With the fast growth of the warehousing industry, more and more warehouses are being built everyday, with new challenges that come with the changing landscape. From efficient storage to worker productivity and safety, warehouse managers need to keep an eye over numerous factors to run a sound operation.
To help meet these needs, we’ve compiled some valuable tips from professionals for various areas in warehouse management, including facility upkeep, inventory tracking, employee satisfaction and operations trends.
Smart Space, Not More Space
Matt Grierson, managing director at Dexion, an industrial and commercial storage solution firm, says most of his clients believe they need more space when they already have the extra space. They just don’t know how to use it:
“Inefficiency just happens. You start with a big empty shell that’s high and deep and you slowly begin to fill it as your company grows. Most of the company’s efforts are concentrated on generating sales, naturally, and the warehouse gets forgotten. Before long, your warehouse is full, but it’s wasted space and you’ve got a lot of unused potential …
There are a lot of shelving options. Two-tier or mezzanine, fixed or mobile. If you can squeeze your rows of shelving together, and only open them up when access is required, you can save 50% of your floor space …
Is your number one product the easiest to get to? If your pickers are regularly travelling the length of the warehouse to get to your biggest sellers, you’re wasting time compared to keeping everything nearby.”
Install a Voice-Directed System
Iain Priestley, director of the national distribution centre operations for Connect Distribution Services Ltd, found that installing a voice-directed system increased efficiency by 40% in the first month:
“Initially, our pickers were a little concerned that they wouldn’t be able to adapt to the verbal instructions. Yet, within just a few days, everyone had increased the speed setting they receive from the voice commands. After two weeks they were working at the fastest setting.
Voice has undoubtedly become a mainstream warehouse technology, yet in our relatively traditional industry, implementing it has given us an edge compared with other distribution companies. Crucially, it has enabled us to deliver a higher quality of service and fulfil the high degree of same-day dispatch orders we receive.”
Use Bigger Carts
It sounds deceptively simple, but bigger carts can increase productivity by a mile. Ian Hobkirk, president of Commonwealth Supply, says:
“By picking into multiple order containers (e.g., totes containing order batches or discrete order totes), companies can effectively pick multiple orders at one time using a single cart. And, make sure that cart is sizable (i.e., 5 feet x 2 feet with at least two or three shelves) and able to handle the multiple orders …
I go into operations and see people using these tiny, 2 foot x 2 foot carts to pick two items and then push those orders across the entire warehouse … If you can get a little bigger cart that can accommodate a few totes or boxes at time, you can drive up your pick rates, instead of having to make 20 trips through the warehouse to pick 20 orders.”
Pay Attention to Accuracy
Accuracy rate is of the utmost importance; yet, research by the GS1 US and the Auburn University’s RFID Lab reveals that the average inventory accuracy rate for retail is only 63%.
Graham Jones, logistics manager of the delivery service, DPD, says:
“All warehouse operations strive to achieve the highest levels of inventory accuracy … The simple principle is that all physical movement or change in status of an item must be reflected in a transaction on the system. The transaction must be time- and date-stamped and referenced to the request that generated the movement
To assist operatives in achieving the level of accuracy required, the use of barcode and radio frequency identification technologies provide a quick, simple and accurate way of identifying products and creating stock-movement transactions on the system.
Operatives also benefit from the ability of the system to optimise both their route around the warehouse when carrying out stock put away and order-picking tasks and the location of products based on usage, size and so on to provide the most efficient stock-location layout.”
Set Up an Automated Returns Process
Managing returns is a complicated process which requires proper software support, as well as a good system in place to control it.
Alex Parvenov, Senior Consultant in the Supply Chain Practice of CIBER, Inc., offers some tips on how to do this successfully:
“Try to control the returns process through “Returns Authorizations.” With Return Authorizations, the preapproved returns can be received quickly thereby simplifying the returns identification and speeding overall processing. To enable radio frequency (RF) equipment automation and verification, these expected returns should be entered into the system prior to arrival.
Stage saleable merchandise by a putaway zone. Most of the returned merchandise is generally in saleable condition and will be returned to the storage area. To streamline the subsequent put away process, saleable products should be staged on pallets by destination zone.
Track un-saleable merchandise with a bar-coded label. Any merchandise that is not saleable and cannot be discarded is usually stored according to vendor guidelines. While some vendors simply require an inventory report to issue credits, others will send a sales representative to inspect the goods or to ship to the vendor. A complete audit trail consisting of return reason, date of initial shipment, date of return, customer name, etc. will assure legitimacy of the claim and improve supplier relationships.”
Optimize Labor Efficiency
Denny Hammack, president of the shelving and storage provider, Patterson Pope, says:
“If your WMS doesn’t have the ability to generate efficient picking plans, create them manually. Analyse your material usage patterns, and store high-volume items together near the front of the warehouse to eliminate travel time. Also, store items that are frequently sold together near one another. Basically, you will streamline operations if you try to keep the items you pick most often in the most accessible locations to eliminate picking delays.
