As a provider of unloading and support services for warehouses, we’ve seen the tunnel vision that can befall managers all too often. It’s easy to fall into the “business as usual” trap. When you’re busy working in the business, sometimes you need some outside perspective to be able to work on the business—to that end, we’ve compiled this handy list of reminders you can use to examine your warehouse operations with an eye toward profitability.
Problems with Receiving Efficiency
There’s a reason we lead with this signal of warehouse quality: the loading dock is the most important space in your warehouse operation. It represents the best opportunity for economies of efficiency, and when managed incorrectly, a bottleneck in the inbound supply chain which affects every other warehouse function.
Inventory Accuracy
When a warehouse is disorganized (in terms of management or actual stuff lying around), or when inventory is tracked on paper, accuracy problems can result. Inaccuracy in inventory counts means inaccuracy in shipping lead times, financial data, forecasting, and lowered customer satisfaction. Warehouses and DCs should have detailed, documented processes for inventory management, and should utilize software to ensure every unit is tracked from receipt to stocking or fulfillment. Consider implementing cycle counting, an easy-to-implement system of regular spot checks that can quickly identify problem areas.
Unpredictable Labor Costs
Are you regularly paying overtime wages for warehouse labor? It’s a scenario Costa Solutions has encountered time and time again. When employees fail to show up to work, or in times of peak seasonal demand, managing the costly labor force becomes even more onerous.
Overtime payments can quickly wreck a workforce budget and are hard to control for. In some cases, more detailed screening and hiring processes can produce more reliable workers. In other cases, partnering with a competent warehouse labor management firm can turn the workforce from a cost center to a competitive advantage.
Employee Turnover
Tying into the point above about screening, employee turnover contributes to scheduling problems and can leave a manager scrambling to fill in the gaps when they least have time for it.
In most cases, a company that compensates and treats its employees fairly enjoys lower rates of turnover. Labor is often viewed as replaceable, and folks who are looking for work are usually not in a position to negotiate wages. However, paying better than average and making the time investment in a culture of respect and safety will always pay off in terms of reduced turnover.
Product Damage
If your warehouse is experiencing losses due to damaged products, there could be several causes. It could be a people problem, where inadequate training about product handling means your units aren’t getting the TLC they need. Perhaps your equipment is out of date or needs servicing, causing mishandling issues. Even improper storage and stacking can contribute to product loss.
Ensure that all climate control systems and handling equipment are on preventative maintenance schedules. Worker training should include appropriate handling methods for all different types of stick, down to loading and wrapping pallets correctly. Make sure that shelving and storage aren’t overloaded, and above all, keep the warehouse as clean and well-maintained as you would your own storefront.
Safety Concerns
Has your warehouse suffered lost-time accidents or paid workers comp claims in the last 12 months? If so, hopefully you’ve made safety a priority and begun the serious undertaking of building a culture of safety within your organization.
Employee safety should be paramount in any manual labor situation. Proper permitting and training are the right steps with any new hire, but conversations and regular continuing education about safety should be in place. Make sure your warehouse management is setting the right example for workers and that no one, regardless of tenure or seniority, is “above the law.”
Quality First
If your warehouse is suffering from any or all of these problems, you’re facing a great opportunity to turn things around from “business as usual” and turn your operation into a well-oiled, profitable inbound machine.
Partnering with a company that includes all of the above in its standard operation procedures is another option, and selecting a qualified and experienced partner will save you money and improve your service to customers in the long run. If you’d like to talk through any of the issues mentioned here, drop us a line. We love talking shop.