You Might Have a Bad Warehouse If... you have not done a physical inventory since 1923

Here is another good 'bad warehouse' story that's also just in time for Halloween, courtesy of Todd Smith, Vice President Global Supply Chain at ConvaTec, a $1.7 billion medical products company.

He writes, "My favorite bad warehousing story comes from my trip to Telecom New Zealand in 1994. The week before I arrived they had done their first wall-to-wall physical inventory of their main warehouse in a very long time. In the course of doing the inventory they discovered two very large wooden crates tucked away behind some racking. Unable to determine what the crates contained they opened them and discovered that each one contained a mint condition, never before assembled, 1923 Dodge pickup truck!"

"So now whenever someone complains about their item balance accuracy I tell them this story. I've seen some bad warehouses in my time, but only one that managed to lose two truck for 71 years..."

Sure, it's an extreme example. No way it could happen today with your robust WMS, right? This example contains a valuable lesson in this brave new age of warehouse management systems that use sophisticated software and camera systems, along with Optical Character Recognition (OCR) and RFID barcode devices to track and monitor inventory. It's too easy to depend too much on technology in place of a physical presence. There just might be items laying around or lurking in dark corners - there's your Halloween connection - that have fallen through the cracks, are not visible to the cameras, or simply can't be scanned because of packing or packaging error at some point along the supply chain.

If it's been awhile since your last physical inventory, it might be a good idea to schedule regular visits to the warehouse floor, especially before inventorying the inventory. Be brave and go where the camera lens refuses to go! You might be surprised at what you find.

Incidentally, Todd reports the Dodge trucks were sold for a tidy sum and the warehouse manager ultimately had a nice write up on his inventory value! It wound up being a nice treat! Maybe this will give you a reason to take a little walk on the wild side of warehousing.

I'd really love your feedback - and love your contributions to share more bad warehouse stories to help educate the industry 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 Benchmarking & 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 warehouse 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... You have to ask the lift truck operator (ALTO)

This bad warehouse example is brought to us by Noreen Ryan, Vice President of First Logistics. Noreen explains she first learned about the ALTO system for locating inventory when she was on a customer tour at a company that we will call Nameless.

During the customer visit, the customer asked how the company kept track of where things were in the warehouse and what sort of locator system was used. One of Nameless's quick thinking managers replied, "We use the ALTO system." That was the end of the conversation and the customer was satisfied. Later Noreen asked that manager how the ALTO system name came so quickly to mind. He replied that they really use the ALTO system. Noreen went on to ask how the system worked, and the manager replied, "It stands for... Ask Lift Truck Operator. They always know!"

Well the manager gets some credit for the quick thinking response but was also very lucky the customer, for whatever reason (not wanting to reveal ignorance, perhaps?) did not follow up with questions seeking more details about the ALTO system.

Maybe ALTO was the standard operating procedure for tracking and locating warehouse inventory once upon a time. That's certainly not the case anymore and relying on ALTO could get a company in a heap of trouble. These days there are literally hundreds, if not thousands, of real time location management systems available at various sophistication and price levels. They are available for any size business either in-house or through the services of your 3PL provider.

Knowing where your stuff is (and its quantities) at every point in the supply chain from supplier to warehouse delivery are crucial to visibility, efficiency and the bottom line. It's what warehouse management systems, from the basic to the most sophisticated, are all about.

The Warehousing Education and Research Council's Best Practice Guide can help you get started on your storage and inventory control journey, sans lift truck. Inventory is money, the guide stresses, and thus "you should keep track of inventory as you would money." When it comes to inventory control, "well-documented and defined processes are the foundation... processes should detail specific tasks and requirements," the Guide says. "The procedures should be the only way inventory is managed and transactions processed."

For starters, the layout of the storage areas should match the basic operation of the warehouse, whether it's adjacent to a manufacturer, a pure distribution facility or one that includes distribution and value-added services on site. Warehouse management systems will be designed to optimize current and future storage needs, product mixes and layouts, while minimizing travel times within the facility. Best practice companies have integrated the capability to track productivity in their warehouses and shipping processes by lot or serial number. A single system of record makes managing data throughout the chain easier.

The WERC guide adds, "Crowed, unorganized, and improperly or poorly-marked storage areas subject product to damage and are prone to inventory transaction errors. Inventory control benefits from good housekeeping and warehouse organization."

Some management systems are even free if you run a small warehouse. See WareSeeker.com for info on what's out there; There's no longer an excuse to use the ALTO system! In short, leaving it up to the lift truck operator will just never do.

I'd love your feedback - and would love your help in sharing more bad warehouse stories to help educate the profession on what NOT to do. 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 warehouse 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).

Thanks Noreen for your bad warehouse example and helping to make companies aware of bad practices. I was very glad to hear you report that your new company, First Logistics is using UBComputer.com and that it is very accurate and meets all your needs.