21 Mistakes adding cost and killing productivity in your warehouse #8

#8.  Mismatch of storage racking and product

The physical storage systems in your warehouse are equally important as the information systems.  In fact the two go hand in hand.  The simplest way to know if you have a mismatch between your stock and your storage system is to walk through your warehouse and look to see how much air you can see around your product.  If there is space around (usually above) every product then you have a mismatch.  The impact of this low storage density is to spread out your stock further than it needs to be.  This increases travel path, and warehouse efficiency is all about travel path because:

travel path = time = labour hours = CO$T.

The other impact of a low storage density is that your warehouse will fill up quicker than it otherwise would.  This can have you thinking about moving when all you need to do is buy some new racking.

There are abundant choices of racking in both the new and second hand market (if you are flexible about your spec. and less fussy about appearance).  The mainstay of storage systems are pallet racking and steel shelving, but there are also long span shelving, drawer systems, plastic bin systems, carton flow racking, pallet flow racking, combination shelving and mezzanine floor systems.  Depending on your start point it is possible to double the storage capacity of your warehouse and improve productivity at the same time simply by installing more appropriate racking in a revised layout.

Before buying anything you need at least the advice of a storage systems consultant to help you decide exactly what you need.  This advice is free (and can be very good if you go to a reputable re-seller) when you buy the racking; but it is a bit like the advice you get from a financial consultant who is paid by commission from the investment products he sells, i.e. time constrained, limited to the products they sell and biased towards their high margin products.  

Given that you will live with the purchase and its impact on your productivity for many years. Racking never wears out so it is there until you decide to change it.  Racking never forces you to change, you must decide.  When you decide to change it will be worthwhile choosing your storage systems as part of an overall warehouse re-engineering project to maximise your investment and gain an ongoing cost reduction in your warehouse.

There are a number of things to consider when buying storage systems:

• How much stock on hand you keep of each item,
• what you are likely to stock in future,
• the physical characteristics of your stock
• bulk cartons or pallets
• small parts, spare parts
• small boxes
• eaches or unit level
• any special storage conditions
• dangerous goods
• temperature control
• batch and expiry or use by dating
• high security storage
• how fast it turns over (its movement velocity)
• your order profile;
• many/few lines per order,
• bulky/ small order size,
• high/low order volume
• how you plan to pick
• the capabilities (or lack thereof) of your business system

Careful consideration of your storage systems in the context of the characteristics of your business and its future growth is an investment you must make if you are considering a major change to your warehouse.  Once you have installed the racking then you have locked in a productivity potential that will effectively become invisible to you (locked in means it cannot easily be changed and you cease to manage it).

Once you have decided that you need some new racking, you must also decide where to put it.  Indeed the size and shape of your space and how you layout your racks will have a big impact on your racking specification.  This layout must be at least done on an accurate two dimensional layout on either paper or suitable CAD software.  A racking re-seller will often draw up a layout for you if you are buying a substantial amount of racking.  

We use and recommend Trimble Sketch Up which is free to download and the basics can be learned in an afternoon.  See the Logistics Help website for some examples and models you can use in the Sketch Up 3D Warehouse online.  

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

A Warehouse Management System for every warehouse

Every warehouse should have a WMS - here's why

A WMS for every warehouse

In my job I walk into a lot of warehouses.  The thing that has frequently surprised me is the lack of penetration of warehouse management systems into the ever increasing number of warehouses and distribution operations that seem to spring up every day.  At the top end of business, of course, they are everywhere.  You really would not want to run a 20,000m² or more warehouse, with 30 or 40 staff, on paper or relying on Bob's* memory. But when you step down to the next tier you will find many businesses with quite large operations running on a basic paper based order and inventory system from their ERP.

At the lower end of the scale, WMS is essentially absent. Internal logistics operations supporting service businesses such as hotels and hospitals or engineering operations such as mining and building mostly don't even know what a Warehouse Management System is.

