If your distribution center is running at peak performance, congratulations. Keep up the good work. Chances are your company is enjoying the fruits of this success. Throughput is flowing flawlessly and the competition is running for the hills. Times are good.
But if you think your distribution center can run more efficiently, that throughput can still be increased, costs could still be lower and manpower better utilized, then here are 10 ways to improve your warehouse efficiency:
1. Gain an understanding of the current state of your distribution center. Let’s start with the basic premise, “You don’t know where you are going until you know where you are.”
This means you must first measure and capture all data relevant to your company’s operation. This would include labor expenses with overtime separated out, number of orders processed in a given amount of time, number of lines pulled by each operator, number of forklifts in operation during that time and the expense of leasing or operating each one, overall utility costs to run the distribution center and total cost per square foot of operating space in your facility.
2. Have a clearly developed customer service policy. The most important question you should ask yourself is “What is my commitment to my customers?” The answer could be as simple as: One hundred percent of all customer orders received by 4 pm will be processed and shipped to the customer as a perfect order within 72 hours.
In this case, a perfect order would be measured by its successful on-time delivery, with no damage and all documentation and labeling complete and accurate. Determine what is realistic and achievable for your organization and what will position you in front of your competitors. Develop your internal processes to achieve that high level of service.
3. Measure touch points. Measure and record how many times an item is touched from the time it is ordered until the time it leaves the building.
Look for ways to eliminate handling items twice, keeping in mind that every time an item is touched there is the opportunity for human error. For example: Instead of picking items into a tote first and then dumping them out on a table, only to be re-packed into a carton, why not pick items directly into the shipping box?
4. Business can start picking up when companies start looking up. Traditionally, companies tend to expand their operations laterally as they grow and the number of stock keeping units (SKUs) increases.
It’s easy to forget that your facility may have more available overhead space that can be utilized. By elevating some or most of the processing, packing or picking operations, use of free cubic overhead space may allow the distribution operation to extend the number of years within the existing facility. This bodes especially well from an economic standpoint for companies with favorable lease rates or those that own their building outright.
5. Gather data on the SKUs you currently have in inventory frequently. Slot your facility carefully to ensure that each SKU is mapped for the shape, weight and velocity of its particular use. Identify how fast the items move from a demand perspective, according to class and make sure the most active SKUs are assigned to locations closest to input/output points in order to maximize throughput efficiency.
Measure the dimensions and weights on all existing and in-bound SKUs. This can be accomplished accurately by using a CubiScan or other suitable measuring device. Knowing the volume of each SKU will allow you to slot efficiently, facilitate accurate check weighing, if appropriate, and accommodate current and future picking technologies.
The data also allows you to take advantage of the cubing features of most Warehouse Management Systems (WMS) in order to calculate the appropriate-sized carton to use for a respective order. The difference between using a larger and smaller carton when shipping an order may not seem like a high-priority decision. But a smaller carton costs less and reduces the dead space that usually requires fillers such as Styrofoam peanuts and plastic pouches.