What lessons warehouses could learn from airline companies

In recent years, the role of warehousing in a well-designed supply chain strategy became more important. Key indicators to measure the impact of the warehouse strategy are: execution time of orders, minimizing the number of out of stocks and operating as efficiently as possible. Commercial airline companies are also familiar with these KPI’s.

So warehousing and aviation have a lot in common. Both are sending goods (or persons in the case of the airline) from one place to another.  Both do a consolidation of goods or passengers before they reach out to the final destination.

Another similarity is the use of value added services. For example: business class or economy class, priority or normal boarding, additional luggage, entrance to the lounge, … .

What are the best practices we could see in the commercial aviation industry, that could be adopted by warehouses to perform as best-in-class?

people-sign-traveling

Short time between 2 stops

Statista data is showing that Southwest airlines has a market share of 20% in the US airline market and is one of the biggest airlines in the world. By offering low priced tickets they were able to gain customer base and start growing. A crucial factor to lower ticket prices is the efficient use of the aircraft fleet. In the air a plane is making money for the company, so short transit times at an airport are crucial in this pricing strategy. If airport time between 2 flights is minimized, airline companies can use the same plane more efficiently. It can make more money by doing an extra flight a day. Just like a warehouse environment, picking times between 2 orders need to be minimized. Therefore the warehouse layout needs to be optimized to accomplish this goal.

Use your resources as optimally as possible

Take a look at the inside of the aircraft, we see that higher load factors leads to higher profitability. More available seats in an airplane mean a lower fixed cost per on-board passenger. Airline companies are facing high fixed costs (investment of the aircraft, landing rights, fuel etc.) just as warehouses (area of the building, storage equipment, material handling, etc.). 

Airline Load Factor

 

In a warehouse your load factor is the use of the available volume of your building as efficiently as possible and storing more SKU’s per m³/ft³.

Warehouse Load Factor

 

Try to implement these lessons in your warehouse operations and you’re able to reach for the sky 😉

 

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