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

By Kate Vitasek | 10/26/2009 | 9:54 AM

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).

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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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