Warehouse Operations is essential in all businesses based on the production of materials or products as it guarantees their proper functioning and helps them achieve the set objectives. Adequate organization and control of the warehouse make it possible to know the stock available at all times, intelligently plan purchases, fulfill the commitments made to customers, improve competitiveness, reduce costs and prevent fraud.
What is Warehouse Operation?
Warehouse Operations refers to the entire logistics services process that is responsible for the reception, storage and movement of merchandise within the warehouse to the point of consumption in the warehouse logistics units. It includes all actions aimed at managing the inventory of a business, as well as the processing of the data that is generated during this process.
On a day-to-day basis, it consists of carrying out exhaustive control in real time of all the changes that occur in the stocks in the warehouse storage, from the receipts and exits of merchandise to reservations or regroupings.
Requirements for Successful Warehouse Operations
Inventory management means controlling where items go. Here are some basic guidelines to follow when it comes to controlling your inventory.
- The warehouse is secured 24/7.
- All parts are uploaded to a work order assigned to a specific asset.
- There are no uncontrolled remote stores.
- No hidden spare parts (as they present a tax problem).
- Use a barcode scanner to scan parts and work orders. Download that information to your CMMS.
- “First in, first out” (FIFO).
- There are only used parts if rebuilt or refurbished to specifications.
- All parts for scheduled maintenance are stored in a secure location separate from the warehouse, and a copy of the work order is attached.
How to Keep Control of a Warehouse Operations?
The Warehouse Operation procedure used to be done manually. Warehouse Operations cards and a file where all movements were recorded were used. With the arrival of new technologies, software has been implemented to control warehouse entries and exits that accelerate, simplify and optimize the entire process, a particularly important change in large warehouses in India where a lot of merchandise enters and leaves every day. In any case, to keep good control of warehouse stock, you must:
Structure and Organize the Space in the Warehouse
Establish a numbering system for all products and create logistics routes that quickly lead to the desired merchandise. Delimiting storage and work areas will also facilitate warehouse organization and control. Determines the arrival and departure areas, the loading and unloading areas, the excess stock areas and those for storage or picking.
Specialized Tasks Within the Warehouse
If employees are clear about what they should do, the warehouse’s operation will be more efficient. Therefore, you should distribute tasks according to the different areas of the warehouse: picking, order preparation, reception, shipping logistics, packaging or postage.
Establish a High Turnover Stock Area
In all warehouses, some products are most requested by customers, which is why they have a high turnover. Ideally, you should create a special storage area for this stock, preferably near the arrival and packaging/shipping area, to speed up the work of warehouse staff and gain efficiency.
Automate the Management of Stockouts
Stockouts are usually a headache because they not only cause interruptions in the supply chain but also generate customer dissatisfaction. Therefore, it is advisable to activate an automated procedure with the service and sales teams.
Do Quality Checks to Avoid Errors
Errors in orders generate extra costs and customer dissatisfaction. Good quality control that reviews each step of the logistics process will reduce these errors. You could apply scanning to verify the number and accuracy of products at the time of packaging, just before shipping.
Warehouse Personnel, Key to Organization and Control
Beyond the automation provided by Warehouse Operations programs, employee training remains key for everything to work correctly. Warehouse personnel are the main persons in charge of controlling the merchandise that enters and leaves, keeping records of its dispatch and entry.
You must monitor stock, protect it from spoilage, and ensure proper rotation. In addition, you must analyze warehouse service costs to optimize logistics tasks, which will allow the company to gain competitiveness and better satisfy its customers. For this reason, companies look for trained personnel with experience in logistics and Warehouse Operation.
Warehouse Requirements
Some common storage requirements to follow include:
- Store only parts that are linked to an asset, except free stock and operating supplies.
- Promote the physical security of the pieces. Treat them as you would your own chequebook or debit card.
- Staff and monitor your warehouse during the same hours as production.
- Make sure each part is assigned a min/max/reorder point. Review them regularly.
- Measure warehouse performance with KPIs, such as stockouts, warehouse value, inventory turns, number of times someone enters without checking a part, mean time between failures, etc.