Given that a good Warehouse Management System can result in 25% productivity gains, improved inventory accuracy, reduced stock losses, faster order turnaround and greater order shipping accuracy, the benefits are simply extraordinary for the amount invested.

If I compare this to accounting software, which was really the first business productivity killer app. for the the modern computing age, then there would not be a small business that did not at least have PC and a copy of MYOB or Quicken.  There is a full spectrum of accounting software to help everyone from the sole trader to the biggest of financial institutions but no parallel capability for WMS.

Small warehouse operations can get significant
benefits from a WMS

So as a dedicated logistics professional (who likes a bit of a challenge) I decided I would fix this.  I started out this year by creating The Rapid WMS Project.  This was my personal side project to try and find if anyone out there was open to the idea of developing a low cost WMS that would be affordable for any organisation with even a small warehouse.  But the tricky thing was that I needed to be able to take the system under my wing so that I could develop a low cost implementation and support model that was not saddled with the overheads of a business oriented to tier one customers.

I found an ally who was almost uncannily, thinking the same thing, in Scott Symons of Paperless Warehousing.  It did take us a while to work out the detail but Rapid-WMS is now in pre-launch mode. That is to say we are looking for customers who would like to be part of something big.  Something that will revolutionise their warehouse operations and change the level of logistics productivity and competitiveness for Australia.

Rapid-WMS is a proven system based on the years of WMS expertise of the Paperless Warehousing premium system but stripped back to the core functions that you need to run a warehouse.  When combined with our years of experience in optimising warehouse and logistics operations and a fast and affordable implementation service, the results will transform the performance of your warehouse.

To find out more call us on 02 8078 6903 of fill in and enquiry form on the website.

*Bob is your best storeperson with an memory like an elephant.

You can follow more about The Rapid WMS project on the blog

If warehousing and logistics are important to your business or your personal career then why not follow this blog by email or on Google+.  To tap in to the full benefits of our business and career boosting ideas I suggest you join The Warehouse Performance Initiative.

21 Mistakes adding cost and killing productivity in your warehouse #21: Failing to maintain and develop your operations as your business grows and changes

The seventh habit in Stephen Covey’s Seven Habits of Highly Effective People is Sharpen the Saw.  This is the recognition that even the best “saws” become blunt over time.  If the saw wasn’t that sharp to begin with, then a few years down the track the work of cutting through becomes really hard!  Does your warehouse feel like that?  Just plain hard work to get through every day?

The mistake of not changing your warehouse operations as your business evolves can cost you dearly.  Even traditional businesses are constantly changing now and the pace of change seems to keep increasing.  New, products, new customers, new services, maybe even completely new business models can get dumped onto the warehouse and the common response is a hasty rehash of existing systems and processes to “get by for now”.  This pattern accumulates inefficiencies over time and can end up with a very inefficient warehouse, staffed by a lot of frustrated people, with the whole operation in need of a major overhaul.

The antidote to “getting by for now” is a program of continuous improvement.  I see two distinct areas to focus on to drive an effective continuous improvement program to keep your warehouse operations up to date and running smoothly.

1. A periodic audit and redesign based on the application of Lean principles will introduce a step change in technology or infrastructure to allow your business to operate at a higher level of efficiency and output.
2. A Lean principle based continuous improvement program will help you to optimise your current processes and work methods.

These ideas are really two sides of the Lean coin: 

• firstly the strategic business side which must be driven by the management team based on how the business is supplying value to customers and 
• secondly the operational continuous improvement that hones the day to day execution of the strategy and it supporting infrastructure.

The need for a change in strategy or infrastructure is often driven by a crisis or repetitive failures by the business to deliver the value required by its customers at a sustainable cost.  Service failures, customer complaints, out of stocks, overstocks, high operational costs, overflow storage are all examples of the sort of pain that will prompt a change in strategy or highlight the need for new infrastructure in a business.

