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Think out of the box

By Dick Friedman

Distributors who are trying to prevent warehouse mistakes that result in losing sales and customers need to go beyond evaluating procedures, controls and forms. It’s necessary to “think out of the box” so to speak. The same broader thinking is needed for increasing warehouse productivity, which can compensate for the inability to hire as many warehouse workers as needed for full staffing.

Here are three situations where out of the box thinking helped clients reduce mistakes and/or increase productivity. My recommendations came about separately from using my extensive checklist to evaluate warehouse operations and management. They came about from observing activities and discussing the problems with management and warehouse workers.

For one distributor, the only central distribution center is at headquarters, and is used to supply the branches with almost everything they stock and sell; the DC also serves local customers via counter sales and deliveries. In the DC, supplying the branches is more time-consuming than servicing customers. While discussing the unit-shipments to each branch with the owner, I realized that one branch’s replenishment volume is very high; it is almost as large as the unit volume of customer sales at headquarters. Supplying that one branch accounted for 20 percent or more of the DC activity (receiving, put-away, picking, packing, loading). I recommended that as much as possible, the branch in question be supplied directly by manufacturers, which would reduce the labor effort at the DC, which in turn would reduce the pressure that results in mistakes. To implement this recommendation, I suggested that management determine which items were being replenished in high volume. Management then arranged with suppliers of the largest-volume items to ship directly to that branch, which has reduced much of the pressure and the mistakes at the DC; direct-ships of other high-volume items are in the process of being arranged.

For another client, the only DC is at headquarters, and is used to supply the branches; the DC also serves local customers via counter sales and deliveries. In talking with pickers about the high level of mistakes, I learned that the mistakes were occurring in most part because almost all of the picking was concentrated in a short time span. I met with the VP-Operations to discuss the reason for concentrating the picking; I asked him to do an analysis of the number of orders that really had to be picked in the short time span to avoid possible extra paperwork. The answer was about 30 percent, which meant that 70 percent could be picked over a much longer time span but it is not known in advance which orders could involve extra paperwork. So now, all orders are picked over a much longer time span, which reduced the crunch and level of mistakes, and justified the extra paperwork.

For a third distributor, the only DC was at headquarters, and was used to supply the branches; the DC also serves local customers via counter sales and deliveries. (Since I first helped this client, another DC was established to serve some of the new branches.) While walking down the aisles to get a “lay of the land” before using my checklist to perform an in-depth evaluation, I noticed much yellow packaging and wrapping, and faded felt-tip markings and printed descriptions. Plus, many of the apparently very slow-moving items were stored near the packing and loading area, where the fast-moving items should be stored. I met with the owner to discuss the extent of old, very slow-moving items; he took a printout of items that had not sold in years, and we toured the warehouse to determine where they were being stored; all over the place. As we walked, he pointed out items that were known to be fast moving but stored far from the bays meant for fast movers. They were stored far away because the bays meant for fast movers were filled with slow/no movers. This storage pattern meant that warehouse personnel doing put away or picking were wasting time walking much further than if items were really stored by velocity; and causing mistakes by rushing to pick items in time to load trucks. I recommended that no/slow movers stored in the fast moving and adjacent areas be donated or discarded, and that fast movers stored far away be re-located to the space the slow movers were occupying. The owner proceeded to implement my recommendation, starting with the items that had not moved for many, many years.

Guidelines for Thinking Out of the Box
Meet with warehouse workers one on one or in small groups that perform the same functions, without supervisors or managers present.

When observing activities, carry an 8-/12 x 11 notepad and take notes – in your own shorthand if needed to keep up with activities being observed. (Not as modern as using a tablet, but much faster than using a virtual keyboard).

When discussing warehouse challenges, try to distinguish between causes and effects.
When discussing numbers, financial and otherwise, drill down to the lowest possible level, and look for unusual numbers.

Thinking out of the box can determine the root causes of warehouse mistakes and sub-standard productivity, and is an approach that complements a detailed evaluation of procedures, controls and forms.

For more than 20 years, Dick Friedman has helped fastener, tool, industrial and MRO distributors prevent warehouse mistakes that lose sales and customers, including distributors that are scanning bar codes but were not achieving a high level of accuracy. He does not sell systems, software or warehouse technology. Dick has engineering and MBA degrees, and is a Certified Management Consultant. Contact him via www.GenBusCon.com for a FREE consultation.

This article originally appeared in the Jan./Feb. 2020 issue of Industrial Supply magazine. Copyright 2020, Direct Business Media.

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