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Have You Adjusted Your Warehouse to The New Normal?


Warehouse walkthrough

At some distributorships, lower warehouse staffing continues to result in mistakes that are costly to correct and anger customers; or worse, result in loss of sales or customers. But few distributors want to spend much money to prevent the mistakes. Nor does a lot of money need to be spent to adjust for the new normal. Today, inventory levels have crept up, but warehouse staffing levels remain historically low. 


For example in the USA, when sales decreased to the lowest level in decades – to the so called "new normal" - most distributors reduced warehouse staffing and the level of inventory. Here are some tips for adjusting.

The Warehouse Environment

Cliché that still matters: a place for everything, and everything in its place. A messy, disorganized warehouse encourages warehouse employees to be messy and disorganized, which results in costly mistakes and lower productivity. In this new normal, there should be free time to keep a warehouse clean and organized. So once a month, after everyone else has left the building, the warehouse manager should walk through with a clipboard in hand. Note litter and debris that should have been cleaned up, items stored in a messy fashion, received items that are on the floor but should have already been put away, items pulled for delivery but not stored in designated staging areas, etc. Then talk with colleagues about using free time to straighten up and prevent future problems like these.

Storage Pattern

The way in which items are stored can have a major impact on warehouse productivity (cost) and accuracy (customer service and cost).

warehouse_organised

With rare exceptions, no one storage pattern can result in high productivity and high storage density and a low rate of mistakes. It’s a trade-off. The pattern(s) that was right for the boom times may no longer be right for the new normal. Based on the recent history of item velocities, and an estimate of future velocities, determine if the current storage pattern(s) is (are) the right one(s) for making the trade off. But before moving items to new storage locations, project resulting savings of effort over a few years, and then determine if those savings would justify the effort it would take to move the items to new storage locations.

DOWNLOAD OUR GUIDE TO GOOD FACTORY PLANNING HERE

Receiving

Mistakes made here "flow downstream" and are often not detected until items are packed or loaded; sometimes, not until customers receive the wrong items/quantities. 

barcode-for-inventory-control

In every warehouse, receiving personnel proof packing list data against the corresponding PO data, but not all distributors check the physical receipt against the PO data unless data on the vendor’s packing list differs from PO data. This mistake can result in customers not getting the quantities they ordered, or not getting the items at all. In the new normal, vendors too have reduced staff, so they are making more shipping mistakes. The warehouse manager should inform the people who do receiving to not hesitate to open shrink wrap and count what has actually been received; spot check if time does not allow for a 100% check.

Another error which can be made during receiving, is not having clear drop-off and pick-up points. If the team member who normally overseas the drop-off has left the building for a lunch break, is it clearly marked (to new drivers and staff members) where receivables happen? More often than you think, shipments can be 'lost' for a short period while warehouse staff try to locate a shipment which was left in the wrong area of the warehouse. Barrier equipment such as guardrail and bollards can be very useful for clearly marking receivables areas and sectioning off 'no-go' areas.

Poly Flexible Bollards Video

Put Away

In periods where warehouses are downsizing or going through a period where long term staff have left, employers may choose to hire, typically, less-expensive, inexperienced people, and that has caused warehouse problems. messy-warehouse

As with Receiving, mistakes made during put away "flow downstream", etc. The most frequent mistake is failing to "quickly" put away items. One result is that many computer systems show that items/quantities are available to pick, but when a picker goes to pick, there isn’t enough, if any. And the picker may not know how to use a terminal - or have the time to use one - to determine if there was a recent receipt that has not been put away. One way to minimize this problem is to get the computer system to highlight (on a list or display) those items for which customers are waiting or for which the quantity on hand is below the reorder point or Min.

Picking

At distributors where the computer system allocates inventory to specific customer orders, a frequent "mistake" made by pickers - especially new ones - is ignoring the computer-determined "quantity to pick", and instead picking the quantity ordered. Whenever the warehouse manager briefs pickers about other issues, he/she should remind them to pick only the quantity shown to pick.

Another reason for picking (and other kinds of) mistakes, and for lower picking productivity, is unknowledgeable pickers - people who do not recognize that they are picking the wrong items/quantity. Take the time to educate the new personnel about the items stocked as this saves a lot of your time (and helps to avoid costly mistakes) later on.

Packing

The most frequent type of mistake made during packing - especially when a truck is waiting for an order -- is assuming that the quantities being packed/staged are the same as those shown on the corresponding pick ticket or packing list. 

safety_education

Compounding that mistake is the use of pickers to do the packing – which low levels of staffing often necessitates Whenever the warehouse manager briefs packing personnel about other issues, remind them that before they shrink wrap or load, they should count the quantities being packed/staged, and verify them against the packing list (or pick ticket if a packing list is not involved). If time and staging patterns preclude a 100% check, do a spot check. Remember - as much as technology assists us hugely, it is not always 100% accurate and mistakes can and do happen (often due to the user). It's always worth taking the time to double check!

Loading and Shipping/Delivering

Even when thorough counting is done during packing, a frequent mistake - again, especially when a truck is waiting and due to a smaller warehouse crew - is failing to verify that every item on each order has been loaded, and loaded on the designated truck. If time is available, the warehouse manager should ensure that item-level verification is done for each order, and done on the truck that will deliver the order being verified. If time is tight, spot check trucks and orders.

DOWNLOAD OUR GUIDE TO OPTIMISING FORKLIFT SAFETY HERE

Counting

The most frequent mistake isn’t made during the counting, it’s when discrepancies are discovered. computer_errorA thorough investigation of discrepancies is too often not made before changing quantity-data in the system. Before any quantity on hand is changed, someone other than the counter should first examine the inventory transaction history and sales history of each discrepant item. Perhaps the data will provide a clue about a discrepancy. Then, if needed, look in warehouse areas for "missing" items. And any adjustments to data should be made only by personnel very experienced in using the system to make such changes. As mentioned previously, usually system discrepancies can be due to user-error rather than technological error.

Warehouse Management

One way to attack the problems described above, is for the warehouse manager to hold a weekly meeting to discuss the prior week's warehouse mistakes, determine the cause(s), and define preventive measures that will result in happier customers and lower warehouse operating costs. This should be in addition to the on-the-spot reminders mentioned above. Encourage personnel to describe problems and suggest solutions.

Living with the new normal does not mean that warehouse performance has to be less than customers expect. Most of the recommendations in this article can be implemented quickly and cost nothing.

Good Factory Planning Guide

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 *All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. 

What can you do to increase profitability and efficiency? Check out our free resources comparing a Compact Sectional Door:

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Topics: warehouse profitability, warehouse managers, warehouse accidents, warehouse mishaps, receivables, warehouse normal, the new normal

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