Do you wander whether your company works effectively – look at the warehouse and you will immediately understand. Indeed, only one glance is enough to catch any problem in the organization. Make an experiment and visit the warehouse accidently, at any time – during the peak period or during the lunch break. What do you see? Do you see well-arranged goods, labelled racks and goods, well-arranged packaging, clear division of zones, calmly working employees? Do you see order, traceability of actions, do you see harmony? If you are a new employee in your warehouse, could you be able to orientate immediately in this environment?

It doesn’t matter what the industry is, the warehouse is designed simply:

Receipt of goods – allocation – picking – expedition.

And every stage shows where exactly the organization suffers or where the processes are slower. Let’s look at some of the symptoms and make a diagnose:

1. Working overtime

Having perfect other conditions (cleared and arranged warehouse, regular expeditions and so on), this symptom is a signal that the planning does not work well. It means that the deliveries are not planned, they arrive chaotically, usually in the last possible moment and the warehouse workers must stay after the working hours to receive the parcels. Otherwise either the production will stop or the customers will not be served on time

2. Not well arranged warehouse

One warehouse is not well arranged when the goods are stored anywhere, nevertheless where their place is according to their purpose (per customer/supplier) or their turnover (ABC analysis). Placing the goods anywhere shows a lack of plan – it is neither clear when the goods will arrive nor in what quantity. As a result, the warehouse workers store the newly arrived parcels wherever they find free space.  After that, another product arrives in the warehouse and this causes relocation of the already located goods or the workers must search the goods for expedition in the whole warehouse. This leads to double and triple actions, waste of time, labor, nerves. The mistakes explode. The problem gets deeper if the warehouse manager is too polite and does not want to confront the other departments. Then the other departments do not see their mistakes and blame the warehouse only. The warehouse workers are pissed off to thrash over old straw by constantly moving the goods, they give up and leave everything to go by itself. And the circle is closed, the company suffers. Because there is no person interested to get out of this situation.

3. Picking mistakes

You will say this is a pure warehouse problem. Well, Yes and No. Yes, because every picking person must watch what he is commissioning for transfer to production or for expedition. No, because the warehouse worker cannot always distinguish the alternative materials. Thus it is absolutely obligatory someone to perform an entry control of the materials/goods according the specification or the sample, to give a direction and to label the goods if necessary. This procedure is very applicable for deliveries from new suppliers, new products, change of a supplier or a product, change in the packaging or when our staff is new. If the incoming inspection is missing or is badly done, the problem will appear either in the production (machine stoppage, finished product which does not meet the standards), or at the customer. Of course the loses are for the company because either preventive measures were not taken or a key action is missed in the chain before the warehouse.

4. Big supplies or lack of products

These symptoms talk about a big problem in planning.

5. Late expeditions

This is a sure sign for poor organization in the warehouse but also a signal for lack of coordination among sales, logistics and warehouse. Usually the problem comes from late submitted orders, waiting for the production to complete series, wrong records in the warehouse program. And none of these problems were generated by the warehouse. The late expeditions show a general “illness” of the company and stagnation or a reverse trip down on the spiral of growth.  The late expeditions could be compensated in the beginning by working overtime but this is a temporary solution. Every person has a limit of lassitude and at one stage he just refuses to work overtime simply leaves the company. Only eliminating the purpose may improve the situation and to restore the normal working regime.

The above listed symptoms describe just a small part of the mostly met organizational problems. Usually the management thinks that the problem is in the warehouse only. The truth is that the warehouse reflects the company condition. It is a very strong indicator which point the real reasons for the poor management. Whatever one warehouse manager do, he is forceless to handle the mistakes of all departments. The warehouse is the last stop and it accumulates all negatives from the chain before it – wrong orders, late orders, wrong records, lack of records, ineffective entry inspection, lack of management decisions, etc. And it is really sad when you show the mistake to someone and ask for a permanent elimination of the problem, the management to tell you “there will be no change, handle it somehow”. Always when the warehouse is stacked, there is a reason in the chain before the warehouse – the mostly spread problems are caused by lack of adequate planning.