If the resources to answer these challenges are not available within the business then help from professional business advisors will be required to help formulate an appropriate response to the business challenges.  This is exactly where Logistics Help can advise a business that is facing issues such as:

• the relocation of a warehouse or
• the need to keep the current warehouse viable for a few more years,
• warehouse management systems implementations
• materials handling systems
• freight management issues
• or any other warehouse related issue.

A review of the business operations followed by a guided implementation program aimed at delivering business results and a solid return on investment is what we specialise in at Logistics Help.

Whilst major change programs are essential to long term business health, they are not by themselves sufficient.  The ongoing operation of the facilities and systems are critical to success.  This is where any systematic application of Lean principles must flow throughout the company to the operators that deliver the daily work.  Training and coaching your operational staff including managers, supervisors and warehouse operators in the attitudes and tool kit of Lean, will ensure that you get the best out of your investments in the technology and infrastructure of your business.

This is a bottom up approach that engages the hearts and minds of everyone in your business to ensure its success.  Our aim at Logistics Help is to provide resources and training for your staff in applying Lean principles and up to date knowledge and tools for warehousing and distribution so that your warehouse is vibrant and productive.

To this end we have launched the Warehouse Performance Initiative to foster a community of warehouse professionals to raise the standard of knowledge, expertise and effectiveness of people working in warehouses around the world.  You can get involved straight away by signing up here and receive the compete eBook of these posts of the 21 mistakes as a thank-you.  We will also keep you informed of new features and resources as we build them.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #14

14.   Incorrect picking methodology

Picking is the highest labour activity in the warehouse and consequently gets a lot of focus on optimising it by both the Warehouse system developers and the materials handling equipment manufacturers.  Failing to select the best picking methodologies for your particular business needs will see you missing out on what can be relatively easily won productivity gains.

There are three basic picking methodologies and a nearly endless variety of variations depending on the technology, equipment and layout employed in your warehouse.  The three basic picking methods are:

1.    Discrete picking

a.    Picking one order in its entirety before moving onto the next order.  This is the standard picking method employed by all order processing systems.

b.    Most suited to intermediate to large sized orders comprising multiple pallets or cartons of stock (including large re-pack orders).

2.    Multi-order picking

a.    Picking several orders at once in one pass through the warehouse.  If you have ever grabbed pick slips for a dozen single line orders and sorted them into correct travel sequence then you have performed a multi-order pick.

b.    The key to multi-order picking is to create a batch of orders that can be picked by one person onto one trolley.  Each order is assigned a carton number.  The picks are sorted into travel path sequence regardless of the order number.  Each pick is taken from the shelf and placed into the carton number associated with each order.

c.    Multi-order picking functionality is normally only provided by a WMS, but provided you have a modern system with some flexibility in data access, it is quite possible to create a paper based multi-order pick. (Contact us for more details)

d.    Suited to small order sizes where the entire order will fit into one or two boxes.

3.    Batch pick and assembly (also called consolidated picking)

a.    Performing a single pick for the sum of the quantities required for each item in a batch of orders.  This allows a single pass through the warehouse to pick an entire wave of orders.  The stock is staged in an assembly area and needs a subsequent pick process to assemble the individual orders.

b.    Most suited to picking from slow to access areas where discrete picking would be very slow.  This can be used as an entire picking strategy but be wary of the fact that the assembly process is effectively double handling and the selection of items from a large batch pick can be slow.

c.    The slow assembly process can be facilitated by locating the items in the assembly area so that they can be found quickly.  This functionality is not common, but not difficult to code if required, and manual workarounds can also be devised to speed the selection process.

Some common variations and combinations are:

·        Discrete pick the fast zone batch pick the slow zone or bulk areas

o   In this method the majority of the order picks are done for a single order from the fast pick area and a second batch pick for the order wave collects the stock from the slow zone and stages it in an area of the fast pick zone. The order picker then collects what he needs from this staging area to complete the order and thus avoids the travel time through the slow zone.

