For every warehouse that exists there’s likely a method for managing the people and things inside it. But just because every warehouse is a little different doesn’t mean there aren’t some general guiding principles that should be adhered to.
To help you stay on top of your warehouse management and avoid any excessive, unnecessary supply chain costs, here are 11 common warehousing mistakes and how to avoid them:
Holding Excess Inventory
One of the most common mistakes across the industry is holding onto too much inventory “just in case.”
Whether you’re preparing for a big seasonal jump or you just haven’t yet mastered the fine balance between too much and not enough inventory, having too much inventory can lead to exorbitant extra costs that your business may not be able to absorb.
Having too much extra means you need to store more, increasing your storage needs and costs. It also leads to an increased chance of inventory loss through damage or, for perishable goods, spoilage.
To prevent your warehouse from holding onto too much extra inventory, it’s essential to thoroughly track your inventory levels and customer demand over time, keeping your inventory levels as low as possible without completely running out of individual products.
Using Paper
Technology has made the warehouse management industry much more efficient, but there are still some warehouses clinging to the old ways of doing things.
Utilizing paper processes for everything increases the risk of mistakes and missing paperwork. It also requires more man hours to manage all the paperwork and materials, causing your costs to balloon.
By switching even portions of your operations over to digital processes, you’ll increase your efficiency and accuracy, leading to an overall decrease in costs over time.
Not Optimizing Picking Paths
Just like a library, a well-organized and optimized warehouse floor makes it much faster and easier to find the products necessary when it comes time to pick an order.
Failing to optimize picking paths by not grouping items that are commonly ordered together in the same area, or just putting the dispatch area too far away from your storage, causes your manpower costs to skyrocket.
The slower your team is able to pick items and fulfill orders, the higher your picking costs go and the more you have to charge for products to make up the increase. By carefully planning your picking routes – with help from a warehouse optimization specialist, if necessary – you can increase your profit margins and increase your team’s efficiency.
Neglecting Goods-in Processes
In many warehouses, all the focus is placed upon increasing the efficiency and decreasing the costs of the process between customer order and shipping out the door, with little to no focus on the receiving end of the warehousing process.
Not paying attention to how your warehouse receives goods and manages stock until it is placed on shelves can lead to increased damage and waste, as well as continued inefficient picking paths.
If possible, it’s best to designate specific team members for goods-in tasks, with some trained extra hands put on backup for especially busy times. This will ensure that your goods-in team knows how to properly handle the receiving process, making everything easier and more efficient for your goods-out team.
Overlapping Shipping & Receiving Areas
When space is at a premium, it can seem a luxury to designate separate areas for shipping out orders and receiving goods.
However, not separating these areas at least in some way can lead to inefficiencies and mistakes that cost money.
On an especially busy day, for example, your team may accidentally put a set of just-received products right back out onto a truck for shipping, or they may place a picked and packed order back on the shelves. Either of these mistakes can lead to an incredible amount of delay and waste, and decrease overall customer satisfaction.
At minimum, designate opposite areas of your warehouse for goods to be shipped and those just received so that there’s little chance of cross-over. However, if at all possible, consider placing shipping and receiving in completely different bays of your warehouse so there’s little chance for confusion.
Sub-par Health & Safety Management
Just because your warehouse is clean and tidy doesn’t mean it’s necessarily safe. You could have shelves that are unstable and overloaded, waiting to tip at any moment, or your equipment could be dangerous.
Having strict health and safety policies and procedures, as well as scheduling routine health and safety checks, is essential to keeping your workers safe and decreasing accidents.
And, when accidents and near-misses do happen, it’s important to thoroughly investigate and analyze what happened, making any changes necessary to improve safety across the warehouse.
Inattention to Housekeeping
If your warehouse has messy loading docks, aisles littered with shrink-wrap and garbage, and overfilled pallets, it’s time to pay a little more attention to housekeeping.
Too much mess and clutter is not only dangerous, it can cause increased costs as your employees have to navigate the mess to continue doing their jobs. Or, if things are really bad, you have to stop all work just to clean things up to an acceptable level.
Rather than letting the clutter accumulate day after day, try designating a portion of the end of each shift to tidying up the warehouse. This keeps the clutter at bay while allowing the following shift to get down to their duties without delay.
Failing to Plan
What works now may not work in the future, especially if your operation grows. But not taking the time and effort to plan ahead for that potential someday can really cost you a lot in the long run.
If you’re not keeping up with the latest changes to the industry, or you’re not evaluating your processes to see where you can minimize inefficiencies, your business will suffer.
Instead, take some time, at minimum, annually to think about where you’d like your warehouse and business to be in the following year, and figure out what you need to do to get yourself there. Schedule quarterly or monthly reviews of your progress toward these goals.
Taking the time to plan for the future allows you to see opportunities and jump on them as they come up, helping you avoid a sudden panic period when you need to adapt and change your business operations.
Measuring the Wrong Things
Measuring data such as average time for order picking or amount of time products spend on your shelves is great, but if you’re not getting the whole picture – from receiving through shipping – you’re not going to notice the inefficiencies and expenses that could be avoided.
Understanding just what metrics are most important to your business operations is the first step toward collecting actionable data in your warehouse.
And once you know what metrics you need to track, it’s a simple matter of putting the processes into place to collect that data and then analyze it.
If you aren’t sure what type of information you should be collecting about your warehouse operations, consider hiring a warehouse optimization specialist or logistics consultant. Paying someone to spend some time figuring out what you should track and helping you set up your processes may be expensive at first, but it will pay off in the long run.
Ignoring Staff Training
Tight budgets and time constraints can often mean that your staff is sent out on the floor with very little training in safe practices. This can lead to injuries, inefficiencies, and added expenses.
Investing not only in a solid initial training program for all staff, but also ongoing training and development opportunities for your staff can help them become more skilled and invested in the overall success of your business. This can help your warehouse become more profitable and efficient, and decrease accidents and staff turnover.
Carving out time and budget each year to allow your staff opportunities for ongoing development and training will pay your business back tenfold, as it’s far less expensive to invest in training and development for existing employees than it is to constantly have to fill vacant positions.
Technology for Technology’s Sake
Utilizing technology is essential in the modern warehouse, but there is a point where too much technology is a negative.
Spending too much money on the newest, flashiest piece of technology a salesperson pitches to you, or investing in something that’s not going to work for your warehouse operations, means you run the risk of spending way more on that technology than you ever make back in its use.
Instead of just jumping on the latest gadget or piece of software, carefully consider whether you need everything that item claims to offer, and whether you already have something that works just as well.
Being smart about the technology you use in your warehouse is a key component to a well-run, profitable warehouse.
Warehouse Solutions on the East Coast
At Cannon Hill Logistics, we understand not all businesses are able to fully manage their own warehouse operations. That’s why we offer flexible, affordable warehousing and logistics solutions to businesses of all sizes, giving them the tools they need to become profitable. Call today for a customized quote!
