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The Invisible Inventory - What's Missing in Your Warehouse Management


I often see areas of inventory which have no visibility in a system due to poor processes. For example, inbound goods sitting in trucks is very common.  When a formal receiving schedule does not exist, it is easy to get variances in arrival times. Consider these scenarios when inventory can become invisible:

Dock Squeeze

Twenty trucks showing up at the same time is a problem, and if there are only ten docks available at that building, the other ten trucks can be left idling and parked for hours which wastes time, and fuel. Drivers lose patience which puts a strain on morale in a marketplace already short drivers.  Also, the inventory sitting outside in trucks for hours increases the Cash Conversion Cycle.

What is the 'Cash Conversion Cycle - CCC'

The cash conversion cycle (CCC) is a metric that expresses the length of time, in days, that it takes for a company to convert resource inputs into cash flows.

Inventory Sitting on the Dock

Goods sitting on the dock waiting to be received can also pile up due to poor processes. Wasted motion, extra handling, paperwork, waiting, poor worker utilization, workforce shortages, and the lack of standards all increase dock to stock times.  Industry averages show most companies need eight hours or a full shift to receive and slot a load properly. By lowering dock to stock times, that inventory is available for sale faster.

Returned Goods

Returned goods get even less attention in some companies with no formal process leaving customers expecting speedy processing disappointed and looking for alternatives.  How you handle post-sale customer service says a lot about who you are as a company.

The Lost Scanner

Lastly, the common data collection devices (scanners) needed for speedy processing get lost when they have no formal home, check out procedure, or device management software.   People take the scanners, share or lose them, and the lost scanner holds up operations. Manufacturers can remedy this with software which makes it very easy to locate these devices using your wireless infrastructure.

There are opportunities to get better results if you improve your flow in and out of your building with better processes. Add visibility to the invisible inventory can consider it as large piles of cash.

Process Driven Warehouse Module

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Topics: Inventory Control Warehouse Cash Flow