·        Multi-order pick the fast zone and batch pick the slow zone

o   Similar to the above but more suited to small order picking.  As above but the picker completes multiple orders in one pass through the fast zone.

·        Zone picking (discrete or multi-order or batch)

o   For very large orders or where stock requires different storage conditions grouped into location zones (such as temperature control, security, dangerous goods, special racking).  The order is broken up into zones and picked separately in each zone (often by different operators).  The picks from each zone are usually then brought together on the dock for consolidation for shipping purposes.

Further adding to the options available are various technology and materials handling equipment assisted methods.  Here is a quick summary.

·        Goods to the man systems

o   These are a means to eliminate picker travel and speed up picking.  They can be used for discrete or multi-order picking depending on their level of sophistication.

o   Vertical or horizontal carousels keep the operator in position and move the shelves to present the goods required for picking.  These systems require their own control systems that interact with the WMS to manage the picking and put-away processes.

o   Kiva systems use mini AGVs that move shelves of product to present the goods to the picker.

·        Conveyor based zone picking

o   This methodology is the province of the large distribution centre.  A conveyor moves totes for orders through each zone of the warehouse so that a picker can be restricted to picking from a limited range of items into the tote.  The tote is directed to each zone where a pick is required and ends up at a despatch station for freight labelling and staging.

o   This method also works for carton picks but in this case the picker picks and labels cartons on to the conveyor which directs the cartons from each zone to sortation lanes where the cartons are palletised for each order.

o   Some of the picking may be automated picking systems such as the A Frame high speed picker or AS/RS systems picking pallets and delivering them directly to the dock with AGVs.

·        Wireless terminal assisted picking

o   Warehouse management systems provide the opportunity to manage the information normally presented on a paper pick slip with in any way you could possibly imagine.  An RF terminal can drive discrete, multi-order or batch picking and present the information to the picker via a screen or via voice and even vision based systems

o   Screen and barcode scanning is the most common.  All products and warehouse locations are barcoded to build accuracy into the pick process.  The RF terminal could be fixed to a trolley or forklift, or hand held.  There are also wearable units that allow the user constant use of both hands and eliminate the need to pick up and put down a scanner.

o   Voice directed picking has been implemented widely and is highly efficient because the picker does not have to stop to read a screen or scan a barcode.  Accuracy is built into the process with verbal confirmations of check digits and quantities picked.

·        Pick To Light systems (PTL)

o   Pick to light is a static racking based system usually built into carton live storage (roller racks) that uses a small electronic display at each pick face to indicate how many items to pick.  The operator presses a button to confirm the pick.  This is suited to high volume discrete picking (several hundred units per hour) of small items into repack cartons or totes.  PTL is often one of the zones in a large distribution centre but can also a be stand-alone installation.

What picking method should you use?  This is a very good question and it will depend on your business profile - what sort of inventory you carry and what your order size, quantity and frequency are.  Once this is known then it is a matter of costing the various options to find a suitable return on investment.  The important point to realise is that you may be missing out on increasing both your productivity, service level and accuracy by not taking advantage of what the best picking methods have to offer your business.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #13

13.    Products not slotted according to pick frequency

Traditionally, before computerised stock systems people stored products in warehouses in logical groups so that they were easy to find.  For example if you were a hardware wholesaler you would keep all the hand tools together with hammers, chisels, screwdrivers etc. all grouped together.  Lots of small warehouses still do this, even if they have a location system.  This strategy soon starts to fall apart when the business grows and becomes more dynamic.  

Changes in product stocking levels and turnover of products will require constant rearranging of stock to maintain the logical stock arrangements in the warehouse.  Because this is too much work, the system breaks down and stock gets stored wherever it fits and stock gets randomised and increasingly hard to find.  Does this describe your warehouse?

The simple antidote to this problem is to store products according to pick frequency.  Picking is the highest labour activity in the warehouse and as such is the process to be optimised beyond all others, which is why so much attention is focussed on it.

