The old adage is nothing happens until you get a sale, but in the warehouse, nothing happens until you receive the goods!
When putting in new systems customers have told us that they "must" allow inventory to go negative because they can't receive the goods in the system before they ship. Negative inventory is not doesn't exist, you can't count it, and all it does is reinforce bad processes. Proper goods receipt practices are the starting point for your inventory optimization and warehouse efficiency. Supported by good systems and training for your people implement the following three steps and see your goods receipt efficiency increase:
Step 1: Ensure Unit of Measure Clarity
When goods arrive at your warehouse, they are most likely packaged in a box or pallet that is different then the unit of measure at which you stock or sell the items. Unit of measure clarity refers to knowing what an each is! Is a box one unit or does it really contain multiple boxes inside? How many are inside a box?
Step 2: Clarify Receiving Processes
Do your receiving personnel know what is coming? In most warehouses this question has an obvious answer, but how often are there differences and what happens when discrepancies arise? Tracking supplier accuracy and having processes that ensure that credits don't fall through the cracks can increase profitability.
What steps are to be performed when good arrive at the dock, and do they change based upon the type of inventory? Procedures may vary based upon volume, potential for damage, perish-ability, or track and trace requirements. The more varied the warehouse the more training required for your staff.
Alternatively, warehouse management software with intelligent receiving, automated directions for goods verification, bar code scanners and other tools can ensure accuracy and/or regulatory compliance.
Step 3: Organize the Warehouse for Pick Pack and Put Away
As most distributors are sales oriented, the focus of warehouse organization initiatives are often focused on pick and pack to fulfill orders. Although the volume of filling orders typically far exceeds receiving activities, put away is also key to distribution efficiency.
There is no one "best way" for organizing your warehouse floor because all warehouses are not shaped the same and product sizes, shapes and storage requirements vary.
- Does your inventory require regular or specific inspections?
- How expensive or constrained is your physical space?
- Do you specifically identify locations for products or do you dynamically assign based upon availability?
- Do you have separate receiving and shipping bays?
Software (like SAP Business One) can provide data for decision making and technology (bar code scanners) and can enhance your team's efficiency and accuracy.
Profitability in distribution starts with effective procurement practices, but requires efficient warehousing practices. Warehouse operations start with and require an organized receiving process. Process-oriented operations supported by modern technology can improve efficiency that goes straight to your business’ bottom line.
For more tips and tricks, download our free e-book Solving Top Problems in Distribution read the blog and download the e-book on 7 Tips for Getting the Most out of Your Warehouse or read the blog post on Optimizing Your Warehouse Floor. To get started contact an SAP Distribution expert at 678-401-6244 or fill out a Contact Us form.