21 mistakes adding cost and killing productivity in your warehouse - #6

6. Clutter and poor housekeeping

Warehouses are often treated as bottomless pits and dumping grounds by the rest of the organisation.  Archives, old promotional materials, old furniture and computers all kept just in case they are needed or because they seemed too valuable to throw away and no one knows how to sell them on eBay.   I know of one warehouse that had accumulated sixty pallets of archives from various admin departments.  

At $6 per pallet/week that is a storage cost of $18,720 per year.  If this had been in off site storage and the admin departments had been paying for storage they would have stored a lot less.  As usual the issue came to a head when the warehouse became full and the sixty pallets went down to fifteen with a little effort and consideration of what was really needed.  What old junk can you get rid of out of your warehouse?

Mess begets mess and demoralises everyone.   The way you keep your workspace says a lot about your business and staff attitude to work.  Good housekeeping is not just a matter of cleanliness and removing safety hazards; it sets the tone for the morale of your workforce.  Good housekeeping does not come without effort but will pay dividends in providing a safer, more pleasant and more productive workplace where work is taken seriously and pride and professionalism are evident.

If you think of your warehouse is a profit generating engine rather than a passive repository of stuff then you will not let this happen in the first place.  In accounting terms warehouses have traditionally been regarded as a cost centre rather than a profit centre.  This colours the attitude of the whole company towards warehouses as being a necessary evil.  If you have spare space in your warehouse then great! This is an opportunity to use that space to add value either by extending your product range or performing more value added activity to the products you already provide.

Some tips for good warehouse housekeeping:

1. Invest in a motorised sweeper to clean up dust and debris and use it daily
2. Housekeeping is everyone’s responsibility, let your procedures and policies reflect this attitude.  Your office cleaner should not be cleaning your warehouse (other than toilets and office waste bins).
3. Develop some attention getting policies to help your company understand the costs and value of warehouse space
• Have a sunset clause on old equipment and furniture etc.  After six months it belongs to the warehouse who may do with it as they will.  Discard it, sell it, take it home whatever.  Use the proceeds to buy a BBQ for weekly staff functions.
• Have an internal auction for anything with any real value.
• Charge internal departments for storage
4. Cost your unused space and highlight it at senior management meetings as an opportunity to get a better return on the company's investment.

This is post is taken from a report that will soon be available as a sign up bonus to members of the Warehouse Performance Initiative (WPI*).  Keep an eye on the home page or send an email to admin@logisticshelp.com.au if you would like to be join the WPI and get a copy of the report as soon as it is available.

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*WPI is our global initiative to raise world productivity by helping small to medium businesses develop amazingly brilliant warehouses, (coming soon!).