Product slotting is the calculation of the best place to store a product to minimise subsequent travel associated with moving of that product through the warehouse during put-away, replenishment and picking operations.

At its most basic this is the casual observation by the warehouse staff that it makes sense to keep a particular product down low because they pick it all the time.  The next level of sophistication is perform a Pareto* analysis of your order history to determine the fastest moving products in your business and apply this information to where you store your products and what goes in the fast zone or the slow zone of your warehouse.  Over time your business and product profile change so this must be periodically revised to keep your slotting current.

*Pareto analysis is the application of the 80/20 rule where 80% of the picking is from only 20% of the items in the warehouse.  Keep this 20% in the fast zone and you make a huge gain in productivity.

A basic Pareto analysis can be done on a spreadsheet with minimal effort.  We will be publishing a how to guide and spreadsheet template for members of the Warehouse Performance Initiative in the future.

Awareness of promotions and new products with a rapidly growing demand, and items that are dying or obsolete is also helpful to maintain the warehouse efficiency.  A product slotting review should be done at least twice per year if your business changes only slowly and monthly to quarterly if changes are more rapid and you want to keep your warehouse movements optimised.

The ultimate sophistication is to use product slotting software.  Optislot is the only standalone product in this market at the moment and is now available in Australia through Synermatic.  With typical improvements in replenishment and picking productivity of 10-15% this is a must have investment for large DCs running on thin margins.

According to the website: 

“OptiSlot DC addresses the complexities of slotting by utilizing advanced mathematical algorithms which consider a product's dimensions like weight and velocity, physical characteristics of your environment including slot configurations, pick path and material handling equipment, and operational goals like pallet building, seasonality requirements and retail groupings.”

It's probably worth noting that this is only possible when you have the data.  If you don't have a modern WMS with an accurate data set of your warehouse and product dimensions then this tool will not be any use to you.

Synermatic are also developing a subscription service for organisations that need more than a basic Pareto analysis, but do not wish to invest in purchasing the software, contact them for more details.

Some Warehouse Management Systems also have a product slotting package available.  Most notably Manhattan which was designed by the same person who developed Optislot.

The big hurdle with slotting your warehouse is not getting the information; it is acting on it.  What do you do when you find out that 75% of your stock is in the wrong place?  This is a huge and seemingly wasteful task if all you do is move it from bin to bin.  The answer is to:

• Understand that the effort required to move the product to the right place will pay you back in productivity gains (reduced labour)
• Let natural turnover drive the process over time.
• Change the home bin or pick location or put-away zone etc. (depending on what systems you have available) so that as new products come in, they are put-away where they should be and the wrongly located items are picked out.
• After a month or two bite the bullet and move out anything left behind.
• If natural turnover hasn’t moved it then it is a slow item that may take too long or never pick out.  You do not want slow moving items in fast moving areas!!!!!  I cannot emphasize this enough.
• Perform a more regular slotting review so that you do not get yourself in such a mess in future.

Finally, some personal experience of what having a jumbled warehouse is like.  When I was Logistics Manager at Clifford Hallam I had to re-layout my warehouse to install a lot of new racking (more than doubling the storage by using the height of the building).  I did this whilst continuing to operate the business.  

This process took several months and the entire stock got jumbled due to all of the relocations required during the installation.  My overtime costs for normal operations went through the roof!  I finally sorted it out by re-slotting and working even more overtime (that went down well with my boss, as you can imagine!) to move product around to where it needed to be.  My excess labour fell back to even better than before the re-design and everyone was happy in the end.  So if your warehouse has never been slotted properly then imagine what productivity treasures are waiting to be revealed!

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #12

12.    Cluttered and badly organised operations benches

Quite frankly many operations benches that I see are a mess, cluttered and covered in stuck orders, returns, old paperwork, out of date work instructions and broken staplers and tapeguns.  There is no point having a highly efficient warehouse if you lose your hard won productivity gains with slow administration in receiving and order confirmation/packing freight. 