Improving warehouse efficiency is as much about common sense and the right storage equipment as it is about fancy picking algorithms. Follow these simple steps and watch your efficiency soar.”
Create a Performance-Based Compensation Program
Jason Bader, managing partner of The Distribution Team, says that performance-based financial incentives can be a good way to prevent low work ethic:
“Why do you expect the people who manage all of your cash (the inventory) to work for minimum wage? Many distributors pay more, but how many have a variable compensation program based on performance? Come up with five criteria to measure. These can change over time. Make sure that it is a team incentive paid on a monthly basis. If the team hits all five goals, the amount you pay will be a pittance compared to the money you saved in sloppy material handling.”
Foster a Culture of Responsibility
Dixie Brock, director of national warehouse safety for APL Logistics, thinks that safety is everyone’s responsibility:
“It’s easy to assume that all forklift injuries happen to operators. But forklift pedestrian injuries are common, and sometimes it’s the pedestrian rather than the operator who’s to blame.
That’s why all of your company’s warehouse employees – and not just your forklift operators – should receive frequent forklift safety training. Remind them often that the forklifts they routinely work around weigh more than the cars they drove to work that morning.
If workers aren’t reminded of the equipment dangers, they may tempted to walk out of a warehouse aisle without looking both ways to see if a forklift is coming. Or they might walk in front of a moving forklift without giving it a second thought.
And never let distribution center employees forget that they have an obligation to take some responsibility for their own protection–even if they’re working right next to operators who’ve been professionally trained. It could make the difference between them going home from work or going to the hospital …
Most important of all, it means constantly reminding people that safety is not just a forklift driver’s job or a safety committee member’s job. It’s everyone’s job.”
Start With Trust
When it comes to successful warehouse teams, Derick Pope, a supply chain professional and president of Proxess Group LLC, places priority on solid leadership:
“Success in any business starts with trust. Sustained high level performance from your employees is a direct result of winning their trust as a leader. It’s no different than a sports team that gives it their all night in and night out to be the best because they trust and believe in their coach. The question becomes what type of leader are you?
Are you a leader people can believe in and trust to have their best interest at heart? A good leader achieves buy in from his/her staff because of the content of their character. People can see through someone who is not genuine. You can be the most knowledgeable in your field of expertise and have the latest technology but that won’t translate into long term success without employee buy-in.
If an employee can feel good about being valued, coached, mentored and setup to succeed by their leadership they will want to work for you. They will want to perform at a high level not just for themselves as obviously they should but they will want to perform the same way for their leader. It’s been proven that high pay alone does not guarantee sustained performance nor does processes and procedures.”
Communicating With Stakeholders
When you’re running a multi-channel operation, there are often multiple stakeholders who all want to provide their own input. This can be tricky to manage.
Ian Hobkirk, founder and managing director of Commonwealth Supply Chain Advisors, explains this challenge:
“Different stakeholders in a company might get really protective of inventory … So, there are all these competing people saying, ‘don’t let one channel steal all of the inventory.’”
This means setting priorities is essential, whether that’s wholesale or e-commerce. Don Derewecki, senior consultant at St. Onge Company, weighs in on this issue:
“You have to get the commitment from top management when it comes to policies and systems … If you don’t have that, you don’t have much of anything.”
Pop-Up Fulfillment Centers
One of the emerging trends in warehousing is pop-up fulfillment centers, that operate for a short period of time when the need is high.
Jeff Mueller, vice president at Sedlak Management Consultants, expects this to continue as companies open up smaller locations outside of core hubs in big cities like Chicago and Los Angeles to fulfill orders more efficiently:
“The ‘mother’ fulfillment center ships into these regional, pop-up centers, which are only operational for about three months … Then, the pop-ups service the firm’s regional customers in a more labor-effective, service-oriented manner.”
As the sharing economy takes over the market, on-demand services are spreading into the warehousing industry as well. Amitabh Sinha, Associate Professor of Technology and Operations at the Ross School of Business, elaborates on this trend:
“The idea is that the shipper has access to a large network of warehouses, and can activate services “on the fly,” ranging from bulk pallet handling to fulfillment, in small to large volumes and for relatively short times.
For example, a small e-commerce retailer may decide to create half a dozen different distribution points, with as few as 50 pallets at each warehouse and little to no fixed time commitment. The warehouse provider would use its own labor and equipment to perform standard and optional services such as receiving, shipping, case pick, item pick and packing, and would charge the retailer on a per-unit basis.
In such a system, the retailer incurs no upfront fixed costs, and gains significant flexibility. Of course, the unit cost charged by the warehouse provider may be higher or lower than what would be incurred by the retailer if it operated its own high-volume, high-utilization warehouse. But this is the benefit of dynamic on-demand warehousing: The retailer gains flexibility and avoids capital expense, even if sometimes the per-unit cost is higher.”