Warehouse Operations : A Real Turnaround Story 2021
Sharing a real life story of warehouse operations which was turned around and improved on all key service metrics.
There was large sized warehouse for storing finished goods and operations were not in good condition. Stock dispatches were not accurate, no cycle count activity, system vs physical stock was not matching and trucks loading and unloading used to take many days. There was only one Material handling equipment which if gone to breakdown would stop entire operations.
On top of it, Warehouse management system was there for namesake and when investigated it was found that it was not working since beginning. Pick lists were generated manually from stock sheet and no First Expiry First Out was followed leading to obsolescence.
There was lack of discipline in workforce. Manpower was not easy to control and used to come at work at their own convenience. Absenteeism was high and people morale was down. There were stories in the area that trucks going to this warehouse may take ages to unload.
Four warehouse managers have changed in last one year summarized the entire story. Third Party Warehouse owner who was successfully running many other warehouses was not even able to figure out what and where the problem is.
I was assigned the responsibility to manage this warehouse and looked forward to the challenge. Fortunately, after some time Third party warehouse owner hired new Vice President to supervise national operations and he had good experience in managing warehouse operations.
After my first visit to the Warehouse location, one thing was clear that situation was alarming and if required actions not taken immediately, warehouse operations are going to worsen further.
We run through the operations end to end and took the actions in each of the key aspect of warehouse operations i.e. Inbound operations, Stock Management and Outbound operations and improved the warehouse customer service within three months
In Inbound operations, stock were counted accurately at the time of unloading by unloading supervisor but while entering the quantity in the system, errors were made by the system person and numbers were not uploaded correctly. There was no crosscheck on the quantity entered into the system by the supervisor.
New process was established that after stocks unloading, goods to be counted accurately in staging area and then moved to storage location. Good receipt in the system was done by operator and then signed and checked by the supervisor to ensure 100% Inbound accuracy in both system and physical quantity. Inbound containers were slotted and scheduled so as not many trucks arrive same day which facilitated timely unloading and smooth warehouse operations
Another area was stock management. 100% stock count was initiated by independent auditors. Stock discrepancies were identified and taken up for correction. It was a tough discussion with warehouse owner as he had to bear the cost for missing inventory.
During the process, what was also figured out that there was an adjacent warehouse and whatever SKU was identified with stock discrepancy was shifted to mother warehouse. Rather than addressing the problem at its origin, it was shifted to other location. This practice was stopped with immediate effect.
Cycle count was initiated on daily basis to proactive identifying stock mismatches, doing root cause analysis and fix the gaps immediately. Cycle count report was circulated to large stakeholders on daily basis. All these actions improved inventory record accuracy from 89% to 99.9 %
In outbound operations, dispatched goods were picked from the warehouse and directly loaded in to the truck. There was no cross check on SKU and quantity loaded. Process was initiated to count the goods in staging area before loading to ensure loading accuracy.
Balance stock check was done to ensure that correct goods are loaded. counted in the staging area before loading and handed over to transporter on count basis. It reduced any discrepancies received at the customer end significantly and improve delivery efficiency
To improve productivity, activity requirements were worked out and available manpower resources were mapped for end to end warehouse operations. Excess manpower was reallocated to bottleneck areas to improve output. An additional crew was recruited to strengthen and increase throughput of loading and unloading operations.
A new warehouse manager was hired who had better understanding of warehouse processes and demonstrated capability to provide solutions and solve problems.
With these actions, there was significant improvement in all the key performance metrics ensuring excellent customer service, high dispatch accuracy, stocks and inventory match , timely trucks unloading avoiding detentions, uplifting team morale and improving overall warehouse operations.
To summarize what it took to turnaround warehouse operations was strong understanding of warehouse processes and systems in inbound, stock management and outbound operations, diagnosing the problems, root cause analysis, full involvement at the ground level, leadership commitment and trained employees.