Here are my tips for best practice in operations workbench organisation

• The first aim of an operations bench should be to have nothing on it apart from work in progress.  Computers, printers, labels, pens, cartons, pending paperwork should be stored off the surface of the bench itself.  Either above or below.  This way nothing will get lost or mislaid.  Everything is easily to hand and never in the way.
• Custom make your workbench to suit your process.  Make sure everything is in arms reach from the operator.  This can be as simple as installing some shelves and Dexion bins to give everything a place.  If you work space is limited you can install monitor and keyboard stands to get the computers off the work top.  Printers can be installed under the bench or on a separate stand.
• Lay a padded anti-fatigue mat in front of the bench.
• The areas around the bench must be kept clear also with a standardised workflow of products and paperwork in and out.
• Sometimes the best bench is mobile.  Breaking down a mixed pallet of small items can be done on the dock with a multi-level trolley/bench that allows you to sort, check off, book in a delivery and then roll the trolley to the rack for put-away.
• Similarly on the outbound process, orders picked to a carton on a picking trolley can be checked, labelled and closed on the trolley and then rolled to the dock for staging ready for pick-up.
• Take advantage of wireless mobile terminals, and printers or even a laptop to allow transactions to be completed on the spot without the need for constant travel to/from a bench.  Installing a wireless network in your warehouse (even a cheap one) will free you up to perform warehouse transactions at the point of activity.  This is a key driver of efficiency and accuracy and is a good interim step if you have not yet invested in a WMS.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #9

1.    Poor layout and product flow (in and out)

A poor warehouse layout locks in poor productivity and what’s worse is that it becomes invisible.  Because businesses change over time, a once perfectly suitable layout and racking arrangement can become a drain on productivity.  Perhaps the layout was never planned in the first place but racking was simply put wherever it fitted at the time the installer showed up.

The principles of process design dictate that the design of the supporting systems and infrastructure must support the business process.  So in order to get the layout correct you must first design the process that you want it to support - with full knowledge of what is possible.  This is the approach we take to all our warehouse designs – first the process then the layout and systems to support it. 

Many people make the mistake of starting with the current system and the existing infrastructure and then designing a process around that.  Unfortunately when you do it this way, you are accepting your current limitations without question and missing the opportunity to unleash greater overall productivity in your business.  What often starts as a need for some new racking, or an observation that you are running out of space in your warehouse can be an opportunity for a major reform and productivity gain if you open your eyes to what is possible.

The basic principles of efficient warehouse layout are as follows

1.    Keep fast moving product in the fastest to access areas.  The corollary also applies, put slow moving items in the slowest to access storage areas.

a.    If you have a bad building with pillars and walls in all the wrong places then this idea is what will bring back the productivity into your operations.  Many businesses simply do not apply this principle to their warehouses or do not apply it rigorously enough to get the full benefit.

2.    Use fixed pick locations near to the despatch dock with a periodic replenishment cycle.  This keeps fast moving products close together to reduce travel path.

a.    This requirement must be balanced by the need to allow sufficient access to the pick face so that all of the orders for fast moving product may be picked.  Too close together and you can create crowding as too many pickers need to access the same product at the same time.

3.    Store the balance of fast moving stock in randomly located bulk storage racks.

a.    As per point 1: in bulk storage racks, keep the faster moving products in the fastest to access locations, which, in pallet racking, will be low and nearest to the despatch dock.

These first three points are related to the idea that is commonly called product slotting.  They are important to layout because they will impact what type of racking you put in your fast zone.  We will talk more about slotting in mistake number 15.

4.    Build travel shortcut aisles into long runs of racking or shelving so pickers can cut across aisles to reduce travel path.

a.    Pallet racking should be continuous with beams removed in one rack bay to a sufficient height to let your forklifts travel underneath the higher levels.

