To say there is any one single way in which to manage a warehouse would be folly—much depends on the nature of the supply chain and of the warehouse itself. However, there are certain common principles that can and should be applied. 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 eight common warehousing mistakes. If you can identify signs that any of these issues exist, prioritise them for remedial action.
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 arrange 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, and generate excessive labor costs because of suboptimal 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 is 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 operation is better off keeping things simple, paperwork actually has the opposite effect: bogging down your processes and leaving you liable to delays resulting from 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 though.
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. By eliminating your paper-based processes, you’ll save money on consumables and help the environment too.
#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 safety implications, a warehouse without good housekeeping is a warehouse without efficiency. The mess obstructs the flow of people and goods through the facility, reducing productivity.
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: Inadequate 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 gets 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, the consequences can be lethal.
Warehouses are inherently dangerous working environments, so getting into 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 hence, should not be left neglected.
In order to ensure your goods-in processes are efficiently maintained, utilise 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 staff sickness 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.
#8: Failing to Measure the Right Things
Most companies today, measure warehouse performance to some degree, but it hasn’t always been so, and despite increased awareness of the need for meaningful key performance indicators, plenty of organisations fail to measure their warehouse operations correctly.
If you can avoid making this mistake in your warehouse operation, it will help a great deal in steering clear of some of the others. For example, let’s briefly revisit mistake #6…
Utilising staff with the right skills will certainly help you get things right in goods receiving, but without applying some measurements, it’s easy to overlook inefficient processes.
As mentioned, goods receiving can sometimes end up as a bit of a backwater, but with the right KPIs in place, performance here will remain front and center along with those processes that typically receive more attention, like picking and dispatch.
Some common-sense metrics to apply at goods receiving include “truck time at the unloading dock” and “time from receiving to putaway.” Together these two KPIs will help you spot ways to optimise receiving processes and reduce the time taken to move inventory out of limbo.
Eight Steps to a More Effective Warehouse Operation
As you may have noticed from the eight 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 prevent the eight listed mistakes, you should have a sound foundation on which to build continuous improvement efforts, without spending too much time fighting fires.
Editor’s Note: This post was originally published in April 2015 under the title “7 Common Warehousing Mistakes and How to Avoid Them”. It has now been updated with the addition of some deeper content.