5 Common and Costly Errors In Your Warehouse, Part 1.

Got a minute? Here are three questions for you…

1. Are high staffing levels silently ruining your business?
2. Are you are strangling your cash flow by buying rather than leasing?
3. Did you even know that wider aisles can be bad for your warehousing business?

Like all businesses, the warehousing and distribution industry is prone to inefficiency.

While many can be spotted and quickly addressed, a large number go unnoticed.  Spotting them can be done by employing an independent reviewer/efficiency expert or using a specialised WMS. But nothing beats the feedback from actual safety boots on the concrete.

A recent poll of industry experts turned up over 30 mistakes that they have experienced in the warehouses they manage. Running a warehouse requires a high level of precision, yet these prevail in warehouses, across the country and are even common in warehouses across the pond.  These errors include:

• Allowing forklift training to lapse.

Forklifts accidents killed 133 people in 2013. Forklift drivers are responsible for almost every incident of rack collapse in the history of warehousing. Shocking statement? Not when you think about the fact that they bump into beams and cause them to weaken over time.

While it is mandatory to have a licence before you get behind the wheel of any vehicle, how often are forklift drivers re-trained? Staying up to date with lifting regulations, how drivers handle traffic, their physical fitness etc., are all elements that managers MUST keep on top of.

•  Using the wrong equipment.

Proper management of your storage, inventory and order profiles can increase overall efficiency levels. In a bid to save costs, warehouses buy one type of equipment and try to use it for multiple uses. An example is the use of manual pallet jacks to move loaded cages. Apart from being totally inefficient, such activities put staff at risk of severe musculo-skeletal injuries.

If your facility has maximised space and installed a VNA, using a standard lift trucks among the aisles is a recipe for disaster. Reach trucks, counterbalanced trucks, and turret trucks are better suited for reaching into the tight corners of your warehouse.

•   Overlooking multiple long term costs of business.

Management is notorious for being distant from the workforce, in all industries. A regular assessment of all processes is mandatory to ensure there are no  inefficiencies in the warehousing process.

Are your pickers finding it hard to keep up to KPIs? Are your lift trucks in the garage for repairs more than in the shop floor working? Is there a free flow of traffic through your warehouse? These and more are processes that should be monitored and addressed monthly, twice a year or annually, depending on the complexity of your process.

•  To buy, rent or lease.

The initial expense of starting a new business is largely prohibitive. Many business owners fall into the trap of  complex buying and leasing arrangements for the key elements of the business. From paying full price for new stacker fork lifts to signing 40-hour contracts for hundreds of people at the launch of a new business. These are costs that should be weighed in order of importance and a financing plan drawn up. Many leasing firms offer competitive rates for obtaining necessary equipment via short or long term rentals and leasing plans.

One key factor in business is that you don’t know where the business will be six months or a year down the line. If expansion occurs and the new motorised pallet jack you bought suddenly can’t navigate your aisles, it becomes a sunk cost and a waste of resources. Buying brand new shelving, pallet racking, workbenches etc., too can become a sunk cost when you have to expand and find a way of disposing the racking at below market rates.

•  Which racking to use.

Depending on the industry and the seasons, your business can experience carrying a wide range of products. At other times, the volume and velocity of SKUs can also fluctuate wildly. This can quickly degenerate into insufficient and incompatible racking space for the new units. Buying rows of cantilever racking in anticipation of storing long, bulky materials, becomes counter-intuitive when most of your SKUs become small enough to be moved with mobile pallet racking systems.

These are five of the mistakes that warehouses like you have identified as causes of costly inefficiencies.

Are you committing any of these errors in your warehouse?

How many have you spotted in your distribution centre? Is management spending too much on items that can be leased? Are you using manual pallet jacks when you really need a ride-on motorised pallet jacks?

This is the first part in a series of posts to educate you on the common errors you may be making. Examine your processes and correct them ASAP. Using used pallet racking is frowned on by many, but that is if it is bought from unscrupulous dealers.

At Monarch Shelving Limited, we refurbish and supply pallet racking.

We also supply high quality shelving, bins and work benches. Contact us today for excellent deals on warehouse equipment.