5.    Maximise the use of the building volume with high level pallet racking, multi-level shelving modules and mezzanine levels.

a.    Generally you can stack stock to up to 45cm below the level of your sprinkler heads but check with your fire system maintenance provider for the clearance required for your particular installation.

6.    Eliminate air – your stock does not need to breathe!

a.    When I walk into a warehouse, one of the first things I look for is storage density as indicated by the amount of free space (air) around products in the storage racking.  Lots of air means lots of wasted space which means higher storage cost per unit, longer travel path for put-away and picking and poor productivity.

b.    Once you realise that an investment in the most appropriate racking and storage systems for your products is an offset of both rent and operating expense you will not quibble over the cost anymore.  Good racking and storage systems make you money, last indefinitely and are never superseded.  Is any other investment this good? (Maybe real estate!)

7.    Build optimised workstations for receiving, packing and despatching orders near the inbound and outbound docks.

a.    Too much focus just on the pick process and neglecting the whole of the warehouse operations will see you missing out on valuable productivity gains.  However your stock comes in or goes out, you need space and efficient process to get it into or out of the warehouse.

b.    This means a well laid out operations bench which is kept clear of junk and has everything you need to hand such as labels, packing materials, paperwork, computer workstation (if required) & printers.

8.    Allow sufficient staging space for inbound and outbound order staging and processing.

a.    Around the workstations and at each dock you need clearance for staging of product in and out.  Nothing kills productivity and throughput rates faster than the double handling caused by inadequate staging space.

9.    Principles of good warehouse layout must be applied as part of the overall operational process design. This includes the warehouse management system, data collection technology (mobile terminals with barcode scanners, voice directed task technology), racking systems and materials handling equipment.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #3

3. Products not set up correctly in the business system

Your staff may have all the information they need and an efficient process flow but if the stock they receive has no purchase order in the system or new items have arrived that have not been set up in the business system, then they will not be able to receive the stock and it will sit on your dock taking up valuable space and getting in the way of normal business.

The fix to this is easy, and simply requires some basic business disciplines.  Sometimes administration staff have no awareness of the downstream impacts on the warehouse of their actions.  Engaging the administration staff with the warehouse staff by tours and live examples of the problems will go a long way to enhancing understanding and prompting corrective action.  

New procedures may be required to ensure that new products are signed off by the warehouse manager before they can be ordered.  If stock arrives with no purchase order then get the warehouse to send it back to the supplier.  This will usually create the sort of drama that ensures compliance by both the supplier and the purchasing staff in future.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

21 mistakes adding cost and killing productivity in your warehouse - #2

2. Inadequate paperwork

Nothing stops a process dead in the water faster than not having the correct paperwork or not having enough information on the paperwork to process the inbound or outbound order.  Any interruption to the normal process flow creates exception processing which is typically two or three times the time and cost of a standardised and optimised process flow.  These interruptions can become so normalised that your staff don’t even notice them any more.  

The classic symptom of this is when you walk into your warehouse and see two or more of your staff standing still with a piece of paper in their hands staring at your stock trying to figure out what to do next.  I once walked into the warehouse of a large online business and saw twenty or more receiving staff standing around looking bewildered!  Needless to say, product was not getting booked in and put-away, which means that stock could not be picked and customers were also being disappointed.

This has potentially worse impacts on the outbound side where inadequate information during order processing can have a direct impact on the customer.  Any processes relying of experience and storeperson memory put you at risk of error and slow down your processes.

The antidote is to conduct a process review of all of your warehouse processes and flow chart all the current business flows.  There are lots of great software tools available to do this but some A3 paper, pencil and an eraser will also do the job just fine.  These flowcharts must include physical and information flows.  

When you do this the exceptions will come to light.  Re-engineering the process flows is about removing exceptions by changing the processes and systems to consolidate exceptions into the main process flow.  Once your exceptions are limited to only 1% or 2% of your transactions that you cannot get around then you will have a more efficient process flow.

