February 24, 2009
If you invited a youngster to come into a warehouse and play Hide & Seek, they would undoubtedly find that little nook where you would never think to look. Think about your inventory as the “Hider” and your employees as the “Seekers”. If you’re not fully automated, this game could go on for quite awhile. A WhereNet study of warehouse operations showed that personnel do at least one inventory search each day, at an average of 10 minutes per search. Ten minutes. That’s not so bad, right?
But if you figure that each employee spends 10 minutes per day (and we know that number is very conservative), five days a week, for 50 weeks a year, you’ve wasted almost 42 hours per employee. So, you’re basically giving away a week’s worth of productivity. If the average weekly pay for one employee is $1,000 and you have 40 employees, then this problem is costing you $40,000 per year in wasted man-hours. And, as I said, those are conservative estimates. In some cases, your employees are taking up to an hour to locate items for picking.
Do you really want to pay $40,000 a year for a game of “Hide & Seek” in your warehouse? As much as I like games, I’d rather show you how much fun an automated asset management system could be!
February 23, 2009
How much are you investing in order picking? In 2007, as much as 55% to 65% of typical warehouse operating costs were attributed to this labor-intensive process. To get more specific, industry sources indicated that $9 billion was spent annually on picking by warehouses across the U.S. alone. And a significant portion of that money—about $75,000 annually per warehouse—can be specifically attributed solely to the cost of paper picking labels.
In an environment that has grown more and more eco-friendly, you have to wonder how you can limit the paper trail and reduce the carbon footprint. When it comes to order picking, there IS a better way.
Voice-picking—which equips employees with headsets and wireless computers—uses speech recognition and speech synthesis to allow for communication with the Warehouse Management System. The order picker is guided by computer-generated voice that identifies the items, tells the picker where to find them, and confirms product numbers to dramatically increase accuracy — and all without the need for paper! Printing and distributing picking lists and labels becomes obsolete, as well as keying in picking confirmations, picking amendments, and catch weights. In all: less waste, less cost, and a cleaner, safer working environment for your employees.
As well as improving efficiencies, voice-picking may a first step toward reshaping your warehouse to be more environmentally friendly. How would your warehouse—and employees—function without the cost, administrative demands, and waste of paper?
February 17, 2009
As an employee, down-time is a welcome break — an excuse to take it easy. From the employer’s perspective, this is money being wasted away. Now, I believe in taking care of your employees and breaks are definitely a necessity to ensure maximum productivity, but the adage “time is money” is never truer than in your warehouse operation. Down-time means orders aren’t being processed, inventory isn’t being managed, and your business is slowing down. Spend a few hours in your warehouse and look at how your employees spend their time. Are they:
Trying to locate inventory?
Matching numbers from the orders to the boxes?
Calming down customers whose shipments were wrong or late?
Typing in product numbers and carefully rechecking each keystroke to make sure there are no errors? If not, how much time is spent fixing those mistakes later?
Walking back and forth to get paperwork?
And here’s the big one…
Complaining about how long it takes to get out these orders?
While you’re watching this activity (or inactivity, as the case may be), make a list of the problems you need to solve in order to make the most from your warehouse team. Then contact me, because I guarantee I’ve got some solutions for you!
February 16, 2009
Your distribution center should be in the business of fulfilling orders and getting them out the door to your customers. Unfortunately, those shipments aren’t the only thing heading out your door. You’re probably also sending away profits. If you haven’t brought an automated asset management system into your warehouse operation, you’re putting an unnecessary squeeze on your profitability.
Incorrect picking. What happens when a customer receives the wrong quantity or item? You have to absorb the cost of return shipping or let the customer keep the unwanted product. Either way, it’s a waste of time and money.
Delays. When a warehouse isn’t automated, it can be difficult to find the inventory. Studies show that it can take up to half an hour to find a misplaced item. That means fewer shipments in a day. If you could process more shipments, you can increase your sales volume without adding staff. That equals increased profitability!
Wasted man-hours. The paper trail can have a detour. Labels, orders, or other paperwork get lost in the warehouse. Your employee has to take the time to wander back to the printing station and regenerate the order or label. Sound familiar? Or your office staff is spending time tracking down lost shipments that weren’t barcoded so the process is time-consuming. Wouldn’t it be better for them to be focused on processing orders instead of damage control?
Unhappy customers. A customer who receives the wrong order or gets it later than expected is not a happy one. If errors have become part of that customer’s experience with you, the loyalty factor begins to erode. They don’t want to take precious time out of their day to deal with mistakes on your part. In a highly competitive market, you simply can’t afford to lose customers to errors that could have been prevented with a better asset management system.
Take a look at your current system and consider how much it is costing you NOT to implement automation. Then ask yourself, is it worth it??
February 11, 2009
The term “Web 2.0” gained popularity signaled a change in the infancy of the World Wide Web, a time when we were making the transition from learning about the technology to beginning to get creative with its potential. Social networking and blogs, just like this one, redefine globalization. The community in which we work and live has no boundaries as we can make friends and generate leads from anyone in the world who has Internet access, which is approximately 1.5 billion people. And then came Supply Chain Management 2.0. I thought, at first, it was merely a spin-off of the popular buzzword. I admit I was wrong. SCM 2.0 is a powerful reminder that our distribution methods have become far more complex as a result of the globalized community. We need to be more aware of kinks in our systems that can drain the ROI, errors in picking and shipping, inefficient warehousing operations, and outdated software. As technology continues to move at lightning speed, if we aren’t making the effort to keep on top of the advances, we are going to be crushed under their weight. I’m still amazed at the businesses I work with that don’t have barcoding systems integrated into their operations. There are solutions for every level of business, from simple barcoding to voice picking to the sophisticated radio frequency identification, which is picking up speed as more and more managers are seeing the ROI on this technology. Have you stepped up to SCM 2.0 or are you still watching it from afar? If so, that distance is going to get wider and wider, until you are no longer seen by the connections that keep you in business.
If you would like to learn more about SCM, check out our Supply Chain Management Video Library in the links section on the left.
February 3, 2009
It takes time to break-in a chair. Taking a seat in the store and feeling like Goldilocks — knowing this one is “just right” — is only the beginning. Once that chair makes it into your home and becomes part of the scenery, there’s still a breaking-in period. In time, as it contours a bit to your body, that chair is part of your daily comfort. It’s such an easy fit that you don’t think about it. That chair is just … there.
Eventually, your special chair is going to need a change. The fabric is threadbare or the cushion is worn out. And, if you want to be completely truthful, it’s lost some of its support. You can re-upholster it, if the fabric is history. You can redo the cushions. Or you can accept the fact that, although it’s familiar, your chair needs an upgrade.
The same is true for your asset management system. Sure, the easiest option is to do nothing about your manual system. You can overlook the errors in the data entry and the incorrect picks that sneak through every day. You can overlook them because you’ve become so used to these problems that you don’t even notice any more. Are you overlooking the real need to upgrade because you don’t want to adjust to something new? Meanwhile, your lack of automation is costing you money. Can you afford that in today’s economy?
Systems like voice picking and RFID have a short learning curve. Time after time, we see that the workers who are tasked with using the new systems not only adjust quickly, but are also more satisfied in the workplace because the automation makes their jobs easier.
It’s time to send that old chair packing. Pull up a seat to the new technology and experience the comfort of taking things a lot easier with the help of value-added automation.