10 February 2022 Managing a warehouse is not an easy task. It requires planning, strategy, efficient execution, and meticulous monitoring to make changes and stay on track. The manager is responsible for ensuring that all processes occur in the most organized and efficient way possible. Despite the good intentions and commitment of leaders, there are some common mistakes that are sometimes made without realizing it. Such failures can affect the speed, efficiency, and productivity of a specific operation or the entire chain of processes connected to it. And the big problem is that, in most cases, these errors are identified during or even after the completion of a process, making it too late to reduce the damage. Therefore, the best way is to know in advance the potential challenges and obstacles that may arise in the operation, in order to prevent them and ensure warehouse efficiency and business profitability. In this text, we address the five main mistakes and present tips on how to avoid them. Take a look at the topics below. 1 – Inefficient Inventory Management An order arrives at the warehouse, and when the operator goes to pick it up, they find the shelf empty. This situation, the famous stockout, is still common in many operations. On the other hand, there are also those with full shelves, without merchandise flow (excess stock). Both scenarios are harmful to the company, causing the loss of a permanent customer or financial losses. Another common situation is the absence of periodic inventory counts (cyclical inventories), which greatly affect accuracy and prevent the manager and their team from making important decisions for the company. Stockouts and excess inventory are more frequent in 100% manual operations, where people are responsible, for example, for defining the right time to replace products, where each merchandise will be stored, when products are moved between areas. In these cases, errors can occur that prevent maintaining the ideal stock level of each item. Regarding counting, if done sporadically, it prevents identifying discrepancies in time to address them. How to avoid: The problems mentioned above can be solved by deciding to implement a WMS (Warehouse Management System) in the company, which offers full support for effective inventory control. This happens because the system tracks the product from the moment it arrives at the warehouse, defining its address and recording all movements. By recording everything in the WMS, it can automatically control stock levels (minimum and maximum stocks), send notifications, and, when necessary, generate automatic replenishment and stock rotation activities, to always keep the picking areas supplied. Regarding stocks, with WMS, they become periodic, integrating into the production routine without affecting process performance. Remember that experts recommend conducting counts every three weeks or two months, depending on the size of the warehouse. And, if a discrepancy is found, it is advisable not to focus solely on its solution. It is important to delve deeper to investigate its origin and solve the problem. 2. Poor Space Utilization/Inefficient Layout In a previously published text, we showed how important it is to periodically review the warehouse layout. This is because, over time, space needs change based on, for example, SKU diversification and/or increased sales volume. In many operations, this review is still not a priority. It is important to highlight that the warehouse layout can favor or hinder operations, in addition to affecting storage space utilization. The more optimized the layout, the greater the speed and accuracy, as well as, of course, intelligent use of every m² of the warehouse. Therefore, neglecting the layout is a mistake that needs to be addressed. How to avoid: When reviewing your layout, try to maximize the use of physical and vertical space, leaving enough room for employee passage. It is also important to look for ways to use automation and acquire equipment that helps reduce labor costs, improve product accessibility in the warehouse, systematically classify inventory, and ensure products are stored safely. Some tips: – Rely on technology that can help you organize your warehouse layout, such as the WMS system. You can also consider an automated storage and picking system (e.g., shuttle, pick-to-light, voice picking). In addition to improving the speed and efficiency of processes, these machines can help you save storage space. – If you are not ready to upgrade your technology, start simply. Use the inventory and sales management system you already have in your company to find out which items sell faster. Then, make sure to store these items in the most accessible locations so they can be retrieved and stored more quickly. Try to correctly follow the ABC Classification and organize the layout considering both the movement of products, people, and equipment. 3. Safety Defects Are there signs for pedestrian traffic? Can people travel without the risk of collisions between themselves and machines? Are your forklift drivers trained to perform their work? If some of these questions do not have positive answers, it is a sign that worker safety may be lacking. And the truth is that in some administrations, bottlenecks still exist, and the company pays for them with higher contingent costs and litigation. How to avoid: The definitive answer is regular risk assessment, followed by preventive and corrective measures. It is extremely important to follow health and safety guidelines for warehouse workers, avoid accidents, and maintain a healthy and productive workplace. 4. Not Measuring Operational Performance Many warehouse managers still fail to establish performance indicators (KPIs) and measure their operations. They focus on solving daily problems and leave the evaluation of numbers in the background. And that’s when they are doomed to remain stuck in the cycle of errors, unable to distinguish whether the operation is truly productive or not, and they will never know where and how to improve. Some important questions: Are you aware of how much it costs to perform basic warehouse processes such as receiving, storage, picking, packing, and shipping? Do you know the average execution time for each of these operations? What is the yield rate? And who are the most productive and unproductive employees? If you still have no idea, we strongly recommend monitoring these and other important parameters. Remember this maxim: you need to know where you are before moving forward. Therefore, monitoring the operation is essential to improve it. How to avoid: Rely on tools that allow you to measure the performance of intralogistics processes. In today’s technological environment, closely monitoring every phase of the operation is no longer a complex task. The WMS system is equipped with a database that stores all information, being able to provide real-time metrics, both on mobile devices and on monitors strategically positioned in the Distribution Center. In this way, not only you, the manager, can monitor task performance, but also employees, allowing them to self-manage and avoid errors and delays. The software also has configurable KPIs, in line with your company’s strategies. Define which metrics are essential for your business and make sure to monitor them periodically. 5. Ignoring Technological Advances Are you still managing loads and inventory with paper and pen? If so, you might be creating space for a multitude of errors. More: if you think your warehouse doesn’t need technology because it is small or because it manages few references, for example, you are hindering business growth. Failing to adopt technology and failing to collect and analyze data not only causes unnecessary inefficiencies but also makes the company less competitive, as it is unable to follow trends and respond promptly to market and customer changes. How to avoid: Basic tools such as the WMS system, barcode readers, portable printers, business intelligence panels, and conveyors, for example, can help you digitize your warehouse, achieve efficiency, and automate key processes. Even if you cannot invest in automatic systems now, start by implementing the mentioned tools, and you will realize that the ROI will far exceed the costs your business generates because it lacks technology and relies entirely on manual work. Remember: technology is an ally of successful companies, as it has a significant influence on achieving concrete business results. 5 Mistakes You Might Make in Managing Your Warehouse Deagor WMS per ecommerce può aiutarti!