19 Jun Minimising Waste in the Warehouse
The elimination of waste in the warehouse is paramount for all distribution operations. Wasted staff journeys, wasted delivery miles, overstocking of goods. All of these add to your costs and therefore reduce your profit.
Waste covers many things. We’ve previously looked at the best picking methods to reduce wasted staff travel; and how to optimise delivery routes to avoid wasted transport mileage. But today we’re looking at waste in terms of wasted products.
Waste is a particular concern for suppliers and manufacturers of pharmaceuticals and food and drinks. These products have obvious ‘best before’ or ‘use by’ dates. Stocking them for too long can either mean they go off or that they become unsellable as they have too short of a shelf life remaining.
What are the causes of waste in the warehouse?
An obvious cause of waste in the warehouse is poor stock management. Over-stocking means that goods are received before they are needed.
Adherents of ‘lean’ methodologies might argue that all carrying of inventory is a waste. Because the goods are being stocked in advance and not being supplied to the customer only at the exact time they are required. But most distribution facilities can’t work to such strict ‘lean’ standards. So, an element of stock holding is required. But if it’s not intelligently done, then overstocking can lead to foods or drugs being wasted if they are not sold quickly enough.
Not only is there a danger that the stock itself is wasted, but there is wastage in the money tied up holding the goods. There is also the risk that extra staff effort will be required to handle those goods and possibly unnecessarily need to move them between storage locations in the warehouse.
Quality issues with goods can lead to waste too. If the stock is damaged when it’s received, then every step of the supply chain after this is pure waste. If the faulty goods actually get sent to the end customer, then there will be more wastage in terms of costs spent in sending out the original order, and then further costs incurred in recovering and replacing the faulty item.
Poor stock handling can also contribute to waste. If goods needing to remain chilled aren’t put away quickly enough, or are not kept in controlled packaging, they will deteriorate.
How can a WMS help to reduce waste in the warehouse?
Waste in the warehouse is not inevitable. With the right processes to deal with it, waste can be minimised. And a good WMS can measure and improve those processes.
A WMS can track and report on KPIs. These can be set up to highlight where there are inefficiencies or alert the warehouse director when there are situations that could lead to increased waste. Measuring stock turn, for example, identify whether you’re holding too much stock.
The entire order fulfilment process can be monitored and optimised via a WMS. The receiving, putaway, picking, packing and delivery of orders to end customers can be streamlined and made as efficient as possible. In this way, faulty incoming goods can be picked up before they are fulfilled, orders can be more quickly picked and packed, and route optimisation can ensure they get to customers as quickly as possible.
A WMS can identify the goods that need to be kept in temperature controlled packaging. The WMS can do this ahead of time, ensuring that outer packages are not opened, or that the delivery is moved quickly to a chilled or frozen section as soon as it is received. This completely prevents any quality issues with foods becoming too warm.
An optimised warehouse layout will always produce productivity gains. But it can help with reducing waste too. A WMS can help with optimising picking paths. This part of the order fulfilment process can then be made that much faster. This reduces wastage of labour costs and can represent significant amounts where a business deals with there are seasonal foods or goods that perish quickly.
If you’d like advice or guidance with any aspect of your supply chain, our consultants can help with KPIs, warehouse layout, WMS features and more. Call us on 020 8819 9071 or get in touch.