You Might Have a Bad Warehouse If…The Special Place Isn’t So Special

This week’s bad warehouse blog is one related to goods with receiving issues that create unnecessary and costly delays and backlogs.

This could happen at any warehouse because as it is fairly common. It happens when product comes into receiving, has some sort of issue—for instance mis-markings or damage—and thus is moved over to a “special place.” It’s not uncommon for it to take more than a week to clear the product from that special place and in some cases I’ve seen backlogs of up to three months.

That kind of delay can’t be tolerated in a best practice warehouse: it’s inefficient and costly for all concerned. It’s virtually the first thing out of the WERC Best Practices Guide’s gate—“the basic function of the receiving and inspection process is to take responsibility for the inbound material, validate the material received to the purchase order (PO), check for any damage to the material received and complete any required material inspections. Getting it right when you receive material will reduce headaches in downstream processes.”

Inefficiencies on the receiving dock mean extra costs, such as trailer detention fees, and there are also hidden costs from an organized receiving dock. The guide continues, “It is not uncommon that materials are lost or misplaced in the rush, that receiving transactions are not completed or errors are made, and in the confusion materials are moved when they should not.”

A temporary holding area for product with issues should be exactly that: temporary. It should not disappear into a special place because that will only create special headaches.

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 [email protected]. 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).”

You Might Have a Bad Warehouse If…The Returns Are Beeping at You

This week’s bad warehouse blog is an oldie but goodie that dates to the days, circa mid-90s, when pagers were all the rage. While the story may be old, it has lessons that apply today to the proper handling of returns, customer service and reverse logistics procedures in the warehouse.

A telephone company had started selling pagers to retailers. When customers had problems with their pagers and called the company, they were asked to mail the pager back to the repair center in a box. The flaw?  The telephone company – while it had a repair facility – did not have a returns process. It was used to leasing out its equipment as part of the phone bill.

When boxes started to arrive, the receiving department didn’t know what to do so they stuck all the returned boxes at the back of warehouse room. Eventually the site was filled with hundreds of boxes of customer returns.

Here’s the funny thing, and I don’t mean funny ha-ha. If you remember the pager era you might also remember that a quirky thing about them was that when a pager’s battery was going dead – it would beep. That meant that in this room filled with hundreds of boxes of returned pagers the beeps began – lots of beeps. A pager beep every three seconds or so, and there was literally no way to tell which box it was coming from!

The sad thing?  Yours truly was stuck managing a team of workers to sort through and clear through all the returns. Maybe that’s what called paying your dues but the beeping nearly drove us crazy. But actually the really sad thing was reading the customer letters in the boxes, some which had been sitting there for more than nine months!

The company obviously was at fault for not thinking and planning through the implications of the pager craze – like the returns and customer service issues that would naturally occur. Today, this would never happen in a best practice warehouse, one where sophisticated WMS and RMA (return to manufacturer) processes are in place to handle the returns side of a client’s business.

“Timely and accurate receiving transactions are critical,” the WERC Best Practices Guide says. “Incomplete or erroneous transactions cause inventory control issues and delay the movement of materials.”

Companies that have good to best practice operations “process all transactions in real time or at minimum the same day, making material available for use as a soon as possible.” This applies to returns and reverse logistics transactions as well. That way the beeps won’t drive you crazy and your customers won’t fall away.

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 [email protected]. 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).”

 

You Might Have a Bad Warehouse If… It Must Get Married to Survive

Yes you read it correctly. This particular installment is not so much about a bad practice as it is a really bizarre occurrence that happened right here at a Seattle warehouse last week.

The SeattlePI.com reported that Babylonia Aivaz married a 107-year-old warehouse at 10th Ave and Union St. on Jan. 29. Her intentions were honorable, if a bit wacky: She used the wedding to protest the demolition of the building in order to make way for the construction of an apartment building. By her way of thinking, marrying the building would save the warehouse from the wrecking ball and the gentrification of the neighborhood.

