Know-how club

What to do when the warehouse becomes smaller

Regardless of how large a warehouse we are renting or building, it is still not enough. Very soon after we moved into it. There are even cases, still before we move to a new warehouse, we already know that the place in it is not enough. And when we do not have enough space, we start transferring goods and materials, picking up goods anywhere, doing double and triple operations. Frequent there is a waste of goods and losses due to poor management. Not to mention that the inventory never goes out.

When we build our own warehouse, we expect that we will get what we have set as a requirement. In 100% of cases, we have to make adjustments and compromises to our expectations. And as we have planned a useful area, it appears to be diminished and there are places where it is difficult to operate the warehouse equipment. This is another constraint that is beyond us, but we must also comply with it.

What to do when the warehouse tends to become tense?

Many companies in similar situations are starting to buy racks that save space. Other businesses hire extra space. What solution would you choose?

ONE DECISION:

The warehouse is the mirror of the whole company. If something does not work in it, there is always a reason ahead along the chain. In order to optimize the warehouse it is necessary to look globally on the supply chain. It is not enough just to arrange the goods, although we are starting to do so. We need to look at planning, stocks, production cycles and distribution. If we stretch the processes along the entire chain, the warehouse will not be a narrow place, but a distribution center, and will perform its functions adequately.

Let’s look at the potential obstacles:

Planning

Hence the problems of all companies start. If you plan to stock goods, you will quickly reach the full capacity of the warehouse. And the worse is that you will not have room for a new assortment. So review the stocks and the turnover of the goods again. Increase speed and reduce inventory. Storage areas and hammam are not at all cheap. If you do the trick to storing and manipulating unit items, you will see that there are goods that can not be loaded at all with storage costs. However, this is done after detailed calculations are made for each item for the transport-storage-turnover ratio.

Deliveries

The only thing to do here is to control supplies. TokKnow when a shipment is expected and what place it will take in the warehouse. This will avoid the chaotic placement of goods “where there is room”. This will also avoid demand for goods, inventories will run smoothly.

Cross docking and expedition

All goods must leave the warehouse in the fastest way. So some materials may not even put them on the racks, but stay in the cross docking area. It is good to schedule expeditions and the ready-for-shipment goods to stay in the warehouse as shorter time as possible.

The whole company should work as one organism. Nor is it good to deliver more goods, nor is it good to have lack of commodity (same as overeating and starvation). We need a balance that comes from leadership and is run by all units. Then the warehouse will be in excellent shape.

How to make a flow (not a flood) in the warehouse

More and more companies try to reduce their supplies. Some try to transfer the stock to the suppliers, others try to order on smaller batches and frequently are out-of-stock, third companies overstock with the idea to meet quickly every customer wish. In all these cases the warehouse faces dramatic issues by having too much stock or running out-of-stock.

In order to avoid flood in the warehouse, it is enough to make a flow. The flow is part of the Lean strategy for the company. Lean suggests that all departments are mature enough to level the load and get a flow. But, old habits and habits are hard to eradicate. As always, everything seems wonderful, but in reality we are confused with how we can approach. Therefore, there are often companies that claim to work on Lean, but they actually have closed resources in money, machines and people (that is, they are flooded because they are in the mood of goods, bullying and costs). It is enough to look at the processes in the warehouse and we will immediately find out if there is a process stagnation somewhere in the chain. Verification of activities and processes in the warehouse includes actions, duration, committed resources. And when we find an overpayment (for example: double activities, long loading times, difficult goods finding, misspelling, etc.), we need to synchronize the entire chain. And this synchronization will lead us to a flow.

To illustrate the problem and to show that there is an easy way to create a flow in the warehouse, we will set an example with a distributor of fast moving consumer goods. The purpose of this company is to offer (note: to offer, not to keep in stock) a large assortment of goods and to turn them as fast as possible. Speed is particularly important throughout the entire chain: receiving and handling orders, delivering goods, quickly picking orders for customers, fast and accurate delivery. The company has solved this issue by shutting down a lot of money in people (administration, warehouse staff, drivers) and commodity. Extending the process leads to a shortening of all execution times, with fewer people, and a reduction in stock availability.

In the case below, we will only look at one aspect leading to improvement, namely: the process rearrangement. From then on, the other departments and the company start to work faster and with higher profits.

Case:

A distributing company has a warehouse and its own minibuses and trucks with capacity up to 3.5 tons. The company’s clients are both medium-sized shops and garages and school minishops. The company has 40 warehouse employees whose job is to accept goods and pick goods for customers’ orders. Daily orders for dispatch are between 180 and 200, each order is individual and heterogeneous; may consist of 2 different coffee packs or 2 pallets of the same cans. A truck has an average of 30 orders. To reduce mistakes, the management ordered three people to be involved in shipping the goods: 1 warehouse officer, 1 examiner and 1 driver (who is also an employee of the company). Loading a truck in orders for one course takes at least 2 hours.

Make a logistical schedule so that the loading time is less than 30 minutes, timing is optimal, and mistakes minimized.


	pulses
ramp

	cans
ramp

	spices

ramp		door for the personnel
	coffee, tea


ramp	sweets

In the next edition, as well as on www.supplychain.bg, and www.hrmagazinebg.eu, we will provide guidance for solving the problem.

If you want to get guidance for solving a specific case, you can write us.

We will post the case and its decision without mentioning you or the name of your company.

How to make a flow (not a flood) in the warehouse – One decision

To speed up the processes, the company must create a stream – the same way we put buckets with water to extinguish a fire, that is, we make a chain. The chain starts from the collection of orders. Merchants go on a specific route, and customers send their requests by email. It is a good idea for customers to have certain days and hours to send their requests. Logistics’s job is to quickly make the routes for the next day, based on all received orders today. Completion of orders begins as of today. For this purpose, the warehouse staff works with an extended schedule, for example 30 people work in the morning from 06.00 to 15.00, and the other 10 people work from 10.00 to 19.00 (one hour lunch break). The second shift staff prepares 4-5 orders on each route (those to be unloaded last) and stores them in the Expedition area. These orders are not folded so they can be checked. The first shift prepares the remaining orders in stages. An order is executed by a warehousekeeper. By 7.00 am the drivers arrive and start checking and loading. One or two storage staff are committed to folding shipments checked by drivers and loading them in trucks. In the case of discrepancy between the document and the availability, the warehouse or exchange manager plays the role of arbitrator and eliminates mistakes.

To achieve such synchron is necessary:

All warehouse workers know all products
The picking zone is full
The warehouse staff are universal, ie. to be able to do everything in the warehouse
The warehouse program can prepare the routes quickly

How to make a flow (not a flood) in the warehouse – One decision

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