Managing an efficient and effective warehouse requires seamless workflows and timely execution from dock to dock. Here is a comprehensive overview of common mistakes and solutions for a more profitable distribution center.
Mistakes in Warehouse Management
Those bulk deals that offer the “too good to pass up” discounts many times should be left alone. The excess inventory, especially of one SKU, ties up valuable space and money. This SKU may sit for months or longer at a time when other products are in demand. Work with the suppliers to arrange smaller shipments to better meet the demands thereby freeing up space and money for the “in season” SKU’s.
Letting your Receiving Department Slide
The stress of getting orders moved from intake to outbound during a rush can overwhelm all employees. A common area that is neglected is the inbound (receiving) department. “Let’s get these goods moving” is a common statement from managers, and the receivers feel the pressure to get the goods in and in the hands of pickers. The mistakes that happen in inventory and accuracy are a result of shortcuts.
Ensure that all procedures are followed from dock to dock. A common approach is to cross-train some employees to cover the receiving department in situations such as call-outs and peak times.
Inefficient Picking Paths
Are your picking paths criss-crossing areas of the warehouse? Are the products that are highest in demand centrally located to the dispatching areas? As simple and basic as this sounds, many warehouse managers fail to recognize how inefficient the paths are for the pickers, and this creates frustration on all levels. Look at your most popular SKU’s and how much labor is being wasted traveling the warehouse to pick. If you have two SKU’s that are commonly ordered together, should they not be binned next to each other if possible?
Improper Time Dedication to Cleaning
Warehouse work entails the use of materials that can quickly clutter the workplace. When dealing with pallets, shrink-wrap, labels, and damaged goods, it only takes a busy shift and lack of attention to detail to create a cluttered floor. This in turn puts an increased workload on the following shift, and labor dollars are spent unnecessarily. Efficient warehouse operations dedicate time each shift to cleanup and stress the importance of working smarter, not harder.
Resting on your Laurels in Regards to Safety
Complacency often sets in when a period of time goes by with no reported accidents. It is easy to feel a sense of security knowing your warehouse is clean and tidy with no accidents in recent memory. This is a dangerous trap. The nature of warehouse work brings with it potentially fatal consequences when complacency sets in. Are the “near misses” being reported? Are there checks and balances in place to ensure the racks are secure?
Insufficient Training and Development
What is the most important asset to any organization? The people that make it happen. The most successful quarterbacks in the NFL are quick to recognize their teammates after a victory, deflecting the personal recognition. If your warehouse wants high turnover, then a certain recipe for this is ignoring the needs of your team. Then you will be left with the time and costs involved with hiring and training, nevermind the lost revenue due to falling behind on orders.
Mixing Multiple SKU’s in a Single Bin
While it may seem to be a way to save on space, in reality time and accuracy suffers when placing multiple SKU’s in a single bin. The picker has to sort through multiple items to find the ordered item, wasting upwards of 15 seconds. When the rush is on, this leads to mispicks.
Each SKU should have a unique bin location. This ensures accuracy and efficiency in picking.
Clinging to Manual Data Entry Processes
It is disturbing to know that there are numerous warehouse managers who still cling to the notion that it is ok to have someone manually entering SKU’s as they pick and pull. Equally disturbing is the fact that employees in various departments still manually enter inventory data. This is an antiquated course to take in 2017. Technology is your friend, use accordingly and see the benefits next.
Best Practices in Warehouse Management
Utilizing Automatic Data Collection
As mentioned above (#8), any warehouse employees spending time writing numbers down or manually keying SKU’s and relevant data is a waste of time and resources. With barcode and radio frequency identification taking over warehouse operations, regardless of your organization's size now is the time to take advantage of technological advancements. Expect increased efficiency and effectiveness, with lower labor costs and more accurate order fulfillment.
Bin Locations to Locate SKU’s
The software packages that are available today for warehouse management utilyze bin locations. This enables all warehouse employees to quickly find the necessary items to pick and pull for efficient order fulfillment. The standard has been to categorize items based on vendor lines. Now you can organize inventory based on sales volume thereby improving your picking process eliminating unnecessary steps.
An added benefit of utilizing bin locations is the speed in training new hires. No longer will you have to search for those experienced with particular vendors, as the bin locations can be mapped out and the new hire can be off and running in a few short hours. If peak seasons require the hiring of temporary workers, you can rest assured that they can find the products easier with this in place.
Advanced Shipping Notifications in Place
Having a regular shipment schedule may seem convenient for the receiving department, yet this is only a half-truth. Disruptions are commonplace in logistics; be it weather related, out of stocks, or traffic delays. With a reliance only on regular shipment days and times, staffing is scheduled accordingly. Then, when the inevitable delay or cancellation happens management is left scrambling. Work with all parties involved to implement advanced shipping notifications to better schedule staff and inventory levels. The workflow throughout the warehouse can better be managed as a result.
Improved Information Visibility
Are critical employees able to access vital information in a timely fashion? Is your receiving department able to access inbound shipment manifests far enough in advance to properly prepare? An information system that distributes timely and enables ease of access company wide will empower each department, and subsequently key employees, to better perform their job responsibilities.
Specialized Returns Process
A hindrance to any warehouse operation is the time costly returns. With the variations in how they are handled (i.e. chargebacks, discarded goods, credits), a specialized returns system will streamline this portion of the operation.
Critical Floor Space Analysis
The majority of companies who believe they need another warehouse, or need to expand an existing one, are not using the existing space efficiently. Vertical space is often left unused. The shelving options that exist should be explored before capital is invested in expansion that may be unnecessary.
Supply Chain Management
An accurate tracking of inventory during all stages of its cycle is critical to efficient operations. In particular for the manufacturing sector, as one glitch in inventory controls can halt the manufacturing of a product. This goes hand in hand with information visibility (#12), as a product on an assembly line may require X number of component A. Is each department able to access inventory levels, and are we ensuring these inventory levels are accurate?
Regularly Scheduled Cycle Counts
Are we relying only on our annual inventory count? This is dangerous as discrepancies happen. By enacting at minimum a quarterly cycle count you will be better armed to investigate discrepancies. This will ensure less out of stocks and unsuspected surprises.
Are you only interested in what a SKU costs? This is a closed-minded approach. SKU profiling will place profit information at your fingertips, thereby enabling you to better stock each SKU. It’s location and quantity on hand can be better managed for the betterment of the company as a whole as well as your distribution center. With the overall company’s profit line in mind, your warehouse can improve in capacity and efficiency.
Communication is the key to any relationship, and this is certainly the case with vendors. They are our lifeline. Keeping the vendors up to speed on upcoming promotions, any quality issues that have been raised, and maintaining an open-mind to any issues that occur on the vendor’s side will ensure a durable relationship over the long term.
Tackle Tasks Now
When that large shipment comes in, it is only natural to want to stash it “out of sight, out of mind”. This is known as procrastination, and it leads to more unnecessary work. Take on each challenge as it enters the door. By taking some form of action on each task, this creates a “Can do” attitude that is contagious in each department.
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