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The Argument for Good Warehousekeeping

By Eric Allais

If a prospective customer turned up at your warehouse unexpectedly, would you be embarrassed by the state of your facility, or would it pass muster at the spot inspection? The truth is that disorganized warehouses are bad for business. It’s easy to imagine how bad warehousekeeping practices reduce productivity and cost the distribution industry billions of dollars annually.

Warehouse Denial
One of PathGuide’s clients recently confided that he had been in denial about his warehouse. Jeff Greenberg, director of operations at Rawson, knew that there was some room for improvement, but when he inspected a couple of warehouses equipped with PathGuide’s Latitude WMS, he came away with some skepticism. Why? Because he equated chaos with productivity. “The warehouses we visited were so quiet and orderly that we just thought the staff weren’t being productive. We didn’t know any better,” he said. That’s probably the biggest obstacle to making improvements; realizing that our warehouse environments could be a lot better.

There are many ways that a warehouse or distribution center benefits from keeping its facilities organized and clean. Let’s compare two fictional warehouses to describe exactly how.

On the one hand, we have a warehouse in a state of constant disarray. We’ve all seen this scenario. YouTube videos (like this) show how much damage can be done from poor Warehousekeeping and general lack of appropriate training and safety standards.

On the flip side, we have a warehouse where keeping aisles clear and inventory organized is a priority. Does it take extra work to be neat and tidy? In the short-term, yes. But the long-term benefits absolutely make the effort worthwhile.

A Tale of Two DCs
Let’s turn back to the disorganized warehouse. Its lack of structure and orderliness impacts not only the workers who deserve the best working conditions, but also the company’s reputation and business. Disarray within the warehouse can lead to the following issues:

Warehouse #1
The disarray inside the warehouse destroys confidence in the product’s value or ability to deliver on-time shipments, without errors and damage free. It hurts the company’s reputation.

Visibility to on-hand inventory is difficult to rely upon. This also impacts the ability to pick accurately and efficiently and can lead to delays and errors in shipping. These cause huge headaches for customers that aren’t easy (or cheap) to rectify.

A lack of organization can snowball into big inefficiencies, causing slow picking speeds and lethargic throughput. These symptoms are often an indicator that team members are overwhelmed, or that employee morale is suffering for some reason.

As we saw in the YouTube video above, the lack of organization within the warehouse, or poor staff training lead to safety hazards.

Finally, a warehouse in disarray is hard to streamline. There is so much going on that it’s difficult to imagine how any process can be improved.

Warehouse #2
By contrast, this warehouse makes Warehousekeeping a priority, enabling a virtuous circle of improvement and efficiency to reign, resulting in a number of valuable benefits for the company:

Good Warehousekeeping is important for employee safety. Employees are the company’s number one asset, and must be treated as such.

Good Warehousekeeping leads to better customer service through greatly improved inventory management, faster receiving, put-away, picking and shipping times, savings in labor costs, and reducing expensive errors.

Cleanliness in the warehouse builds confidence. It shows that there are standards and pride in the operations.

A clean warehouse means lower cost of inventory and improved fill rates. It also allows staff to monitor product shelf life far more easily and account for obsolescence and write-offs.

Last, but not least, good Warehousekeeping helps a warehouse eliminate the need for ‘fear stock,’ which is over-buying because you don’t trust what you have on hand or what’s been allocated.

3 Simple Steps to Good Warehousekeeping
Most warehouses fall somewhere in between these two examples. There are a host of tools such as PathGuide’s own Latitude WMS that will help a company keep its operations humming even during spikes in volume. If you’re thinking about Spring Cleaning your own warehouse, picking is a great place to start. It is generally the most labor-intensive and time-consuming task within the warehouse. Here are a few other things to keep in mind:

  • Assign a Warehouse Champion – find that one logistics expert who can see the improvement needs of the organization dispassionately. The champion should help rally everyone to welcome the changes, and help communicate the progress.
  • Assess your Warehouse – conduct a critical and honest visual survey of the facility to pinpoint problem areas such as debris in the aisles, the location of pallets, etc.
  • Establish a plan to solve all of the organizational issues – and revisit it often.

Eric Allais, president and CEO of Washington-based PathGuide Technologies Inc., has over 30 years of experience in marketing, product management and sector analysis in the automated data collection industry, including warehouse management practices in wholesale distribution. He can be contacted at eric@pathguide.com.

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