You Might Have A Bad Warehouse If... You Can't Find the Package Under the Labels

Yes! Back by popular demand. More bad labeling practices. The photos below show good examples of excessive labeling – or should I say a case with excessive labeling! Steve Murray helped this bad warehouse understand the importance of taming their labeling.

In the photo, on the left, the original label applied by the vendor is the one under the orange dot and the bar code label, the one with “PRA #” at the top. The 3 other labels in the photo were applied upon receipt at the warehouse, and while the information on the labels may be of value, the fact that 3 separate labels needed to be prepared and applied is excessive. Believe it or not we have seen much worse examples, with some labels having conflicting information.

The second and third examples below show both computer printed and hand written versions of labels where the pink one tells the unit size of the SKU and the orange one give the receiving ID number and quantity received. Note how the handwritten version has the SKU number on both labels and a third round label with the count.

The Warehousing Education and Research Council recommends you work with your supplier to ensure that all required information is provided by them on a label they print and apply to the packaging before it leaves their facility. Where that is not possible, we recommend applying a single label during receiving which contains all of the required information. For example, in the first photo, the round red label with a “3” designate the day of the week when the product was inducted. If you need this visibility, simply use single preprinted labels with colored dots on them – you need the colored dot anyway, right? Right?

I encourage you to take a walk through your warehouse and see if you need to tame your labeling practices. Use the “5 Whys” method to question the practices used. If you are not convinced - stop and think about the actual costs of the labels and labor to apply all of them. Then multiply it by your annual throughput. If you find yourself with more than one label, I suggest you read the section on “Product Labeling” in the “Receiving & Inspection Warehouse Processes” chapter in the WERC Warehousing & Fulfillment Process Benchmark & Best Practices Guide, available from the WERC Online Store.

Another great source is my article on Ready, Willing and Label.

Lastly, I am sure the local representatives of labeling companies would be happy to give you an education session if you are willing to sit through a sales call. Companies like Zebra Technologies, Label-Aire, Primera Technology Inc. and many others are there to help provide solutions to support any size 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 perhaps 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 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 Use A "Double Protection" Safety Stock Strategy

This bad warehouse comes from Steve Symmes who regularly does warehouse assessments for Supply Chain Visions. During one of his assessments he revealed something we have never seen before – a “double protection” strategy for managing safety stock.

The company had an algorithm in their Microsoft Excel spreadsheet where they would calculate multiple safety stock layers each week for each Stock Keeping Unit. The first layer of protection was their "safety stock” level and the second level of protection was their “reserve safety stock” level. I asked Steve if the person who had come up with this “double protection” strategy had been watching a feminine hygiene commercial when they came up with their approach!

So what is the right approach for managing safety stock? It is important to assess the risk of disruption and actively manage the levels of safety stock. One company we worked with in Colorado would increase the level of stock for packing materials each winter, holding “snow stock” in case a snow storm closed the roads between their suppliers and the warehouse disrupting the twice daily replenishment of packing materials. Each spring they would lower the level of safety stock because the risk, due to snow closures, was gone. They appropriately and aggressively managed the safety stock level to the risk.

If I had my way, I would permanently ban the term safety stock from the vocabulary of today’s warehouse professionals. The reason? All too often some inventory analysts believe the more piles of inventory they have stashed away as safety stock the “safer” they feel. For all you inventory folks out there – please take this time to ensure your safety stock strategy has a purpose. Perhaps warehousing professionals might make better decisions if we called it “risk stock” and the focus would be on mitigating the underlying risks in a proactive manner.

For those wanting to learn more on setting safety stocks, I suggest the following resources:

• Start by reviewing the section on “Inventory Strategy” under “Storage and Inventory Control” in the Warehousing and Fulfillment Process Benchmark & Best Practices Guide, available from the Warehousing Education and Research Council's Online Store. 

• For a good review of setting safety stock levels read “Optimizing Safety Stocks” by Dave Piasecki of Inventory Operations Consulting. Just remember to focus your attention on the element of risk as described by Steve in the “Snow Stock” example above.

• Consider reading “6 Steps to Managing Risk” in Supply Chain Management Review, it is an excellent guide to understanding and preparing for supply chain disruptions.

• I would also suggest reading ”don’t look back” an article from DC Velocity’s Measuring Up column. The column focuses on looking forward rather than to history when planning your “Risk Stock” levels. The application of “leading indicators” will require greater insight into your marketplace, but the dividends will pay off in better balanced inventory levels.

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 perhaps 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 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).