 

About 30 people attended the strange affair, which Aivaz said was a gay marriage because the building is a woman. This probably is more illustrative of the state of Babylonia’s mind than the sexual orientation of the warehouse, not that there’s anything wrong with a female warehouse! I mean, how many 107-year-old male warehouses are still standing?

The quips from all over poured in. One was that despite the couple’s differences at least the marriage has a solid foundation. And the Daily Mail said not to expect much on the wedding night.

But it would be a great space for the reception!

Coming up with a best practice to cover this situation isn’t easy. Or possible, really. Sometimes you just have to take a deep breath and laugh along with that old beloved warehouse.

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 [email protected]. 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).”

You Might Have a Bad Warehouse If…Your Inventory Count Is Too Good

This bad warehouse item from Gary King, founding partner and chief consultant at Business Fit Associates, tells us that when the inventory accuracy rate is always at 99.9 percent, it’s probably time to investigate.

As Gary explains it there was a 3PL that was known for bragging about a 99.9 percent inventory accuracy rate. “Me being one who is always in search of best practices, I inquired to the operations manager as to how they were able to maintain such a high accuracy rate month after month, year after year.” The man replied that it was a “trade secret” that allowed them to remain competitive and although many had inquired, he was sworn to secrecy.

Later in his audit, Gary came across a standard operating procedure that pertained to the 3PL’s petty cash process and noticed that "they kept an unusually high dollar amount in their petty cash."

When he asked the administrative assistant responsible for administering the petty cash why such a high amount was needed, “without hesitation she answered that 'when we come up short with our cycle counts, our cycle counters can run to COSTCO or wherever they need to go to buy product that were missing.'” Whoops! “And she added, ‘You should see how much money I have to give out when we do a complete inventory. That’s when my job gets really crazy!’”

She had no idea she had revealed the company’s big trade secret, along with a really awful inventory control practice.

That’s a SOP you won’t find listed in the WERC Best Practices Guide. An inventory control system must have well-documented and well-defined processes, and cycle counts are supposed to determine inventory accuracy and identify problems that need attention.

As the guide says, inventory is money and “you should keep track of inventory as you would money.” The reverse of that is just wrong – you should never use money to keep track of inventory by gaming the cycle count process to inflate accuracy rates.

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 [email protected]. 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).”

You Might Have a Bad Warehouse If…The Receiving Dock Is On the Second Floor

Let’s get the New Year off to a rousing bad warehouse start with something I personally witnessed, a two-story receiving operation.

The receiving dock in question had a second-story mezzanine. On its face this doesn’t seem like a very workable or efficient operation (and it wasn’t), but the rationale I heard for it was that the warehouse was “space constrained.”

But think about the result: Off the truck. On a pallet. On the forklift. Up to the 2nd floor. Off the pallet to receive. Back on the pallet. Back on the fork lift. Back to the main floor. It’s reminiscent of a Chinese fire drill!

Any best practice warehouse will have a steady and efficient flow into and out of the facility. It stands to reason that from a cost and efficiency standpoint the fewer touches, the better. As the WERC Best Practices Guide says, “some of the most valuable square footage in the warehouse is dock space.” It becomes much less valuable—and a logistical problem—if the receiving dock is upstairs!

The guide continues: “Docks in today’s warehouses must be more flexible and must support a variety of receipts that are coming in at a faster rate and in greater frequency and with just-in-time and VMI programs, smaller quantities and mixed pallets.” In addition, inefficiencies on the dock “cause extra costs from trailer detention fees, excessive trailer moves to support new arrivals or higher priority shipments, and in additional handling of materials on the dock.”

There are also hidden costs if a receiving dock is disorganized. Product or materials can be lost or misplaced in the rush, receiving transactions uncompleted, errors can multiply, and in the confusion materials are moved when they should not.

There might have been a good use for that mezzanine, say for storage, but not as a receiving dock.

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.

I need a fresh batch of your stories! If you've got an example of a bad warehouse practice, send me your story and photo(s) to [email protected]. 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).”

You Might Have a Bad Warehouse If…The Shifts Aren’t in Sync

During the holiday season we are all pressed for time and stressed about making it all come together – on time and on budget. Making it all come together on the warehouse floor has to happen every day, but often it’s not that easy.

