Warehouse Management Headaches and How to Relieve Them
What are the major issues? How can you address them?
If you run a warehouse or distribution facility today, it’s likely that you are busy — really busy — and scrambling for time. E-commerce has changed the game, as customers demand more, faster, better. Managing a warehouse has always been a battle for time and the pressure never seems to subside. When we talk to warehouse managers and operators, here are some of the issues they face on a daily basis.
Headache# 1: labor shortages and disruptions
With near-full employment, e-commerce entities like Amazon opening large distribution facilities across the nation, and other retailers pressing hard into order fulfillment, warehouse workers (skilled or not) are in constant demand. Labor accounts for a majority of operational costs in most facilities, and is always a struggle. But in times of near-full employment and a growing economy, workers have more options than ever.
To help relieve the pain:
- Automate where possible, to reduce labor stresses and shortages. The fewer people needed to execute a process, the more you can focus on quality employees in the right positions
- Consider training and educational programs that provide labor flexibility, but also to help retain employees in a competitive environment
- Empower employees: in study after study, employee empowerment is the most consistent way to achieve gains in productivity and error reduction. As a bonus, empowered employees are likely to be more loyal
- Consider an incentive program to reward performers and motivate middle-tier workers
- Get with the gig economy and offer more types of flexible shifts and hours to attract labor that can’t work a full schedule
More: Dealing with Warehouse Labor Shortages
| How Can Warehouses Thrive in Tight Labor Markets
Headache #2: disorganization and inventory slot appropriation
It’s difficult to keep a large, dynamic distribution facility organized and logical. When new SKUs enter the system, adding them to stock in a logical, organized manner is critical. Over time, slotting schemes that made sense when they were designed start to fail as order volumes and picking schemes change. People who understood the system move on. Mistakes are made; management philosophies change.
If your system depends on walking pickers with carts, it can become easy for some pickers to move items and leave them in the wrong storage positions. Inventory should be consistent and logically organized, with a defined storage position for everything and a way to reconcile all of it. When pickers are busy, they can easily move items around and leave them in the wrong place. In a large operation, one mistake a day multiplied by many pickers can have a serious impact on organization and inventory accuracy.
To help relieve the pain:
- Make inventory slot integrity a top priority by auditing it often; identify the root causes of misplaced stock
- Implement 5S principles or other means to reduce clutter and increase organization
- Ensure that there are organized processes for new product slot changes or SKU additions
- Train for organization and stress the importance of inventory placement
- Use cycle counting to ensure accurate inventory
- Regularly re-slot your inventory, particularly if you have fluid SKUs and locations
- Consider dynamic storage systems that help rotate inventory correctly
Headache #3: product damage
Damaged inventory is a huge headache.
Not only have you lost the dollars it took to purchase that inventory, you may have also lost customers who couldn’t buy it and perhaps bought from competitors. If your damaged product was shipped to customers, they may lose faith in your company and its products. The process of finding, replacing and dealing with damaged inventory occupies disproportionate time and resources. It’s just a huge headache!
To help relieve the pain:
- Make sure your storage racks, loads and pallets are the right size and capacity. Misapplication of loads or inadequate structure can result in falling products or rack collapses that damage product and endanger employees
- Protect storage rack areas from product falls with panels, straps or netting that restrains loose items that might be knocked free during loading or unloading
- Use accumulation conveyors in buffer areas. These systems prevent conveyed products from bumping into or touching each other while being conveyed
- Train people on the correct ways to handle products – do they understand proper handling, fragility, and other factors?
- Make certain there is enough room around and above pick bins. When people cannot see or easily grasp product, it’s easy to drop it, so accessibility and ease of reaching is critical.
- Focus on ergonomics. As mentioned above, things that are difficult to reach or grab are likely to
Headache #4: “There isn’t enough time”
Time is always a struggle for warehouse managers, who are frequently torn between the demands of running a facility, dealing with vendors, working on upgrades, and reporting to management. You are often the bridge between order entry and shipping/picking, required for the functions of both departments.  In a facility with 8-hour shifts and at fifty workers, 3,000 hours are lost a year due to unproductive workflow processes.
To help relieve the pain:
- Focus on processes. Trimming just a few minutes from repetitive tasks can free up a great amount of time. This means you have to define issues, find root causes and create teams to solve them. Trimming just a few minutes from each step creates valuable time for other tasks
- Delegate. This one actually helps you retain employees. The right people will enjoy the responsibilities and thrive, while freeing up time for you to focus on other issues
- Work with the office to understand its concerns. In many facilities, there is conflict between warehousing and “the office”. Many times, these functions fail to understand each other’s concerns. Warehousing professionals must be the bridge between these functions
Headache #5: order picking mistakes
Order picking errors are maddening—and the definite source of headaches for managers. The good news is that they are often systematic, and that presents opportunities to correct them broadly. The impact of mis-picks are dramatic. Order picking mistakes reduce customer confidence and future business; they fuel returns, which are problematic for any warehouse operation; they often result in lost inventory and disorganization.
To help relieve the pain:
- Determine what’s acceptable. You always strive for 100% picking accuracy, but there are trade-offs; speed for accuracy, time for money, and more. Given unlimited time and money you could reach 100% accuracy, but should you?
- Work on processes before people. You’ll need to address pickers who just don’t get it, but there is more to gain by looking at the way things are picked, the situation around the issues, and what you can do to systematically make it better.
- While automation (in part or in “islands”) should be considered, you can take steps to take to improve manual processes first. We work with many customers who deal with these issues, and the most important point is that “you should never automate a bad process”
- If automation such as light-directed or voice picking fits for your operation, be sure it meets your ROI standards
- Think about the unknowns. You may not be aware of all the errors committed, and those can be the silent killer of productivity and profitability. We break down the details here
More: Picking Rates and Comparisons | and Ten Ways to Improve Order Picking Operations
Final thoughts
While running a warehouse or DC is always a challenge, it doesn’t have to be a headache. When you approach issues from a systematic standpoint and constantly improve your facility, you can reduce the headaches.
Tags: 3PL, Third Party Logistics, ecommerce
Scott Stone is Cisco-Eagle's Vice President of Marketing with 35 years of experience in material handling, warehousing and industrial operations. His work is published in multiple industry journals an websites on a variety of warehousing topics. He writes about automation, warehousing, safety, manufacturing and other areas of concern for industrial operations and those who operate them.