When most electrical wholesalers hear the phrase “customer service capabilities,” they think of their company's ability to quickly take orders, which are then usually filled completely from more than adequate inventory. The word “profits” almost always motivates people to think of price margins. Few people think about the impact their warehouse can have on customer service and profits — especially if they have an expensive software package. This article identifies the warehouse characteristics that can hurt your profits and customer service
Most warehouse planners and managers organize storage of items to minimize the labor effort needed to pick items; some people try to minimize both put-away and picking efforts. But that kind of organization can sometimes cause more errors than if the warehouse were organized other ways. Errors that can occur include picking a wrong quantity or the wrong item. Don't store very similar items (½-inch and ¾ -inch EMT connectors, for instance) right next to each other, even if separated by a metal post.
Receiving and QC
This is the place in the warehouse where many downstream problems begin. Some of the problems get caught before they hurt customer service or the bottom line, but the cost of detecting and correcting them can be quite high. You obviously must pay attention to the handling of receipts from suppliers. But receipts and related documentation for deliveries from your other locations (inter-branch transfers) need just as much care, because of the tendency to assume that the shipping location did it right.
One important item that can easily be missed is the unit of measure (u/m). Make sure the u/m used by the supplier is the same as that on the corresponding purchasing order (PO). This example of a receiving-related problem can also result in not buying enough — or too much — on the next PO, as well as promising non-existing stock to customers. Also, when handling customer returns that came back by truck, assume there are problems.
For wholesalers who perform in-bound inspection, one way to avoid problems is to automate the process. For each item requiring inspection, generate a checklist that clearly explains each of the inspection steps and the range of acceptance for each characteristic to be checked. Think of it as a work order that uses pre-defined text for each step. For each characteristic, capture data about measurements, inspections and especially about rejections. Inspections data should be regularly analyzed for trends so you can spot upcoming problems before they occur.
Think of this function as an integral part of receiving, not just a quick trip on a forklift or with a pallet jack or four-wheel cart. Experience has shown that more mistakes are made in this process than most people realize. Problems sometimes occur because the people putting away items are actually pickers who have been temporarily diverted from their main job and are under pressure to get back to picking and not hurt customer service. People doing put-away must be trained to record (on paper or electronically) all problems they encounter; warehouse managers must review documents annotated with problems, and computer-generated displays of reported problems.
This is the function where the greatest percentage of problems occur, even though many problems were set up by a mistake in receiving or put-away. Regardless of how picking is done — with paper or by radio frequency (RF) or voice-directed picking (VDP) — an important principle is to follow the system, even when it seems wrong. This is especially true for filling back orders. When an exception is encountered (a wrong item in a slot, or a substitution must be made and is allowed), let the system know about it. Record the exception on the related pick ticket or report it via a keyboard RF gun or VDP device. If pickers ignore exceptions or do what they think is right and not as directed, anarchy ensues. A mistake that should not be made but still occurs is when a picker sees an ample supply of an item, but the pick ticket shows that a portion of the quantity ordered is backordered and not to be picked because it is allocated to another customer.
A common problem in the shipping area is that the people who did the picking also do the quality control (QC) work and/or the packing. Sometimes, they load trucks, too. They don't catch their own mistakes, and shouldn't be expected to do so — even when using RF devices. As in picking, let the system know about exceptions. Unlike people who pick, people in this area should seldom if ever be allowed to substitute, because they usually are not knowledgeable, or may be covering the mistakes they made when picking. If time, manpower and packaging permit, perform a final QC check as a truck is loaded; even if the truck is doing a branch replenishment or inter-branch transfer. Make sure drivers are given correct manifests well before the truck leaves so they can check it against the cargo.
Cycle count carefully. Some wholesaler personnel spend a lot of time chasing down items and/or information to have an accurate daily cycle count. If they had chosen the right items at the right time of day, they would have spent a lot less time getting an accurate count.
Most important, do not change system quantity data without attempting to determine whether there was a discrepancy at count time and why. If time and conditions permit, recount the discrepant items. This sometimes reveals there never was a discrepancy, just a mis-stored item.
To achieve great performance in a warehouse, offer warehouse personnel an incentive if they meet or surpass a mutually agreed upon goal. One goal might be to do better than the 90th percentile of performance in the industry. Keep the place organized and clean. Two clichés that still matter in the warehouse are, “A place for everything, and everything in its place,” and, “Cleanliness is next to godliness.”
Take a cue from the Japanese and track the different kinds of warehouse errors, keep running graphs and post the graphs where all personnel — office and warehouse — can see them. Where possible, base the incentives on data that is graphed.
The author is a recognized expert on warehouse operations, management and technology for electrical wholesalers — but he does not sell computer systems or warehouse technology or equipment. Based on more than 30 years of warehouse experience, Friedman helps electrical distributors reduce warehouse errors and increase productivity; often through inexpensive changes to operations, management or technology. He is a contributing author to Electrical Wholesaling, and consults with readers. Call (847) 256-3260 for a free consultation about improving warehouse accuracy and productivity or visit www.GenBusCon.com for more information or to send an e-mail.