Distributors trying to prevent warehouse mistakes resulting in lost sales and customers need to go beyond evaluating procedures, controls and forms.
It’s necessary to “think out of the box,” so to speak. The same broader thinking is needed for increasing warehouse productivity, which can compensate for the inability to hire.
Here are three situations where out of the box thinking helped clients reduce mistakes and/or increase productivity. The recommendations for each situation come from the use of an extensive checklist that evaluates warehouse operations and management, as well as from observing activities and discussing the problems with management and warehouse workers.
For one distributor, the only CDC is at headquarters, and it is used to supply the branches with almost everything they stock and sell; the CDC also serves local customers via counter sales and deliveries. In the CDC, supplying the branches is more time-consuming than serving customers.
One branch’s replenishment volume is very high; it is almost as large as the unit volume of customer sales at headquarters. Supplying that one branch accounted for 20% or more of the CDC activity (receiving, put-away, picking, packing and loading).
In order to reduce the labor effort at this company’s CDC, the branch should be supplied directly by manufacturers, which would, in turn, reduce the pressure that results in mistakes. To implement this recommendation, management needs to determine which items are being replenished in high volume. Management then should work with suppliers to make sure the largest-volume items ship directly to that branch, which will reduce much of the pressure and mistakes at the CDC; direct-ships of other high-volume items are in the process of being arranged.
Another client also has a CDC only at headquarters. It supplies the company’s branches, but also serves local customers via counter sales and deliveries. In talking with pickers about the high level of mistakes, it was clear that mistakes were occurring most often because almost all the picking was concentrated in a short time span.
The VP of operations conducted an analysis of the number of orders that really had to be picked in the short time span to avoid possible extra paperwork. He found the answer to be about 30%, which meant 70% could be picked over a much longer time span — but it is not known in advance which orders could involve extra paperwork. So now, all orders are picked over a much longer time span, which reduced the crunch and level of mistakes, and justified the extra paperwork.
The third distributor also had only one CDC at its headquarters that was responsible for supplying local branches and serving local customers through counters and deliveries. The aisle of this warehouse had a lot of yellow packaging and wrapping, faded felt-tip markings and printed descriptions. Many of the slow moving items were stored near the packing and loading area where the fast-moving items should be stored.
The owner had a printout of items that had not sold in years, which were being stored throughout the warehouse in various places. The owner pointed out fast-moving items were stored far from the bays meant for those types of products because those locations were filled with slow/no movers.
This storage pattern meant that warehouse personnel putting things away or picking products up were wasting time walking much further than if items were really stored by velocity; causing mistakes by rushing to pick items in time to load trucks.
The solution here is to not have slow movers stored in the fast-moving areas, and adjacent areas should be donated or discarded. Fast movers stored further away can now be relocated to the space the slow movers were previously occupying. The owner proceeded to implement this recommendation, starting with the items that had not moved for many, many years.
Thinking outside of the box can determine the root causes of warehouse mistakes and substandard productivity. This approach complements a detailed evaluation of procedures, controls and forms.