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You Might Have A Bad Warehouse If…Time and Inventory Stand Still

By Kate Vitasek | 10/31/2011 | 5:00 AM

Keeping track of your inventory is essential, especially if you wind up paying for it to sit around the warehouse for five years(!) as Tom Freese, principal of Freese & Associates Inc. relates in this week’s bad practice story:

 

 

 

Talk about an easy revenue stream for the public warehouse! Not only were the calendars outdated and useless, as Tom notes, they were out-of-sight-out-of-mind. Shame on both sides for allowing this to go on for five years. The paper company lost track of its inventory or just forgot all about it and wound up paying through the nose to the public warehouse, which obviously had no vested interest other than to collect the monthly check from the company.

This is a costly mistake and unfortunately one that happens all too frequently, but it is also avoidable. In the case related by Tom it’s absolutely incredible that it went on for as long as it did.

Care should be taken when choosing a public warehouse – I’d advise picking one that’s reputable, and that has a basic, working inventory control system. There are many great public warehouses out there – but also some bad ones. One way to differentiate is to ask your potential service provider if they are certified under WERC’s Warehouse Certification Program.      

As the WERC Best Practices Guide says, “Inventory is money,” so keep track of inventory as you would money. The basic activities surrounding inventory control should include well-documented and defined processes, regular cycle counts, metrics to measure the accuracy of inventory activity (or inactivity), properly marked storage areas and a single system of record.

Most important is the right company mindset. The guide says, “Just like customer service, safety or quality, inventory accuracy must be seen as every employee’s responsibility, not just the responsibility of those who perform inventory transactions. All levels of the organization should promote it and support it.”

Finally, if you are the customer, never lose sight of your inventory!

I really love your feedback - and love your contributions to share those bad warehouse stories to help educate the profession on what NOT to do, and maybe what to do if you’re not doing it.

If you've got an example of a bad warehouse practice, send me your story and photo(s) to Kate@scvisions.com. If I feature your example in one of my blogs, WERC will send you a free copy of the WERC Warehousing & Fulfillment Process Benchmark & Best Practices Guide (a $160 value).

Your submission can be anonymous if you like so you don't get your boss or company in trouble! I'll be collecting examples all year and the winner will receive a free WERC Warehouse Certification Assessment by Supply Chain Visions, a $10,000 value. The runner up will win a free conference registration to the WERC conference (a $1,375 value).”

 


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About Kate Vitasek

Kate Vitasek

Kate Vitasek is a nationally recognized innovator in the practice of supply chain management. Vitasek is founder of Supply Chain Visions—a boutique consulting firm specializing in supply chain management. She is also a faculty member at the University of Tennessee's Center for Executive Education. A prolific writer, Vitasek has authored the Council of Supply Chain Management Professionals' best-selling mini-book series, Supply Chain Process Standards, and has contributed to other management books as well. Along with Karl Manrodt of Georgia Southern University, she co-leads WERC's popular annual benchmarking study.



About Steve Murray

Steve Murray

Steve Murray is a Principal Consultant and Chief of Research for Supply Chain Visions, a boutique consulting firm specializing in supply chain management. Prior to joining Supply Chain Visions he held a variety of functional and management roles in the distribution and manufacturing sectors, including 15 year managing an IT consulting firm. Steve has been instrumental in development of the Council of Supply Chain Management Professional's "Supply Chain Management Process Standards", the Warehousing Education and Research Council's Warehousing & Fulfillment Process Benchmarking & Best Practice Guide" and the WERC "Warehouse Certification Program". He is lead auditor for the WERC's Certification Program.



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