Eliminate Destroy of Values Activities from The System
Companies put in massive capital investments and operational costs by means of storing and handling products in their warehouses.
A company that is turning its inventory six times per year has invested in inventory equivalent to 60 days of sales. Storing products 60 days in a warehouse before they are sold exposes sales risk and requires proper packaging, storing and material handling. One of the warehouse roles is to prevent the products from aging and demolishing in the warehouse – by flagging quality issues before they become a problem. The products storage and handling practices in the warehouse are of various kinds and different stages between companies.
Effective warehouse management requires great understanding and implementation of best-in-class practices aiming to constantly improve product quality, services accuracy and operating at the lowest cost proposition.
The subject matter is to design and develop, in the best possible manner a warehouse “micro space” where multiple of movements; inbound, storage and handling and outbound activities take place simultaneously within that space. The space must be studied and arranged in great detail to maximize quality and services and overall warehouse productivities. Smart process modifications and ongoing improvements can add substantial values and often without any major capital investments.
The trend of a warehouse operation is that companies do not want to operate with more number of warehouses than those absolutely required. Cross-docks, swap-body’s and fast flow systems have taken over the typical role of smaller warehouses. This trend is due to the fact that operating warehouses and keeping inventory is considered destroying of values. On the other hand, operating a warehouse is a tradeoff between cost and value added. Many warehouses have invested in state-of-the-art tools and equipment to operate their central warehouses at the lowest possible cost – but the modern systems, however, do not always deliver the expected prompt cost reduction. Ultimately, it is more about understanding the warehouse basics before investing in expensive tools and equipment. The warehouse methodology and processes drive the use of tools and the tools may not take over the systems and processes design. There are several characteristics and variances between warehouse operations. Technology, tools and equipment that might be effective in one warehouse does not necessarily fit so well in other types of warehouses.