Warehousing & Resource Optimization Aaj Enterprises February 26, 2019

Warehouse Management

Warehousing & Resource Optimization

Targeting optimization from the earliest stage in “Warehousing” not only sets high standards of efficiency, but also creates a room to alter operational activities as and when required. Sometimes modification is all that is needed to enhance performance and capabilities. Besides, optimizing warehouse has substantial financial benefits.

Every year organizations loose significant amount of money due to out- of-stocks, returns and human error; which tracks back to inefficient practices that were possible to avoid by optimization of warehouse resources and workflow.

Why optimize your warehouse?

It encapsulates shipment of goods from plant to customer ensuring safety and combatting cost inefficiencies. While the cost of warehouse operations can be high due to existence of many non-value added activities, the requirement is to have a warehouse operation that is lean in terms of cost and time by optimization that includes

  • Accuracy in Receiving: – Affecting quality and efficiency of operations downstream
  • Prediction & Planning in Storage: – Prevents loss and maintains efficiency

These values translate into different areas of focus when optimizing warehouse layout and procedures. However, both need to be part of any overall warehouse optimization plan.

  1. Accuracy in Receiving : Matters

Receiving being the first stage in “upstream” area of operations, where a number of activities like picking, packing, and shipping must follow appropriately during the entire process. Errors made during receiving and storage tends to trickle downstream and generate complications during more labor-intensive steps. For these reasons, accuracy is the most valuable positive change at this stage. Let’s explore these in detail

  • Ensuring accuracy

Employees in receiving must be capable of matching what was ordered with what actually arrived. Not only a failure or challenge in matching the same should be flagged on the spot, but also if needed request must be raised for additional order, demanding refund, or sending the unordered goods back. Furthermore, it must be ensured that items are not entered into Warehouse Management System till the issue is sorted, allowing the software to reflect the actual and correct inventory levels for avoiding backorder situations, especially during popular or seasonal items.

  • Performing quality control

While quality sits at the core, efforts towards inspection of individual items, grouped and labeled should be made without fail. Regular comparisons against acceptable damage benchmark must be conducted in the facility ensuring the same does not cross the predetermined acceptable limit.

  • Finding and deploying efficient storage

Goods once received, inspected, and sorted in system, must be stored in the most effective way possible. While the available warehouse space should be readily identified, care must be taken at the time of allocation and storage of fast-moving items making them accessible to pickers at ease, even when the warehouse is busy. Storage of like items, appropriate Shelf and pallet  arrangements to pick the correct items easily, depending on FIFO, FILO, or some other inventory accounting method.

Prediction & Planning in Storage: Key

Gone are the days when warehouses used to be static, where there was rarely any movement of people and goods. Today, warehouses have transformed into a place where constant stream of goods are being managed. There exists a need for warehouse managers to calculate the ultimate channels for goods, no matter how swift or sluggish the flow is. For the optimum utilization of resources in warehouse, warehouse managers must focus on

  • Optimization of Picking Paths

Failure to optimize picking paths can lead to excessive travel times, resulting into slower turnaround times and unnecessary labor costs. In order to avoid such costs, it is imperative to optimize warehouse layout in terms of picking paths.

 – Ensuring Items purchased together should be stored near each other.

 – Picking individual items orders from one area before moving to the next area etc.

  • Forward Staging

Stock must be positioned in forward location of warehouse, closer to packing & shipping area, allowing employees to choose from items when an order comes in.

When quantity of stock lowers in the forward location, replenishment of stock from elsewhere in the warehouse must be brought forward.

If an item needs frequent replenishment, it must be located for pickers to have easy access.

Storage of heavy or bulky goods must done in a manner that would make storing & picking easy.

  • “Dead” stock Management

Most organizations lack “dead stock management plan”. Product recalls, Sales returns, obsolete items that are no longer to be sold; could be one of the numerous reasons why items need to be stored but are not readily available for shipment. Issue arises when this “dead stock” is counted among the regular inventory. Warehouse layout plans should anticipate dead stock and plan to treat them in separate areas, making it visible from inventory area at a glance.

  • Packing Efficiently

Packing order for shipping needs resources like boxes, poly bags, packing material, tape, address labels ecerta, that are available at certain cost. The cost of these resources is associated with shipping costs, which rises with the quantity and amount used. Hence, it is suggested to carefully use resources to make the material cost per shipment slightly lower.

  • Managing Labour

A good labor management system is the key. Amid high shipping times, warehouses require suitable number of workers to deal the expanded number of orders. However, these cannot be full-time workers. Variable labor requirements prompt warehouses to hire temporary labourers for periods of high demand. These workers need to be brought in just before the spike. Afterward, the floor manager can go bout releasing them once the season is over.

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