For the final Bad Warehouse item of 2011 I want to relate a short scenario that can really cause stress, and expense, in the warehouse.

I witnessed a warehouse that had its receiving department working on a 6:00 am to 2:00 pm shift. This might have been an okay plan except that the inbound trucks at this site were not scheduled to arrive until after lunch each day, meaning that the receiving shift had to work overtime almost every day.

This is another scenario that should never happen in a WERC best practices warehouse. Perhaps the most vital and basic warehouse function is receiving. If product flow is not handled in a timely and efficient manner then the problems and costs will ripple throughout the site like a rock dropped into a pond.

The first section of the WERC Best Practices Guide is devoted to receiving and inspection.

“Dock best practice depends on the type of inbound you receive and for many companies balancing available dock doors, equipment and labor is difficult, so the receiving dock becomes a choke point in the supply chain,” the guide says. If the receiving shift is sitting around for seven hours waiting for the trucks, that is most definitely a difficult, inefficient and expensive arrangement.

Under Federal Hours-of-Service Regulations—which by the way are changing—pick-up and delivery times are counted toward the drivers’ on-duty time limits, another complication as this is not productive time for carriers. “Because of this, carriers are pressuring companies to improve their appointment and dock operations or transportation costs will increase across the industry to cover theses inefficiencies. Companies need to communicate with carriers and suppliers, this can and does take many forms, form phone calls and emails to web portals to integrated scheduling software.”

Most major WMS software packages include a dock scheduling module that companies can use as the main tool for dock management.

So get those shifts in sync for a Happy New Year!

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 [email protected]. 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).”

You Might Have a Bad Warehouse If…There's Too Much Stock In Obsolete Stock

Obsolete, lost or misplaced stock is a recurring problem in the annals of bad warehouse practices but logistics and supply chain consultant Susan Rider, owner of Rider & Associates, adds a special twist this week, noting that obsolete stock can lead to even bigger problems and questionable decisions.

She recently wrote that she visited a warehouse with “several thousand square feet dedicated to pallets and pallets of obsolete stock that hadn’t been touched in over three years.” She was asked to help the warehouse management design a new 250,000 square-foot addition.

You probably know what happens next because the outcome is fairly obvious, says Susan. “After talking them into getting rid of that obsolete stock there was no need to invest in the capital expenditure of a new building.”

It's okay to chuckle, but this type of scenario occurs fairly often. “Many times the VP of Supply Chain can’t convince the VP of Merchandising to let go of this old stuff. A business case developed to show the bottom line impact of storing obsolete inventory can open eyes,” says Susan.

This sort of situation should never arise in a WERC best practices warehouse. For one thing how it that stock—obsolete or not—can sit around collecting dust for three years? It’s almost 2012! Warehousing inventory control software makes it easy to keep product and storage data current and accurate.

Further, instead of examining how to optimize the space and floor plan—which at that point would identify the obsolete stock—the owners decided it was time to expand the warehouse.

The WERC Best Practices Guide says: “Regardless of the mission of the warehouse, best practice companies have designed storage systems to meet the needs of the current and planned mix of storage types. They have optimized storage locations and layouts to fit product without the need to restack or re-palletize it once received.”  

While most companies initially put a lot of effort into the layout of the warehouse, “industry surveys will tell you that as many as half the companies do not have an ongoing process in place to review their layouts.”

The guide continues that regular reviews of how storage areas are configured and having processes in place to reconfigure storage areas as product mix changes “is critical to maintaining high levels of space utilization and efficiency.” Simply making “continuous small adjustments to racks, shelving or other storage equipment can have a great impact on space utilization.”

If you do all of the above first, the need to build a costly addition probably goes away.

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 [email protected]. 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).”

You Might Have a Bad Warehouse If…A Salesperson Is Loading Appliances!

We all know about the necessity of multi-tasking in today’s business environment, but asking salespeople to pull double duty on the warehouse floor makes for a bad, and unsafe, warehouse in this situation related by guest writer Philip J. Reed, on behalf of HP Spartacote. (HP Spartacote manufactures high-quality, high-performance and eco-friendly industrial floor coatings.)

