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You Might Have a Bad Warehouse If... You have to ask the lift truck operator (ALTO)

By Kate Vitasek | 10/12/2009 | 6:00 AM

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.

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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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