More Common And Costly Errors You Are Making In Your Warehouse – Part 2.

In this second part of our series on costly warehouse mistakes around the world.

We examine the reasons why some warehouses are skilled at ‘storing air’, averse to holding car boot sales and you shouldn’t always rely on memory.

Carrying ‘Dead’ Inventory – This is a common problem with established warehouses. Over time, there just seems to be this growing pile of inventory that doesn’t seem to have a destination. It starts as a small pile from one truck and more and more get added over time. This can quickly take over large sections of your floor space or shelf space. I have seen distribution centres with a third of their floor space taken up by goods that have no postal labels attached. And this wasn’t even the holiday season!

I understand that many warehouses aren’t keen to dispose of them, as the courier company can come calling and it can quickly become a problem. But there is simply no way around it. If it’s taking up space and not earning you money, it is costing you money. You have three options:

• Hold an auction or a car boot sale,
• Send it back to the parcel company,
• Return to manufacturer.

Just do anything and get it off your shelves! ASAP.

Sort Your Storage Locations – When orders are picked directly from the storage location, it can lead to zigzagging and honeycombing of the storage area. This is when orders are picked in no particular order. The duplication of effort of pickers and forklifts is costing you ‘man-minutes’. It may seem small, multiplying this across many locations in the warehouse can quickly add up.

One way around this is implementing a flexible, continuous re-slotting process. As a high velocity product gets picked, change the shelving in that section. You can reduce the size of the bays as the volume of goods decrease or move the goods away totally. This frees up space that would have been otherwise wasted. Another way to curb this waste of motion is to allocate sections in the warehouse to goods with similar characteristics. Having a pick location for fast moving goods and another for bulky items allows the traffic to flow in more predictable directions, reducing the duplication of effort.

How Much To Carry? – in trying to maximise returns, some warehouse managers aim to have their facilities at 100% every time. This isn’t smart as you always need a buffer of space, to accommodate emergencies. 85% is an acceptable threshold for being ‘full’. Passing this leads to pallets stacked in aisle, across traffic lanes, dead inventory piling up in the corner, slow productivity etc. Expansion of the warehouse or the existing shelving system is one way around this.

On the flip side, risk-averse supervisors declare the warehouse as ‘full’ at only 60%. This becomes a case of under-utilization? Why would you want to ‘store air’? You are sacrificing valuable storage space and it is costing you money.

Always aim to maximise your warehouse space; within reason.

Managing Inventory On The Fly – A common problem with start-ups and established businesses. New, smaller firms tend to rely on their memory to stay on top of tasks that need to be done. Not practical at anytime, even if you have only one customer, it gets worse as they expand. You must have an inventory management system to keep track of what passes through your warehouse. This is the only way to keep track and ensure profits.

You know you have a problem when:

• You constantly have a lot of order picking errors.
• You cant seem to find half of the shipment that came in last night.
• You are not really sure of how much stock to carry
• You hear yet another supervisor say “I know its here…somewhere”.

Think of how much time is lost searching for goods. Cant that time be spent doing more productive tasks? Investing in a WMS is an expense, but an important one. They pay for themselves quickly and help by reducing picking mistakes and reducing excess inventory.

Battery Charging Errors – How many times have you had a driver complain about a flat battery on his assigned forklift? For me, too many. While I advocate making people take responsibility for the tools and equipment they use, there are errors that occur that still baffle me. A motorized pallet truck is plugged in and the switch isn’t turned on; the charger for the order picker is used to charge the forklift!

These errors can cause consequences, ranging from ruining the battery to a possible explosion. When training staff to use these equipment, ensure that they learn how to charge them after use and proper maintenance techniques.

Monarch Shelving Limited is a renowned supplier of new and refurbished warehouse equipment.

We offer free tips to help streamline your distribution business. We even buy your old warehouse equipment. Got a trade for us? Call us today.