Wednesday, May 16, 2012

Improving Warehouse Productivity

In the constant struggle to improve efficiency in your warehouse operations, save costs and improve profitability we look for the big hit opportunities.  There are often low lying fruit or options more easily implemented that go a long way to help.  When combined with other efforts the savings can add up quickly.

The first and foremost issue is having a “system”, reproducible and predictable.  The system should be part of your Enterprise Resource Planning (ERP) solution.  The ERP system provides the framework to implement, track and measure your efforts. 

Did what you just implement actually save time and effort of your staff and add overhead someplace else?

Use your system.  Track and measure to get baseline figures of your current efficiencies or lack of them.  Then do the best you can to change one thing at a time so you can more easily identify its success or effect.  This may be the hardest part, but the most important.  Your organization needs to do this regardless and periodically to determine if you have outgrown your current system.  Analysis can take a bit of effort initially, but maintaining becomes routine and not difficult.  The results provide criteria for new solutions. 

You do not need to be actively looking for a new solution to find out if you are doing the best you can with your current resources.

What are some relatively simple things that can be done?

Look at how your warehouse is physically organized.  Is it possible to rearrange some of the products for more efficient order picks?  If you cannot move the product, how about changing the order the products print?  How about voice picking options?  A lot of time can be wasted by having workers walking back and forth.  What would your day be like if you just walked back and forth versus starting at one point and ending up at the other end?

Do you bulk pick then sort and pack or do you pick each order individually.   No right or wrong answer here, just food for thought.  It is okay to do a combination of both pick methods.  What picking process minimizes employee overhead and increases efficiency.

Separate the high volume (movement) products to one area so that the 80/20 rule applies.  Pick 80 percent of your orders in 20 percent of your space.

Keep bulk, case, or pallet picks in a different area than the individual items.  This is especially true if you are mixing forklift and foot traffic.  Taking advantage of these separated areas also helps with stock rotations and physical inventory counting.  Cases are typically easier to count than individual items.

You generally want to cross train your warehouse staff in case of absenteeism.  It also makes sense to keep people who know your products as near as possible to the products they know.  It saves a lot of time when an employee knows right where to go versus having to search isles or bin locations for your products.

Work on determining and maintaining optimum stocking levels.  Less inventory is generally better for the budget.  Too little means customers may have to wait and might go else ware.  Perishable items have really limited shelf life and benefit particularly well from safely reduced levels. 

There is an optimum inventory level that is different for each organization and each item within that organization.  Many so called experts will tell you industry averages and that you should be here or there.  You know your business better than anyone and equally as important you know your customers.  Do what is right, but balance that with the knowledge that improvements can be made even in well organized and run warehouses.  Those improvements are driving forces behind a great Return on Investment (ROI). 

If you handle your own routes and deliveries, find out if your ERP system has a module or integration with a service like UPS’ Roadnet.  Software of this type organize your deliveries in the most efficient route and create reverse load sheets for your vehicles.  Save time, save fuel, save energy, save, save, save.

One of the most critical assets of an organization is employees.  They know what is going on and if you empower them, they will return many times the investment.  Give them the tools and resources available in your budget and they will produce.   You may not be able to do everything, but small incremental acknowledgements can go a long way. 

Ask yourself if you would want to work for yourself.  There is a show on television where the company boss works anonymously in his own organization.  What lessons can be learned?  What bigger lesson is learned if your people do not know who you are?  Are the executives separated in some ivory tower?  The whole organization needs to know, understand, and work together.  There should be a time every year where every (yes every) manager and executive has to work in the warehouse, the kitchen, or sweeping the floors and emptying the trash.  Everyone is valuable and needed.  Take some leadership initiative and make sure you are working as a team.

There are a lot of places where small incremental changes can combine to generate big savings.  There is not enough space here to list everything, nor would everything be appropriate for every organization.  This is where Dolvin Consulting can be your Trusted Advisor.  We help companies identify and streamline their operations so they reduce their costs and become more profitable.  Contact us today.

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