Affordable Distribution Management

Jan. 1, 2004
By Don Benson, P.E. There are always ways to improve distribution operations. Some changes require an investment of capital, and some just time and energy.

By Don Benson, P.E.

There are always ways to improve distribution operations. Some changes require an investment of capital, and some just time and energy. This column will offer a series of suggestions I have implemented in many warehouses and distribution centers, large and small, that will improve the productivity and performance your people and equipment without the investment of capital.

In this series, I will describe a common issue, how a specific change can address that issue, briefly describe the method or procedure, and offer some general direction about how you can begin implementation. I expect that some suggestions may not apply for you, or have been already implemented in your operation. For those I offer congratulations and I invite you back for our next column. Some readers may want additional information. I can be reached at [email protected], will respond directly, and may include your questions or suggestion in subsequent editions. My objective is to offer suggestions and encouragement recognizing that the best performing operation is one that is continuously improving.

Receiving – Create and use an Out-Of-Stock Report

An important business objective for most companies is to improve inventory turns, to minimize inventory investment while not missing sales or stopping the production line for being out-of-stock. This is a challenging objective. Missed sales may reduce revenue and damage the relationship with your customers, and stopping the production line is very costly. We all know that this does happen. While Buying/Purchasing and Inventory Control personnel bear most of the responsibility for inventory levels, Receiving can also play a role in reducing the impact of out-of-stock situations.

If Receiving knows what merchandise or materials are out of stock, they can reduce the impact of the situation by expediting these items through the processes of receiving, stocking/put-away and posting to the on-hand inventory. Expediting can include scheduling an earlier time in the day for receiving at the dock, shifting personnel and other resources to unload one vehicle before another, checking-in one order or part of one order before another, and posting the item to the inventory when it is put-away rather than in a batch at the end of the day.

But first Receiving needs to know which SKUs to expedite. I suggest the Receiving Supervisor/personnel meet with Inventory Control or Purchasing to create and discuss an Out-of-Stock Report, and use it to expedite movement whenever possible. In my experience this effort will improve sales and production performance, and often contributes to building a stronger relationship across these three departments.

In the next newsletter, I'll talk about evaluating vendor shipping performance.

Don Benson, P.E., has been consulting to retail, wholesale and manufacturing organizations for over 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.

If you would like to subscribe to our bi-weekly newsletter, Material Handling Management News, please subscribe here.

Other articles in this series:

Improving Distribution Operations

Evaluating Vendor Shipping Performance

Improving Labor Productivity

Picking Document Design

Implement Cycle Counting

Inventory Storage