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 a number of ways in which companies can get it wrong.
To help you keep on top of your warehouse management and ensure your storage facilities don’t generate undue supply chain costs, take note of the following seven common warehousing mistakes. If you can identify signs that any of these issues exist, steps to eliminate them should be taken as a priority.
If on the other hand, your warehouse is already free of these problems, it’s a good idea to take note of them anyway and to remain vigilant. Sometimes things can slip, especially during busy times.
#1: Holding Excess Inventory
Despite years of knowledge dissemination in the warehousing field, encouraging lean practice and inventory reduction, storing too much inventory is still one of the most common warehousing mistakes made by supply chain organizations worldwide. 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 your supply chain leaner and leaves you with 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, as and when you need them.
#2: Failing to Optimize Picking Paths
Another of the most common warehousing mistakes–overlooking the need to plan efficient picking paths through your warehouse–will handicap your picking rate. This in turn can impact supply chain cycle times, as well as generating unnecessary labor costs through less than optimum productivity.
Ideally, your warehouse operatives should be able to complete each picking run at a location close to the dispatch area in your 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 Processes
Failing to utilize technology and holding doggedly onto inefficient, paper-based workflows is a warehousing mistake common to many smaller organizations. While you might think your small logistics or warehousing business is better off keeping things simple, paperwork actually has the opposite effect: bogging down your processes and leaving you with the liability of delays through lost or misplaced documents.
You will actually generate more efficiency by switching to digital information storage and transmission. This doesn’t mean you 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 you better today than a trail of paper documents. You’ll save money on consumables and help the environment too, if you eliminate your paper-based processes.
#4: Lack of Attention to 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, results in 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. This is the best time to get the warehouse space tidied, as it enables the next shift to begin productive work without being delayed by clean-up activity.
#5: Insufficient Health and Safety Management
Even a tidy warehouse isn’t necessarily a safe warehouse. Good health and safety management in a warehouse is about looking for the hidden hazards as well as the obvious ones. Yet, all too often, health and safety issues get overlooked in busy warehousing operations.
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, analyzing the causes and acting to eliminate them, can certainly save costs and quite possibly, save an employee or two from serious injury as well.
#6: Neglecting 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. Actually though, the role of goods-in receiving is critical to effective warehousing and is an area which shouldn’t be neglected.
In order to ensure your goods-in processes are efficiently maintained, utilize dedicated staff and compensate them well for their efforts. Intake procedures can be quite specialized, so this is not an area in which to assign staff randomly. Make sure though, that you do have some other warehouse operatives trained in goods receiving, just in case you need back-ups to cover sickness-absence or holidays.
#7: Ignoring Staff Development
Tight budgets sometimes mean training and development activities don’t receive the priority that they deserve. Your employees though, are your most important asset. If you neglect to identify development needs and provide opportunities for individual growth, higher staff turnover is the most likely outcome.
It costs far less to keep existing employees motivated and engaged, than it does to backfill vacated positions. So remember to devote some time and resources to staff training and development, even if it means hiring temporary staff on occasion, to cover your permanent employees during training.
As you may have noticed from the seven common warehousing mistakes listed above, there are a number of elements to managing an operation effectively. Close attention must be paid to people, processes and the warehouse environment itself. If you can avoid or take steps to prevent the seven listed mistakes, you should have a sound foundation on which to build continuous improvement efforts, without spending too much time fighting fires.
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P.S. Feel free to contact me if you need any help with your warehouse layout or design