Running a warehouse is much more complex than it was in the past. Supply chain bottlenecks combined with increased online sales. This is coupled with a growing expectation of fast shipping and delivery. It has put a ton of pressure on warehouses to perform. Many companies, regardless of their size or experience, have problems when it comes to managing their warehouses. Warehousing plays a crucial part in logistics. From storing inventory to packaging and distributing products, efficient warehousing is essential to keep business operations. This help in moving smoothly the operations and achieving customer satisfaction. Here are the top ten warehousing mistakes made by organizations and steps to be taken to avoid them: –
Inaccurate Inventory Management
- The most important responsibility in warehouse management is inventory accuracy. Inaccurate inventory numbers lead to several issues like operational confusion, unfulfilled orders, need for inventory audits, failed customer SLAs, increased time for finding products in the warehouse and many more.
- Today’s warehouses should have a robust warehouse management system (WMS) that integrates things like inventory management and tracking, order fulfilment, shipping, receiving, reverse logistics, and more. These systems can even integrate with other technology solutions, like mobile carts, wireless headsets, and automated shelving or conveyors.
Wrong KPIs
- Measuring KPIs such as average time for order picking or the number of time products spends on the shelves is great, but if the whole picture is missing – from receiving through shipping – it will be difficult to notice the inefficiencies and expenses that could be avoided.
- Understanding just what metrics are most important to the business operations is the first step toward collecting actionable data in the warehouse. One should know to keep track of these metrics. Then, it is a simple matter of putting the processes into place to collect that data and then analyze it.
- If unsure as to what type of information should be collected about the warehouse operations, consider hiring a warehouse optimization specialist or logistics consultant. Paying someone to spend some time figuring out what should be tracked will help set up processes & KPIs for continuous monitoring.
Poor layout
- It is imperative to design the facility layout carefully to prevent non-essential movement. Involving a warehousing layout expert to design a facility with a smoother flow helps in accurately positioning & setting up different areas. When warehouse space is at a premium, it can seem a luxury to designate separate areas for shipping out orders and receiving goods. However, not separating these areas at least in some way can lead to inefficiencies and mistakes that cost money.
- On an especially busy day, for example, the team may accidentally put a set of just-received products right back out onto a truck for shipping, or they may place a picked and packed order back on the shelves. Either of these mistakes can lead to an incredible amount of delay and waste, and decrease overall customer satisfaction.
- Consider placing shipping and receiving in completely different bays of the warehouse so there is little chance for confusion. Proper planning of different types of storage areas and operating areas with physical and visual demarcation tremendously helps in enabling a seamless operational flow
Failure to optimize Picking path
- Another common mistake organizations make is poor optimization of order picking paths in the warehouse. Picking costs are a significant contributor to warehousing costs. Inefficient pick planning directly impacts unit economics and profitability. Besides, optimizing picking effort helps boost employee productivity and morale.
- To make the best use of their time and energy, one should carefully study the location of the items about one’s pick speed. Often picking products must place in close vicinity to each other as much as possible. Achieving this type of analysis is much more complicated, but with the right software packages, one can resolve this challenge.
Sticking to paper-based processes
- There is no reason that a warehouse should still be using paper to document workflows. There are so many options available in the digital realm that can optimize this documentation. Utilizing paper processes for everything increases the risk of mistakes and missing paperwork. It also requires more person-hours to manage all the paperwork and materials, causing costs to balloon.
- Embracing the technology that is available by installing effective software to manage data and inventory will help gain better visibility, so it can be known exactly where the products are at all times, how many are in stock, the stock levels and when is there a need to restock or filter out an obsolete item. Switching even portions of operations over to digital processes can increase efficiency and accuracy, leading to an overall decrease in costs over time.
Holding excess Inventory
- Having too much inventory on hand can be costly in many ways. Firstly, it takes up storage space that could be used for other products. In addition to this, excess inventory can delay other processes such as picking, restocking, etc. Items that sit at the back of the warehouse can become obsolete and forgotten, preventing organizations from making profits off those items. Reducing the levels of inventory as much as possible can lead to a leaner supply chain without losses. Utilizing software packages and receiving large orders in smaller batches are both ways to accomplish this. This helps to maintain optimum inventory levels.
Lack of Safety Policies
- Even an organized warehouse isn’t always safe. If employees are constantly injured, they will need to spend more time off work or will work slowly to prevent their injuries from getting worse. Lack of safety policies can have serious consequences. It can lead to injuries, which will invite workforce-related issues. Apart from injuries, working in an unsafe manner can slow down your process and increase labour costs.
- It is important to maintain strict safety policies. This ensures employees are not cutting corners and following ergonomic practices. Rules & directives have to be made to ensure strict adherence to such policies
Lack of proper training & workforce development
- Another big challenge in warehousing is employee turnover. When a worker leaves an organization, a significant cost comes along with it. Employees leave for various reasons, but one common reason is that they do not believe they are receiving the right amount of training and development opportunities to exceed expectations and grow.
- Employees that do not receive training and development opportunities makes them more prone to mistakes, thereby reducing quality and increasing inefficiency in the supply chain. Sending employees onto the warehouse floor without training on proper work procedures and safety is a recipe for disaster
- Investing in training can not only reduce workplace injuries but also improve productivity and efficiency. At the same time, proper training lets workers know that they care about their well-being. This can improve employee retention rates.
Improper housekeeping
- Warehouse cleanliness or tidiness is one of its top priorities. Shelves dust layers, aisles debris, and equipment broken pieces are all apparent signs of a dirty warehouse. Messy warehouses are not just hazardous, but they also obstruct the flow of goods and people, reducing productivity.
- The remedy is to make cleanliness as one of the standards. Every employee shift should have a cleaning schedule with checklists and deep cleaning of the facility should take place periodically. Establishing a housekeeping routine by regularly tidying up and cleaning after every shift can help drastically. This will allow the next shift to be more productive as they begin working in an organized and clean environment. Warehouses can also follow the 5S principle to make them highly organized, and efficient and increase productivity.
Failure to be future ready
- What works now may not work in the future, especially if operations grow. If the company is not constantly growing and evolving, it will eventually fall on its face. Managing the growth rates is different depending on the industry and company. But the future growth plans of the company are essential.
- Not taking the time and effort to plan for that potential someday can cost a lot in the end. If the warehouse is not keeping up with the latest changes in the industry, or it is not evaluating the processes to minimize the inefficiencies, the business will suffer.
- Scheduling weekly, quarterly or monthly reviews of the progress toward these goals. This will help in quickly adapting or correcting the course. Taking the time to plan for the future allows the warehouse to see opportunities and jump on them as they come up. This will avoid a sudden panic period when it needs to adapt and change the business operations owing to various market dynamics, growth strategies or forces majeure.