Effective warehouse management

by Gwynne Richards on 2011-10-08 00:43:48

Key elements include effective recruitment and induction, regular training, multi-skilling and matching activity and workflow to available hours. Choosing round pegs for round holes is essential. Once staff have found their niche position, training is vital to ensure continuous improvement in productivity and cost reduction. Warehouse staff are also a manager’s best assets – their knowledge can help improve processes and reduce costs. Behavioural change is an essential element of continuous improvement.

Next is the continual review and updating of processes. Many companies fall into the trap of continuing with age old processes which haven’t been reviewed for a significant amount of time even though the operation may well have changed significantly. The “we’ve always done it this way” syndrome becomes a barrier to change and continuous improvement.

With regard to warehouse operations and processes the effectiveness and efficiency of a warehouse doesn’t begin when items enter the building. When goods are produced a significant amount of care needs to be taken over the packaging and presentation of the product. There needs to be compatibility between the size and type of packaging used with the handling and storage equipment operated within the warehouse, a point sometimes overlooked by many procurement and design teams. A mismatch leads to lower productivity resulting in increased costs.

Once products have arrived in the warehouse they go through a number of processes from receiving through picking and replenishment to despatch. As picking tends to be the most labour intensive and crucial in terms of customer service, most of the emphasis on improvement strategies is carried out in this area. However a number of the advances in picking technologies such as pick to light and voice picking rely heavily on accurate receipt, put-away and recording of product.

As a result the in-handling process requires significant attention. Putting the right product into the right location is crucial to the smooth running of a warehouse operation.

Another significant element of operating an efficient warehouse is to understand the products being stored in terms of their popularity so that the warehouse can be laid out in such a way that the most popular items are placed nearest the despatch bay. Secondly, that all items that normally sell together are placed together and thirdly that seasonality is taken into account when laying out stock within the warehouse.

The provision of a safe and secure workplace is crucial in terms of employee safety and satisfaction and can lead to lower insurance costs. No warehouse wants continual visits from representatives of OSHA in the U.S. and the HSE in the UK. Good housekeeping and a well ordered house is a sign of an efficient operation. I’ve yet to see an untidy warehouse work to its peak efficiency.

Finally you cannot manage what you do not measure. Performance measurement through the use of key performance indicators enables managers to review existing processes and make improvements where necessary. Managers need to measure what is important to their customers first and foremost and then what is important to the company itself. Typical measures include the following:

 - Orders fulfilled on time in full and damage free
 - Dock to stock time giving visibility of available stock
 - Cost per unit despatched
 - Labour and equipment utilisation

In conclusion there are four key areas in which the Warehouse Manager needs to concentrate attention upon. These are as follows:

 - Labour management
 - Process and performance management
 - Warehouse utilisation
 - Health and Safety

Running an efficient warehouse means investing wisely in people, processes and systems.

Gwynne Richards is the author of Warehouse Management – A complete guide to improving efficiency and minimizing costs in the modern warehouse.

Biography
Gwynne Richards has spent his whole career to date in logistics. Having graduated with an honours degree in Business Studies he worked in both business development and operational roles for companies including BRS (the precursor to DHL Exel), Dawson Group, Lane Group, Nedlloyd Districenters and Danzas. He gained his MBA whilst working with Nedlloyd.

In 2003 he set up his own supply chain logistics consultancy and training company. He has worked with clients including Pirelli, Bridgestone, Wilkinson Stores, RICS, The Metropolitan Police and Mizuno assisting them with outsourcing decisions, performance management, benchmarking and warehouse improvements.

He runs Warehouse Management courses for the Chartered Institute of Logistics and Transport in the UK and produced and runs Masters modules in Transport and Warehouse Management Techniques for the University of Warwick both in the UK, China and Hong Kong. He is a practicing associate of The Academy of Experts and a Fellow of both the Chartered Institute of Logistics and Transport and the Institute of Operations Management