Re-engineering a process can involve changing physical flows to reduce the waste of motion.  Introducing new materials handling equipment.  Modifying your business system to change existing reports or create new ones so that the warehouse operators have all the information they need to process a transaction.

This is post is taken from an ebook that is now available as a bonus to members of the Warehouse Performance Initiative (WPI*).

The WPI is a place for learning how to improve your knowledge of warehouse operations improvement, sharing skills and ideas and helping other warehouse professionals.  Joining the WPI will give you access to a growing range of free and premium content which will have a direct impact on improving your warehouse performance when you apply it to your business.

You can also subscribe to this blog by email and get my future posts delivered to direct your inbox.

What if your logistics is already the best? (Part I)

Is this the end of logistics as we know it?

Let's say you have done just about everything you can to optimise your logistics processes.  Let's just imagine that you have the best forecasting and inventory management process.  You have the latest warehouse systems and materials handling technology.  You have the best value freight deals and the most efficiently routed transport fleet.  You are now toiling away at the last 1 or 2% of productivity and efficiency gains available to you.  What now?  Sit back and relax because you are now done?

Now lets add in the fact that you have done all this just to stay in business.  You have several major competitors who have done the same things that you have.  You and your competitors have had to do this because you are in a business that used to be nicely profitable but is now a commodity where the cheapest price wins.  The sliced bread market would be an example of this.

At the macro level logistics is just maths and the maths work the same for everybody.  So all else being equal, at some point your logistics simply cease to be a competitive advantage.  If your products are also a commodity then no doubt you have competed in a race to the bottom based on price.  Your razor thin margins mean that your business may well be an unpleasant place to work because cost control is a primary focus.  A serious dose of innovation is required.

What do you do?  Is there even an answer to this question?  Is this the end point of logistics?  How many industries and organisations are already at this point?  Where else can logistics go?
Does anyone care about who delivers your product?  If your logistics has become a commodity and is largely invisible as long as it fulfills the promise, then does it matter who does it?

If logistics is just maths, and the maths works the same for everyone, then why not make it work for everyone?  Once it has reached this point, there is only one place for logistics to go next and that is to embrace collaboration to its fullest extent.  This means collaborating with competitors - no I don't mean price fixing, I mean take advantage of the maths and get your cost reductions from consolidating logistics operations with competitors in industries that serve the same markets.

Each of the retail outlets you supply probably also get a delivery from your competitor or your competitor delivers to a competing outlet nearby.  This is currently done by two vehicles with two drives travelling similar routes.  How is this not a waste?  You each have a warehouse and storespeople and associated infrastructure and administration.  Your individual volume may not justify investment in the most efficient technology but the combined volume would make such an investment worthwhile and reduce the overall costs further.

This is how third party logistics works and how they make their money.  They share infrastructure across multiple clients and charge what the market will bear. This is about the same or a bit more than what it would cost you to do it yourself if you did it well, which you didn't or you wouldn't have outsourced it.

Does this sound crazy?  If so good!  This is just Part I.  I will explore some possible business models for this really not so crazy idea in Part II.

If you found this post valuable and then why not follow this blog by email?

How can I improve my supply chain? (Operations)

Operational improvement

Out of your strategy will come some key decisions about size and structure of the supply chain and what type of supporting systems,technology, processes, infrastructure and service providers are required.  The next step is to review and document what is in place now and then explore what options are available to improve the processes and then select the most suitable systems, technology and infrastructure to support those processes. 

How do I improve the productivity in my warehouse?

This is a lightning overview of how to get some rapid productivity gains in your warehouse.

First off you should really assess the match between business strategy and the warehouse operations. No business is static, and now more than ever fundamental changes in markets and customer behaviour can creep up on a business and require a revised approach to your stock management and order fulfillment strategies.  If your customers are now ordering more frequently in smaller order sizes or your direct to customer online business has taken off then your costs per sales dollar may have sky-rocketed and your warehouse may need a rethink.