Key Areas of Warehouse Management
The key areas of warehouse management can be divided into multiple parts, all of which lead to better results.
Measurements
The first area to consider is measurement. In your maintenance warehouse, some of the possible problems you could have are:
- Stockouts: These are times when the system says it has a part, but you can’t find it anywhere.
- Parts Cost – The amount spent on parts.
- Supplier Efficiency – The percentage of time the supplier delivers on time with the right part in the correct quantity.
Materials
Next, and very simply, you want to ensure that you have the right materials, lubricants, and parts in stock.
Staff
When handling the staffing aspect of warehouse management, it is vital to have all processes mapped out and executed accurately. Without a process map for warehouse management, it is difficult to align everyone.
Inventory Accuracy
Inventory accuracy must be above 95%. Warehouse staff should perform regular cycle counts to keep their records as accurate as possible.
Percentage of Parts Assigned to Assets
All parts must be assigned to an asset unless they are free container items or free stock.
Number of Accelerated Parts
Expedited parts should be kept to a minimum as they represent instances where an important part was needed but not available, often incurring massive costs.
Emergency Purchases
The cost of emergency purchases, such as next-day deliveries and rush costs, should also be kept to a minimum. High emergency purchasing costs can be crippling for many operations.
Backorders
In an ideal operation, backorders should be below 5%. That means suppliers must be in tune with their warehouse operations and aligned with their objectives. Having contracts with preferred suppliers helps ensure they keep the items you need on their shelves and may even stock some of your inventory in some cases.
Seven Habits of an Effective Maintenance Warehouse Leader
Warehouse management is an effective leadership function. The seven habits of an effective maintenance warehouse leader are:
- Ensures all removed maintenance parts are charged to a work order. No work order, no parts.
- Monitor leading and lagging storage key performance indicators (KPIs) and make decisions based on data.
- Ensures that the warehouse is secured and monitored 24/7 using locks, cameras, etc.
- Applies technology, such as RFID tags and wearable devices, to manage the warehouse effectively.
- Bring in vendors to provide free training to technicians. Your crew will often view outsiders as experts.
- Rebuilt items are shipped to the rebuilt facility within 48 hours.
- Reconstruction facilities are inspected to ensure the quality of the reconstructions.
Establishment of Warehouse Objectives and Priorities
Before you dive into fixing things, it’s important to set some goals and priorities to get started. These priorities should be based on your company’s immediate needs and resources. Some considerations include:
- Number of warehouses in your facility (some may be as minor as a random cabinet)
- SKU number you have
- Process Diagrams and Maps
- Number of the same part listed under different inventory numbers (you will need to consolidate them)
- Production and maintenance programs.
- Activity levels/parts turned for each shift
- Number of people you can dedicate to the project
- Baseline information and statistics about your current position (to measure progress)
- The condition of spare parts and materials (are they used, are they stored correctly, are they the correct parts, etc.)
- Get a snapshot of the current condition of your warehouse with photos, reporting data, etc.
6s for Warehouse Operations
Warehouse waste can be disposed of using the 6S method. The 6 S’s include:
1. Sort: Remove parts that are no longer used. If a machine has been gone for a few years, there is no longer a need to keep spare parts for it.
2. Straighten: Sort and store parts based on ABC analysis and turnover rates.
3. Shine: Keep parts, materials and the warehouse itself clean and air-conditioned.
4. Standardize: Create a standardized route to sort, straighten and scrub your warehouse and remove redundant parts. Buy from quality suppliers, not the lowest bidder.
5. Sustain: Expand the process to other areas and develop new ideas for storing and securing parts.
6. Security: Access control, security cameras, alarms, etc.
Wrap Up
In conclusion, optimizing storage space is crucial to improving Warehouse operations efficiency and reducing costs in warehouse management. A Warehouse Management System (WMS) is presented as an invaluable technological solution to achieve this objective. By leveraging WMS capabilities, automating processes, and making informed decisions based on data, 3PL companies can optimize their warehouse space and achieve a higher level of efficiency in their logistics operations.
Aaj Enterprises
