Yard operations at a warehouse facility is an unsung hero, so to speak, of the supply chain. It’s a real workhorse tasked with making sure various transportation assets – trucks, trailers, chassis, and pallets – are where they’re supposed to be when needed.
Consider for a moment the impact of a warehouse with a poorly run, inefficient yard operations team. Incoming trucks and drivers aren’t told which bay they’ve been assigned – before or at arrival at the gate – delaying receipt of goods into inventory and making orders late.
From a green perspective, increased dwell time at the gate or in the yard means idling engines puffing out CO2. This harms the atmosphere and threatens to put the company into noncompliance with growing environmental regulations, in addition to its own sustainability initiative.
This problem also dominoes into the company’s ledgers. Costs pile up as yard workers waste time locating misplaced assets. It also leads to lost business, as unhappy customers jump ship when their orders arrive late. Put broadly, inefficient yard operations lead to delays, resource wastage, and a swollen carbon footprint, underscoring the multifaceted costs.
The Consequences of Inefficiency: Financial, Operational, Environmental
Recognizing the toll of inefficiency in yard operations is the first step toward optimizing logistics to enhance performance, sustainability, and overall excellence. The consequences fall into three categories: financial, operational, and environmental.
Financial
One effect of transit delays caused by inefficient yard operations is a financial one. This leads to increased transportation costs as companies rely more heavily on the greater expense of expedited shipping to make up for delays.
The labor costs associated with resolving yard congestion, inefficient routing and misplaced assets affect the overall cost structure of the warehouse.
Excess fuel consumption, as well as the opportunity cost of a dip in productivity due to inefficiencies, all impact the company’s performance and financial well-being.
Operational
As inefficient yard operations slow down the movement of goods within a warehouse facility, it dampens order throughput. Productivity targets are missed, orders are late, customers are disappointed and fees and penalties can occur for running afoul of SLA/contract terms.
Errors in tracking and order accuracy are another issue. When yard operations are congested, goods are stranded in the warehouse instead of shipped out. This keeps inventory on the books longer, tying up working capital and available space, and leading to additional inventory management costs.
Without real-time information, supply chain planning and coordination are negatively impacted. It becomes more challenging to optimize delivery routes, and resources are not allocated properly, causing disruptions.
Environmental
Inefficient yard operations contribute to longer dwell times, meaning more truck idling and unnecessary vehicle emissions. This affects a company’s sustainability goals and could also lead to increased costs associated with carbon offset initiatives or noncompliance with environmental regulations.
In California, operators of larger warehouses are now responsible for managing and monitoring vehicle emissions from third-party carriers coming in and out of their facility. Resource overconsumption is another issue, chiefly fuel usage.
Other Effects of Yard Mismanagement
While it’s easy to pinpoint the precise cost of a particular mishap in yard operations, it’s more difficult to develop an appreciation of the broader effects on the supply chain. The yard then becomes a chokepoint for overall operations and the flow of goods, and inefficiency here has far-reaching consequences.
Here are some second-level effects that occur when yard operations are below optimal efficiency:
Customer dissatisfaction: When goods aren’t flowing through a yard in a timely manner, the start of their journey by various road and rail modes is delayed. This leads to missed delivery windows, angering customers who will often move on.
Poor visibility: A lack of real-time information caused by mismanaged yard operations can hinder coordination and planning across the supply chain. Resources are not allocated properly, causing disruptions.
Reputational damage: Consistently poor yard operations affect a company’s ability to attract and retain customers and business partners. Negative feedback from customers or supply chain partners can have long-term financial consequences.
Facing Yard Operations Inefficiency, Warehouse Operators Turn to Technology
Fortunately, advanced technology can help warehouse operators address these issues and make their yard operations more efficient and cost-effective. Systems built on artificial intelligence (AI) are revolutionizing yard management processes, enabling real-time visibility, predictive analytics, and streamlined processes. Here are some ways AI-based technology is changing the game in yard management.
Automated Yard Operations
Advanced AI-based systems leverage existing infrastructure, such as security cameras to automate and optimize yard operations, from the gate to the loading docks. Capturing dozens of vehicle elements via optical character recognition using synced cameras speeds up identification and verification for quick entrance authorization at the gate. All yard assets are automatically tracked and managed, making location and access quicker and smoother.
These systems complement a yard management system (YMS), offering comprehensive, real-time updates. They also work hand in glove with warehouse management systems (WMS) and transportation management systems (TMS), helping optimize inventory and transportation management. These capabilities reduce manual errors, enhance efficiency, and contribute to overall supply chain optimization.
Cost Savings
Companies realize cost savings through improved efficiencies in transportation management. With the improved flow of trucks and trailers, vehicles are quickly routed to the proper dock for loading and out again. This keeps the shipment schedule on track, reducing the need for costly expedited delivery.
Advanced AI systems, with their ability to accurately maintain exact location data on every truck, trailer, and chassis, enable high efficiency in locating and pulling assets into use. This reduces costs associated with both increased staffing and inaccuracies.
Shorter truck dwell times as gate traffic flows more smoothly means less fuel consumption. AI-enhanced yard operations can also improve productivity and throughput metrics, as delays due to inbound inventory waiting in trailers or outbound orders sitting at the docks are reduced.
More Eco-Friendly Operations
Anyone who has sat in highway traffic among swarms of tractor-trailers can attest to the effect of many idling engines, and the same is true of gates at warehouse facilities. This is why California has made owners of larger facilities responsible for emissions from indirect sources, i.e., third-party carrier vehicles.
AI-based yard operations systems significantly reduce this effect by allowing warehouse operators to reduce truck emissions as idling time is reduced through automated data capture, speeding up vehicle validation and the gate clearance process. Vehicle tracking and reporting also help ensure regulatory compliance.
Yard Operations Efficiency Is Challenging, But AI Technology Can Boost Performance
With yard operations such a critical link in the supply chain, inefficiencies leading to delays in the movement of goods have a domino effect. Orders are delayed, carrier pickup and delivery windows are missed, fees are incurred, inventory costs rise, customers are disappointed, and partnership agreements are stretched to the breaking point.
As it has in so many other spheres of business, the power of AI technology has been tapped to deliver measurable results in yard and warehouse operations. It’s now possible to improve the overall orchestration of all yard assets through faster identification and verification of arriving vehicles while providing access to real-time location data for improved flow and inventory accuracy.
To see how leveraging this state-of-the-art capability is within your grasp, reach out today to EAIGLE and request a demo.