internal Transfer). The use of Warehouse Management Systems (WMS) becomes essential in optimizing productivity through storage and picking strategies. With WMS and well-implemented operational processes, the notion of "the warehouse manager knows better than the warehouse staff" is diminishing. Warehouse operations no longer depend on individual knowledge. Detailed data on pallets and storage locations are available, barcodes and RF scanners facilitate product identification, and the manager's role involves mastering WMS processes to handle daily tasks such as running reports, checking inventory status, training new staff, etc. Understanding WMS allows warehouse managers to proactively apply system configurations and features to quickly and accurately meet new customer requirements, optimizing processes and enhancing flexibility in a challenging business environment.
 
     Moreover, using WMS implies that the business can record comprehensive data on warehouse activities. Today, it's widely accepted that data is a valuable asset when utilized correctly. Modern warehouse managers are individuals who know how to leverage data from the system to ensure goods are handled efficiently (fast, accurate, low cost) while maintaining integrity and transparency in information. Using data, warehouse managers can assess warehouse health through analyzing indicators like inventory levels, inbound/outbound productivity, and expiring or nearly expired goods. Large datasets also aid in predicting order trends (customer ordering habits) and classifying handling speeds for different product types (slow-moving, normal-moving, fast-moving). This data forms the basis for decisions on rearranging storage positions, adjusting storage strategies, and optimizing order picking. It's not surprising that many warehouse managers today are proficient in querying, processing, and simulating data using tools like SQL, Python, R, VBA Macro, Power BI, Google Studio, and Tableau. These tools have proven to be effective in systematically, accurately, visually, logically, and timely managing the increasingly complex and variable operations in warehouses.

4. Communication and Team Management, Team Development

     Not only currently but at any stage, communication, management, and team development are always crucial and particularly challenging for young professionals. In new distribution centers, it's not uncommon to find young warehouse managers from the late 80s to early 90s generation. The most noticeable pressure is effective multi-stakeholder communication. Warehouse managers daily interact and work with a diverse team, including warehouse workers, inventory checkers, loaders, forklift drivers, truck drivers, and higher-level personnel such as Sales Managers, Procurement Managers, Directors, and even customers. At this point, flexible communication skills are essential. For example, a warehouse manager might waste their time trying to elaborate and explain an issue in English to the direct operations team but may appear unprofessional when presenting to clients and partners without prepared presentation slides or supporting data files. Clearly defining the audience, approaching with the appropriate style, and using suitable language are prerequisites for successful communication.
The second challenge is the management and development of the operational team. Warehouse managers need to understand the skills and capabilities of each team member to allocate tasks reasonably. Alongside task delegation, regular supervision, organizing new training, and monthly or quarterly retraining for personnel are essential. This ensures that warehouse staff understand the work processes and coordinate efficiently. Furthermore, warehouse managers need to establish transparent, clear, and fair reward and punishment mechanisms that emphasize the core element in warehouse operations: discipline. Additionally, there should be frequent initiatives to encourage creativity, enabling employees to actively propose new ideas to improve operational efficiency.

Picture: Groups of warehouse manager of CJ Gemadept Logistics
 

5. Cost Control

     From a financial perspective, a warehouse, or logistics in general, is considered a "Cost Center." Controlling and optimizing warehouse costs will enhance business production efficiency and increase profitability. In terms of classification, we can divide costs in warehouse operations into two types:
- Fixed costs: Fixed costs are stable and do not fluctuate with production volume. Examples of fixed costs in warehouses include depreciation of fixed assets, rack system depreciation, RF scanner and equipment depreciation, monthly personnel costs within the organizational structure, and other depreciations.
- Variable costs: Variable costs fluctuate with operational volume. Common variable costs in warehouses include outsourced labor costs, overtime (OT) costs, forklift rental, pallet costs, consumable material costs, sanitation, security, electricity, water, etc.
 
The primary task for warehouse managers is to control variable costs, continuously provide improvement ideas to continuously enhance cost per unit in and out. To achieve this, warehouse managers need to understand the structure of costs in their managed warehouse, closely monitor monthly costs and take immediate actions to cut any unexpectedly increased expenses.
Regarding fixed costs, warehouse managers also need to have a balanced and adjustable plan quarterly and annually. To expand operational capacity and better serve increasing demands, warehouses require infrastructure investment, resulting in additional fixed costs. Warehouse managers need detailed calculations, investment and selection plans, proposing suitable investment times to optimize asset utilization. In this case, skills in data analysis, financial understanding, and operational experience become crucial and genuinely have room for application.

6. Risk Management and Flexible Response

     In the current dynamic business environment, risk management is crucial. Especially in warehouse operations, businesses often face risks such as diseases, labor shortages, natural disasters, and particularly fire risks. Unfortunate fire incidents in warehouses and factories have recently highlighted the need for warehouse managers to be well-versed in fire prevention and firefighting, consistently checking and urging compliance with safety regulations. Any fire incident results in significant material and reputational damage for the business.
 
Concerning the risk of diseases, Covid is one of the most classic examples. Natural disasters and disease outbreaks often cause warehouses to cease operations. Warehouse managers need to prepare plans for each scenario, organize communication, train operational teams, avoid confusion and chaos when risks actually occur.
 
Additionally, for warehouses applying WMS and ICT solutions, special attention should be given to cybersecurity. Information system disasters can have particularly severe consequences and disrupt operational activities. Warehouse managers need to equip themselves with knowledge of Cyber Security, continually communicate with employees (especially those with daily access to the system) to understand and strictly adhere to safety standards. Alongside that, warehouse managers need to prepare operational manual plans to prevent cases of system downtime for an extended period. Allocating the entire operational team to practice quick reaction scenarios when facing cyber-attacks is crucial.
There are many other risks that can occur in warehouse operations that this article has not addressed. Above all, new-generation warehouse managers need to continuously update their knowledge, enhance their flexibility and problem-solving abilities. Always be ready to face changes and unforeseeable challenges, leverage skills and experience to ensure smooth and stable operations.
 
Source: TEBS Department - CJ Gemadept Logistics