3 Ways to Optimize Your Warehouse Outcomes

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1) Analyze and Enhance Your Stock-Turn

The term ‘stock-turn’ refers to the time required to turnover stock and can be used in the context of a single SKU or the entire inventory of a warehouse. A shrewd warehouse manager will frequently examine their stock-turn and endeavor to improve SKU’s that are not turned over on a regular basis. Often, businesses make the mistake of storing their idle SKU’s for extended periods of time, resulting in a diminished return. Typically, the most costly expense attributed to a failing product is the valuable warehouse space that it consumes and denies to other stock.

An example stock-turn: whilst we ourselves are delighted with a stock-turn in the vicinity of around 90 days, a client of ours had a store policy that declared that no product was to remain on the shelves for longer than 2 weeks. In the event that the SKU failed to sell within the allotted time frame, it was promptly removed and placed alongside other underperforming SKU’s and sold at a reduced price within the next week.

If the SKU had still not succeeded in selling at this sale price, it was returned to the original supplier whereupon a request for credit was made. If this request was not successful, the SKU was either donated or destroyed altogether. Such ambitious store policies resulted in a store-wide stock-turn of only 30 days.

2) Frequently Evaluate and Optimize Your SKU Locations

Understanding the reasoning behind the Pareto principle (also known as the 80/20 rule), named after Italian economist Vilfredo Pareto is vital to maximizing the effectiveness of your products. In the context of a warehouse, the principle dictates that 80% of total inventory is subjected to only 20% of warehouse activity, whilst the remaining 20% of inventory constitutes 80% of all activity.

Therefore, it’s essential that this 20% of high activity stock is positioned in a location that is easily accessible by store personnel and is in close proximity to receiving and dispatch areas. Beyond this, It’s wise to consider the most efficient method of stock picking for the 20%, while opting for a more cost effective storage solution for the lower activity stock.

3) Review Warehouse Activity

Although choosing optimal locations for warehouse SKUs should reduce the amount of redundant activities in the workplace, there is often more that needs to be done. Typically, there will be activity in some places of the warehouse that is either inadequate or wholly reckless. It’s important to initiate an open discussion with all parties to ensure that an ideal solution is reached.

Although a suitable solution may be reached, there are always better ways of improving the efficiency of warehouse operations, either by using superior equipment, employing more favourable work procedures, or both. It’s always a good idea to seek professional advice from industry experts when looking to streamline workplace processes and improve productivity.

The value of expert advice: one of our clients contacted us in an effort to improve productivity with a particular warehouse process. He was baffled as to why his staff were unable to complete a particular task as quickly as one of his competitors were able to. With the permission of his staff, he set up a video camera in an attempt to examine the process and discover why this was so.

After observing the footage, it was plain to see that there was far too much idle time; one staff member would be waiting for the other staff member to complete his task before he could begin with his. It clearly lacked efficiency and needed to be improved so he consulted us with the problem.

Through this, we were able to successfully collaborate with our client and come up with a viable solution that eliminated the amount of idle time, which dramatically improved the efficiency of the work process. Through our guidance, he was able to implement a new routine that guaranteed an even faster completion time than his competitor’s.

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