Close attention to people, processes and the warehouse environment are the keys to effectively managing a warehouse. Rob O’Byrne writes.
TO say there is any one single way in which to effectively manage a warehouse would be folly – much depends on the nature of the supply chain and of the warehouse itself.
However, there are a number of common principles that should be applied to manage any warehouse successfully.
Conversely of course, this also means there are many ways in which companies can get it wrong.
Avoiding the following seven common warehousing mistakes will ensure storage facilities don’t generate undue supply chain costs:
1) Holding excess inventory
Despite years of encouraging lean practice and inventory reduction, storing too much inventory is still one of the most common warehousing mistakes.
Wholesalers in particular, seem to find it easy to fall into this trap, often as a result of making huge purchases of a single product to take advantage of bulk quantity discounts.
Reducing inventory levels as far as possible makes a company’s supply chain leaner and leaves less money tied up in stock.
So when those “too good to turn down” discounts come along, it’s worth trying to make arrangements with suppliers to get the large orders delivered in smaller batches.
2) Not optimising picking paths
Overlooking the need to plan efficient picking paths through a warehouse will handicap picking rate.
This in turn can impact supply chain cycle times and generate unnecessary labour costs through less than optimum productivity.
Ideally, warehouse employees should be able to complete each picking run at a location close to the dispatch area in the warehouse.
It’s not always easy to create optimal picking routes, but it’s certainly worth taking the time and effort to ensure they are as efficient as possible.
3) Clinging on to paper
While companies might think their small warehousing business is better off keeping things simple, paperwork actually has the opposite effect: bogging down processes and leaving companies with the liability of delays through lost or misplaced documents.
Companies will generate more efficiency by switching to digital information storage and transmission. This doesn’t mean they have to invest in an expensive and over-complicated warehouse management system.
There are plenty of simple, yet effective workflow software applications to be had, all of which will serve a company better today than a trail of paper documents.
4) Lazy housekeeping
Messy loading docks, aisles littered with shrink-wrap, overfilled pallets – these are all symptoms of a warehouse that doesn’t get enough love.
Apart from the risk to safety, a warehouse operation without good housekeeping is a warehouse without efficiency. This kind of mess creates obstructions, restricting the smooth flow of people and goods through the warehouse.
To eliminate the build-up of mess and clutter, enforce a strict regime of housekeeping, with a certain amount of time given over to cleaning and tidying at the end of each shift.
5) Poor OHS management
Even a tidy warehouse isn’t necessarily a safe warehouse. Good OHS in a warehouse is about looking for the hidden hazards as well as the obvious ones. The problem is, as long as employees aren’t having accidents, it’s easy to get lulled into a false sense of safety.
This is a common and often regrettable mistake in warehousing, because when somebody does fall victim to an accident caused by unstable racking, for example, the consequences can be lethal.
Warehouses are inherently dangerous working environments. Getting in the habit of reporting accidents and near-misses, analysing the causes and acting to eliminate them, can certainly save costs and quite possibly save an employee from serious injury.
6) Poor goods-in processes
When the pressure is on to get customer orders moving through the warehouse and dispatched on time, the inbound side of the operation can sometimes suffer from a lack of attention.
The role of goods-in receiving is critical to effective warehousing and is an area which shouldn’t be neglected.
In order to ensure goods-in processes are efficiently maintained, utilise dedicated staff and compensate them well for their efforts.
Intake procedures can be quite specialised, so this is not an area in which to assign staff randomly.
7) Ignoring staff development
Tight budgets sometimes mean training and development activities aren’t priorities. But if a company neglects to identify development needs and provide opportunities for individual growth, high staff turnover is likely.
It costs far less to keep existing employees motivated and engaged, than it does to backfill vacated positions.
So devote time and resources to training and development, even if it means hiring temporary staff on occasion to cover during training.
If companies can avoid or take steps to prevent the seven listed mistakes, they should have a sound foundation on which to build continuous improvement efforts, without spending too much time fighting fires.
Rob O’Byrne is Group Managing Director of the Logistics Bureau.