The 7 deadly sins of warehousing

The 7 deadly sins of warehousing

The ultimate goal of any distribution center is to optimize operations while preserving productivity. Logistics consulting firm Distribution Design Inc. (www.distdesign.com) offers the following absolutions for companies guilty of committing any of these seven deadly warehousing sins:

Suboptimization
Avoid making operations as a whole suffer in order to optimize one process. View distribution center operations as two separate processes: inbound and outbound. Use activity-based costing — order picking, weight checking and putting away — to determine costs for each activity and cost ratios.

Improper planning and ineffective use of space
Use as many rack positions as possible. Very dense storage may not be the best option since productivity declines at maximum space utilization. Plan according to the Warehouse Education and Research Council (WERC) (www.werc.org) pallet storage selection system process for creating travel aisles and good dock access.

Having supervisors spend too much time with routine clerical and firefighting tasks
In doing so, they miss the opportunity for real time understanding of picking, packing and shipping processes. When supervisors aren't on the floor, they run the risk of not noticing things like RF terminals needing repair, lift trucks requiring service and similar tasks.

Having too many metrics, or not enough
Accountability can bring better results, but warehouse metrics must be aligned with those in the supply chain and should consider financial indicators, productivity, quality and cycle time, shipping and inventory accuracy.

Poor warehouse layout
Productivity is lost when workers spend too much time traveling, searching and over-handling products. Evaluate value-added services and set up special locations for operations like labeling, repacking and customized handling. The aim is network flow optimization.

Ignoring velocity principles
Often cycle counts are based on dollar values that have nothing to do with frequency. Look at SKU velocity across the curve to help determine if there is overspending or if volume is too low.

Lack of real-time information
In many facilities, order allocation is based on old news. Web-view order status for customers is rare. There is often a struggle to ship rush orders in a short time period, with packers only knowing what a box should contain by looking at the pick document.

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January, 2004

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