Philip writes that larger warehouses tend to belong to larger companies, and larger companies tend to have a “more rigid delineation” of employee duties. “Small businesses though, depending upon their nature, will sometimes have their own warehouses. And if there’s one thing we know about small businesses, it’s that a few people taking vacation time or sick leave can have a big impact on those left behind, who now have to pull double duty to get the job done.”

That’s the nature of business, and “it’s something we’ve come to accept,” he says. “But when “pulling double duty” involves a salesperson lifting and moving large appliances alone, unassisted, and without proper training, there’s a much bigger problem afoot.”

He knows of one particular business – which shall remain nameless – that not only allows this to happen, but implicitly requires it. Philip writes:

“The unfortunate person in question is a sales person for an appliance store, and if his warehouse crew is out of the building, it is up to him to pull the appliance out of the on-site warehouse, uncrate it, and often load it into the customer’s vehicle unassisted. If he doesn’t do these things, he doesn’t make the sale.

“Your mind should be reeling with the problems inherent in this situation. Without proper training, nobody should be in the warehouse at all, let alone lifting and relocating heavy items.  Even with proper training, nobody should be doing this unassisted. The potential for injury, damage to the goods in question, and, of course, liability should the customer attempt to assist the salesperson are enormous.”

As Philip concludes, “There’s no practice discussed above that shouldn’t be discontinued immediately!”

No matter the size of the warehouse, this flies in the face of WERC’s Best Practices Guide on housekeeping, training, safety, space utilization and warehouse management. For instance, I shudder to think about an untrained salesperson operating a forklift. A warehouse may look like a big space with stuff in it, but it is way more complex than that.

Philip says, “There are various ways to handle workforce situations that don’t involve salespeople endangering themselves for the sake of a sale.” For one thing, warehouse staff should be qualified, knowledgeable, and, above all, present during times of operation.

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 [email protected]. 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).”

You Might Have A Bad Warehouse If…The Invoices Are Hanging Out

Is it really possible that loose paper invoices could flap around a warehouse in the twenty-first century?

Well Tom Napier, Sr. Account Manager, Automation Division at PSI Engineering tells us that it is not only possible, it actually happened.

Tom recently wrote that on a site tour he noticed that there was a “large backlog of cartons at each of the 22 pack stations, so much so that extra personnel were stacking cartons upon cartons after a case taper, just before they reached the operators.”

When he wandered over to take a closer look at this procedure he also saw that for each of the full cartons, one per order, an operator was “taking the packing slip from the printer, folding it in half on the short edge, then stuffing it under the already taped flap, leaving a little bit hanging out, so the consignee could see that their INVOICE was in that carton.”

Later, Tom asked the distribution manager conducting the tour if they ever had any issues with their documents getting lost. As Tom relates, the answer was pretty much what you might expect: “He made a funny face and admitted that was a problem and sometimes caused delays in payment as the paperwork didn’t always reach its destination.” Tom adds, “I didn’t want to ask him if their customers minded that just about anyone handling their shipments could see what each of their customers was paying for the product.”

That’s not only a case of a highly questionable invoicing system it also takes the idea of transparency a bit too far for comfort.

The WERC Best Practices Guide notes the benefits of proper product labeling and identification, but the invoice itself should definitely not be a part of this process!

The guide says: “Good and Best Practice companies use electronic downloading and generation of shipping documents from the system of record. All documents and labels are produced by the system, including all export documents, shipping documents and labels based on customer specific requirements and governmental regulations.” Shipping documentation commonly includes the bill of lading, the commercial invoice, shippers export declaration, export packing list, certificate of origin, NAFTA certificate, and the export license. The idea that hardcopies of these documents would be taped to a shipping carton is almost unimaginable.

Thankfully, there is a happy ending to the story.

Tom noted that after his visit, “We ended up with a nice automation order about nine months later.”

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 [email protected]. 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).”

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

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 [email protected]. 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).”