The Top 6 Warehouse Mistakes and How to Fix Them
Discovering the 6 most costly warehouse mistakes and the simple preventative ways to fix or avoid them all together.
Mistakes can be expensive in the business world. This is especially true as operations scale to larger and larger sizes. A small issue becomes a very large issue very quickly in these scenarios. In this article, we diagnose the top 6 types of warehouse mistakes and how to fix them. After reading this article, you will have knowledge of how to correct and prevent costly problems in your warehouse.
Too Much Inventory
By far the most common mistake in warehousing is holding too much inventory. Usually, an incomplete forecast of inventory requirements is to blame for this problem. Either that or the forecast was incorrect. Additionally, companies may purchase more than required because suppliers discount bulk orders.
The problem with too much inventory is that is consumes a larger portion of the company’s cash. This larger resource consumption is present both in the initial purchasing as well as the holding of these goods. This means that there is less resources available for use in other areas such as adding employees, or marketing.
To fix this warehouse mistake, ensure that proposed inventory levels are appropriate for your forecast. You may need to work with your sales and marketing teams to determine this. Once you have a proper forecast, then you can work with your supplier to negotiate a bulk discount. Instead of single order discounts, however, this should be based on annual usage.
Poorly Defined or Non-Existent Processes
Another common warehouse mistake is a lack of process. Well defined and enforced processes are the backbone of any warehouses operation. Therefore, any warehouse operation without good processes is not much of an operation at all. It is important that all warehouse employees perform tasks as similarly as possible. Doing so avoids mistakes, efficiency gaps, and quality problems.
Fixing a lack of processes is simple. First, ensure that you receive input from all your team members on best practices for their tasks. You should work together to define a list of tasks that are priorities in your warehouse. From there, write down the agreed upon process for each task and post them in their respective areas. As team members join or move to other areas, they can easily adopt processes for tasks in their new area.
Ignoring Lean Principles in Warehousing
Lean principles in warehousing are a set of guidelines that enable a warehouse to operate as efficiently as possible. The result of this is an inefficient warehouse operation. In other words, the average time spent per revenue dollar is higher than it should be. Lean principles seeks to remove unnecessary tasks by correcting issues at the source, streamlining tasks, or standardizing tasks.
Putting Off the Transition to Digital Inventory
Traditional paper inventory tracking is possible for smaller warehouses. However, as things scale this form of inventory and order management becomes increasingly difficult. Resisting a transition to a digital warehouse system can be a costly and cumbersome warehouse mistake. This is because of human input requires more time and is prone to errors.
Storing Goods in Improper Areas - Warehouse Layout
Improper warehouse layout is usually a simple fix, but can easily become a big issue over time. Because of this, a warehouse manager should be proactive with the chosen location of materials. Materials located in an inefficient place may not break the bank at first. Over time, however, as material volume grows, the mistake of not correcting this problem compounds. Before long the required labor to correct the ship has grown exponentially.
Avoiding warehouse mistakes like this is the best way to fix it. Instead of keeping materials in improper locations, diagnose the warehouse layout first. Once you have completed this, then you can decide where to store your materials. Consider, for example, high-turn inventory should sit close to packing and fulfillment areas. Additionally, large bulky materials should sit close to loading bay doors.
Poor Maintenance & Housekeeping
As storage costs continue to rise, utilizing every square foot of your warehouse becomes more important. Piles of scrap or dirt consumes this space but may also be a safety hazard. In addition, junk piles can cause harm to employees trying to pass through. They can also become home to unwanted pests such as poisonous spiders.
To correct this warehouse mistake, ensure that teams regularly inspect unused materials. Any materials past their usefulness should move to a trash bin. This will free up space in the warehouse and reduce potential safety hazards. Make sure team members follow this clean up process by enforcing it on a regular basis.
Say Goodbye to Warehouse Mistakes Forever
In reality, the biggest problem with any warehouse is simply a lack of attention. After you have identified your problems, it is a question of simple maintenance. Are you dedicated enough to keep these mistakes at bay? If so, I believe that you will find success. However, all too often mistakes crop up from lack of process and lack of dedication. Perhaps this should be a list of 7 warehouse setup mistakes; the top being “short-term fixes to long-term problems.”
Looking for a warehouse partner?
Trust our classic customer service.
There was a time when businesses revolved centrally around the customer and their needs. Decisions were made based on what is best for the customer first. People did what they said they would, and jobs were completed on time. AMS carries on the tradition of customer service today.