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Warehouse Practices & Measures – Let’s Get Going!

Tuesday, October 1, 2019   (0 Comments)
Posted by: Steve Murray
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This article premiers a new regular column on warehouse processes and metrics from our Senior Analyst and Chief Process Auditor, Steve Murray.  Each month Steve will discuss a specific warehouse function, processes, practices and the metrics which are used to measure related performance. 

Our goal is to combine elements of the WERC Warehousing & Fulfillment Process Benchmark & Best Practices guide with our Annual DC Measures study and Steve’s own field work in a way that the reader can better understand process best practices and how to measure their impact.

Every warehouse operation has three basic functions– Receive Things, Store Things, and Ship Things.  This month’s tip is related to Receiving - Inbound Visibility.

Virtually any operation whether in a warehouse or in your personal life, will benefit from knowing in advance that something is going to happen.  Not knowing creates surprises.  Surprises create difficulties which can cause a lot of wasted effort fighting fires – figuring out what it is and what to do with it.

With rare exception, when goods arrive they do so because someone ordered them.  Often the impacted warehouse personnel are in the dark regarding the status of these orders.  I have witnessed too many operations which run under the “Forrest Gump” style.  You may remember that Forrest’s mom told him “life is like a box of chocolates – you never know what you’re gonna get”.  Well in warehousing even the confectionery operators need to know what they are going to get, and when.

At a minimum the receiving dock personnel should enjoy inbound visibility using a current copy (including changes to dates, items and quantities) of all purchase orders.  Best practice organizations have current purchase order data on-line, and mandate the use of Advance Shipment Notifications (ASNs) sent digitally by the supplier at time of shipment.  ASNs could come through an Electronic Data Interchange (EDI) setup, through an online portal, or even via a fax or email which has been systematically entered.  The key however is to have this information available in the system used to manage the warehouse.

Using the above the receiving area managers and associates can begin to plan their receiving schedule.  They can know with confidence what to look for, when it might arrive, and decide how to handle it prior to arrival.

Opinion - In our constantly connected online world it is unimaginable that a warehouse team should not have the same visibility that an online consumer (e.g. Amazon) does regarding order status and shipment.

Metrics that are typically used to measure receiving effectiveness include:

  • Percent of Suppliers providing ASNs

  • Percent of On Time Receipts from Suppliers

  • Percent of Orders Received Complete (correct items and quantities)

  • Percent of Orders Received with Correct Documents (Packing list, matching P.O., labeling)

  • Dock to Stock Cycle Time  (Note that DTS Cycle Time is impacted greatly by time spent figuring out what is in the “Box of Chocolates”)

WERC’s Annual DC Measures study provides a way for warehouse operators to compare their own data to those of their peers, and the Best Practice guide can help by showing actions that impact those measures. 

Each of these WERC publications provides a 5 point maturity scale you can used to rate yours.

WERC believes that excellent KPIs are the result of excellent processes, and by improving your processes you will improve your results.

Next month we will review delivery appointments and what happens when shipments arrive.