Affordable Distribution Management

by Don Benson, P.E.

Your approach to change

I suggested in a recent column that if we take the time, we can discover many ways to deal with or solve a problem. And usually all the options we consider are valid; that is, implementing any of them would have a positive impact on the problem. However, the standard process that we have been taught is to find and implement the best option. Often our selection criteria focus on the constraints from the outside; e.g., money or time. In that column, I presented a variety of viable options, and encouraged you to think about your criteria for selection.

The point of this column is to encourage you to consider another approach. Specifically in the area of inventory storage, there are several ways to improve that activity that will impact productivity and quality performance. This alternate approach is to consider implementing them all. That is, to develop a priority for implementation, and not just stop with the first (best) option. The reality is that once you are focused on a particular function or area of the warehouse, and you have some really good ideas for change, why deal with the best change and forget the rest when each one can make a difference? For example, in a pick area, implementing each of the change processes will improve performance. There are probably more that you can name that fall into this group. And to optimize performance, they probably all should be accomplished with part of the inventory at least once per quarter and for some activities, every week. Like sweeping the floor, some small maintenance activities performed regularly, make a big difference.

The following ideas can net big returns when implemented and performed on a regular basis:

Reslotting – Review and assign pick positions for each SKU in an optimum location based on physical, handling, storage and demand. Some of these aspects change as often as every quarter.

Continuous culling of low-velocity items – There are many people who are actively involved in the work to add new items to your inventory, and generally no one has responsibility for getting rid of the dogs. Don’t wait until you are out of space. Move them to alternate locations away from the normal pick path, or dispose of them some way that gets them out of the warehouse.

Sizing the locations to meet demand – To obtain optimum use of the space, in those areas of the warehouse where location sizes are variable, consider resizing locations or changing the maximum inventory assigned to each location. This is particularly useful in repack locations where the cost of storage is the highest. I recommend keeping no more than one-week inventory capacity per SKU location (unless the items are very small)

Cycle counting – Counting and verifying the accuracy of your records for a portion of the inventory every week not only keeps the accuracy of inventory records more current, but also keeps the importance of this accuracy in the minds of all staff all the time.

If you have some additional processes that you do every week or daily, send me a note and let me know. I always look forward to learning.

Don Benson, P.E., has been consulting to retail, wholesale and manufacturing organizations for more than 25 years. His practice focuses on improving the effectiveness of warehouse and distribution operations. His office is in Oakland, California. He can be reached at [email protected] or 510-482-3436.

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Other articles in this series:

Improving Distribution Operations

Evaluating Vendor Shipping Performance

Improving Labor Productivity

Picking Document Design

Implement Cycle Counting

Inventory Storage

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