Reliance on Data is the Key to Growing Your Business

Reliance on Data is the Key to Growing Your Business

Historically, businesses satisfied with no or slow growth used a qualitative approach to planning, evaluating, and growing their bottom lines. What worked before? What did that one person say that one time? What’s your gut feeling?

Now, as more distribution and fulfillment centers are tasked with meeting increased customer demands, including needing a more comprehensive array of products and expectations of receiving orders in two days or less, those qualitative “hunches” are leaving companies faced with ever-increasing challenges, especially around operational costs.

So, more and more of these businesses are turning to data-based solutions to make decisions and measure performance. However, they may not know where to start. That’s where we come in.

So how does data allow you to grow your business?

Locate and Eliminate Bottlenecks

The quickest place to begin dramatically increasing fulfillment throughput is identifying where your facility is experiencing suboptimal material flow. Typically, we start there in facilities that rely on too much walking – the most costly part of fulfillment. The potentially scariest misconception with the design of material flow is the thought of associating it with massive infrastructure investment. It shouldn’t be. There are solutions available – like inVia Robotics’ PickMate that can improve your team’s productivity by 10x and begin delivering a return on your investment on the first day of implementation.

But it all begins with data. The key to understanding your business needs begins with understanding your current environment, and the key to growth is using that data to make intelligent decisions about how to go about meeting your goals.

Set Benchmarks and Key Performance Indicators (KPIs)

The first step in starting a data-driven approach is the establishment of benchmarks. Without identifying standards, you don’t know what success is. If you haven’t begun collecting your data in all the focus areas for your business, you can start with industry benchmarks while you manage your data. Industry benchmarks can be found from trade associations, but you can also investigate magazines, articles, case studies, or even networking with colleagues. The key to begin is to do thoughtful, thorough research and don’t necessarily rely on what shows up on the first Google result.

When it comes to measuring one’s business, many have a misunderstanding between “metrics” and “KPIs.” Metrics track what is happening during certain intervals, while KPIs measure your metrics against your desired outcomes. But what are your desired results? Look at the points in the operation where you want to see growth or change. Is it time to ship? Warehouse capacity? Percentage of accurate shipments?

Again, the first place to begin building your benchmarks is by collecting the data. Once you have that data, you can establish your KPIs. You can’t get there overnight; it takes time. You need to think about where you see growth and change to begin. As you collect data, you can start developing KPIs to achieve your realistic, data-backed goals.

It’s all about making data-driven decisions, not intuition-based decisions.

Forecast Growth and Model Changes

Forecasting growth through KPIs is significant to businesses, and it is done by establishing data that can be measured both through repeatability and scalability. While you can forecast growth without scalable and repeatable data, it is likely to be inaccurate. Also, it may be more what you want versus what you can do.

You can play with these formulas, flows, and processes as you build something scalable and repeatable because you’re using accurate data. You can model changes and make more credible decisions that affect your business. Would you rather forecast growth based on what you want or based on anomalies that happened in the past? Or do you want to be 99.9% sure in making the decision? “We want to get to $10 million” is not forecasting; it is an arbitrary goal.

Challenge Current Processes & Equipment to Improve Productivity

Challenging the status quo can be difficult for managers, workers, and leaders. After all, the most common but dangerous phrase in any business is “we’ve always done it this way.” It takes a well-thought-out plan and confidence in that plan to help overcome hesitancy that is natural when change is presented.

By relying on a data-driven plan, one that is based on your business’s unique challenges, one that is well modeled based on your internal models and projections, you can have confidence that you can overcome those challenges that come with growth, labor challenges, and supply disruptions.

How Can We Help?

In speaking with our engineering group, we can help determine potential growth areas within your organization with our data-driven analysis of material flow. With even just a few pieces of data, we can get started because we can use our operational knowledge of available solutions to fill in any gaps. By increasing storage density, identifying opportunities to improve throughput dramatically, and seeking opportunities to reduce labor costs as your business grows. We can develop that roadmap with you.

We have in-house expertise on staff with real operational experience in designing optimal material flow, dynamic solutions in everything from conveyance to automation, technological solutions like warehouse execution systems and warehouse management systems (WES/WMS), and plenty more. Give us a call today or let us know what your needs are in this form, and we can talk about what steps you can take to solve the challenges around your unique needs.