You Might Have A Bad Warehouse…If The Cycle Count Doesn’t Add Up

 
This week’s Bad Warehouse comes to us from Gary Roghers, Logistics Manager for DuraTech Industries. A few years back Gary transitioned to a new position, managing warehouse and shipping operations.

“It was the time of year for our annual physical count. This meant that we had customer service reps, office assistants, purchasing agents, shipping personnel and even janitors counting parts for an entire weekend. Everyone worked really hard and we completed the count and did the adjustments by the end of the day on Sunday.

“The problem was that our inventory was a bigger mess after the count then before we did it. The reason was that we had people working in an area that they either didn’t understand or felt that this was just a good way to pick up some extra overtime hours.” The accuracy of the finished goods inventory was around 85 percent, and the goal was about 95 percent.

“We had to fix this problem and fix it soon,” he said. He met with his shipping and warehouse personnel to discuss ways to: 1.) Fix the mess and 2.) Prevent it from recurring.

Eventually, they decided that to do a recount with the process owners—“the people who have to live with the inventory every day and who have to make those dreaded phone calls when the counts on an item are off. This would solve the first problem.

“Then we met again to determine a path that would allow us to keep the inventory on throughout the year instead of having it on for a little while in January.” They decided to do cycle counting on a daily basis, and roll through the entire warehouse every quarter.

Under the new process, Gary says, “We have hovered right around 95 percent for the past five years.”

He adds that “without a barcode scanning system in place and customers ordering in less than full package quantities we have a huge job of counting and the team pulls it off every quarter. My hat is off to this great group of people that not only came up with the plan to fix our problem but implemented it almost to perfection.”

Gary and his team hit on the best solutions to cope with the situation. They also followed WERC best practice guidelines by installing a system to count inventory on a cyclic schedule rather than once a year.

The WERC guide says that most effective cycle counting systems “require the counting of a certain number of items every workday with each item counted at a prescribed frequency.”  The main purpose of cycle counting is to "identify items with on-hand quantity errors, thus triggering research, identification, and elimination of the cause.”

Gary wound up handling a messy problem by solving it “by the book.”

I 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’s A Moving Warehouse!

This Bad Warehouse item, courtesy of Catherine Cooper, EVP and chief information officer of OHL shows how scanning systems can backfire and cause chaos on the floor.

 

 

A little bit of knowledge about how WMS scanning and putaway systems work helped transform this warehouse in a short period of time from an otherwise orderly and organized operation to one with a big problem: product on the floor and empty racks.

Sorting it all out must have been a huge headache and a massive congestion problem. It was also a problem with preparation and sequencing. Rather than waiting for the sizing for the material to go into the proper location to occur, the workers short-circuited the operation by simply hitting a button and proceeding.

In this case the workers were able to circumvent standard WMS practices that feature putaway zones, staging and storage areas and final locations. The WERC Best Practices guide says the putaway process “is typically managed by one, or a mix of, these methods: staging product from the receiving area, based on the purchase order, based on the part number, or based on a putaway zone or by using direct delivery (putaway) to the storage location.” The guide continues:

“A putaway zone creates like groups, which may be defined by travel time (mapping out the warehouse storage areas), location of use (such as storage, replenishment, pick area, assembly area) or by product velocity. No matter how the zone is defined, the WMS assigns a storage location and a staging zone. The product is moved to the staging area for that zone to await transfer to the storage location. Staging by putaway zone uses less space, but requires a WMS that is capable of pre-slotting. Utilizing putaway zones will reduce travel time for lift trucks.”

The most efficient practice is to put away directly from receipt to final location. This uses the least space for staging, and product is handled less and ready for use sooner.

What happened at this warehouse was not what WERC contemplates for putaway. Using the warehouse floor as a general staging, storage or putaway zone had to create a nightmare of inefficiency!

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).”