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Warehousing: Best Practice

In any warehousing organisation – whether that’s purchased items being stored for use or resale, or manufactured items being stored for sale or distribution – there are a few things that should be considered best practice. In our last article we discussed how you can pick, pack and put away much faster, today we will discuss six areas you should focus on to ensure your warehouse is operating as efficiently as possible. 

Locations 

The first, most obvious place to start is location. That is, where your items are stored. Typically, as organisations grow and require more warehousing space (either in square footage or vertically), any new items that are added to the range are just given the next available slot to be stored. This makes sense from a growth and expansion perspective, but it does not ensure stock is in its ideal location.  

So, how do you know what ideal is? Those items that are consumed most often, and therefore need to be picked and packed most often, should be located closest to the picking and packing area. These items are the ‘fast-movers’ and it makes sense for them to prioritised in terms of prime locations to reduce the amount of movement, travel and transportation required.  

Information 

Linked to ‘location’ is ‘information’. Companies often lose time and capacity while warehouse operatives need to investigate where they need to go to find the appropriate goods. A very simple but valuable solution is to ensure that location information is crystal clear on any pick lists. It is also worth noting that, as discussed in our previous article, you should allow your pickers and packers to focus on the task at hand, therefore all preparation activities should be offloaded or take place outside of the key picking and packing windows.  

The other element of ensuring pickers and packers have all the information they need, is to make them aware of the orders you have received as soon as possible. Very often there is a delay from when an order is sent from a customer, to when the people in the warehouse know that they need to pick and pack it. This is the time it takes to receive and process that order. In many organisations there is a significant delay between when orders are received and when orders are made visible to the warehouse. So, make sure the order requirements are made visible to the operators in the warehouse as quickly as possible. 

Focusing Resources 

Resources who are picking and packing in the warehouses are often also responsible for putting away new goods when they arrive. Naturally, if they are putting stock away, they are not completing picks and packs. So, any putting away responsibilities should be scheduled for outside of the key picking and packing times. Usually this means either very early in the morning, or late in the afternoon once the dispatches have gone. Adopting this behaviour reduces the amount of multitasking and allows your people to focus on completing dispatches. In our other article, we explained how picking and packing should be completed in focused sprints and other activities should be scheduled outside of these – but especially outside of the peak packing times. For a more detailed explanation, please visit that blog post.  

Measures 

You need to be measuring the right things. Measures drive behaviours, and you want the right behaviours in your warehouses. So, what should you be measuring in a warehouse environment? It must be the number of ‘picks and packs’ completed vs. the number of ‘picks and packs’ required. An increase in the number completed would show you that your team is being more productive; a decrease would show that something is stopping you from completing more orders.  

Another important measure looks at the ‘putting away’ element of warehousing. As mentioned in the point above, you should be putting away deliveries outside of the key picking times to maximise the output of picking and packing. However, you don’t want stock sitting in the aisles for too long so another good measure, is to create a clock that states everything is to be put away within an acceptable period of time – usually within twenty-four hours. So, there are two important measures to implement: ensuring ‘pickers and packers’ are focused on the right things during the key picking windows and making sure that ‘putting away’ is not left until the end of the week so it builds up and builds up.      

Organisation of Arriving Deliveries 

Following on from the point above is the organisation of goods that are scheduled to arrive at your warehouse. Warehouse operators are often very aware of when goods need to be dispatched. They are often not as focused on ‘good’ scheduling for the arrival of new goods. The logic is that: if you do not want your picking to be interrupted in order to put recently delivered stock away, then you should arrange for new goods to arrive as late in the day as possible – outside of the key picking hours. 

What Other People Can Do to Help 

What can other people in your organisation do to help? If the amount of revenue your business generates is determined by the volume of completed orders you have successfully picked and packed, then staff should be crystal clear that every order should be picked on the day it has been set to be picked. So, if you are in a situation where, especially at peak times, there are several orders which are not getting picked on time and are missing their dispatches, it is hurting the company’s Throughput. During those times, it is worth encouraging everybody, regardless of role, to come and help picking and packing for a short period of time. So, get your Salesperson, your Line Manager, even your Financial Director to muck in! Help them to understand the impact to the business’ profitability picking and packing has. Then, when they see that an order isn’t going to be completed that day, they will do their best to help you get it out of the door! The higher the completion of picks, the more money your business will make.  

Goldratt UK work with warehousing organisations to help ensure they are operating with best practice, have happy customers and ultimately, are as profitable as possible. If you feel you could benefit from further advice, follow our Linkedin for further blog updates and case studies detailing our warehousing implementations. 

By Phil Snelgrove, Lauren Wiles