Editor's Note: The Electrical Distributor magazine recently called housekeeping the key to a great warehouse. The topics was so important that it was the magazine's cover story. We reprint it here with permission from the editor. KBA

COVER STORY

GOOD HOUSEKEEPING IS THE KEY
TO A GREAT WAREHOUSE

By Carolyn Heinze

AT ITS CORE, THE BUSINESS OF WAREHOUSING IS SIMPLE: IT'S THE MANAGEMENT OF SPACE and time. The longer it takes for warehouse staff to locate and pick items within the space, the more inefficient the warehouse is—and the less profit the company stands to earn. One of the quirks of the electrical supply industry is that distributors must manage a large and varied number of units, making warehouse layout not only critical, but also extremely challenging. The trick to getting it right is basic good housekeeping, and organization is at the top of the list.

Ken Ackerman of the K.B. Ackerman Company (warehousingforum.com), a warehousing consultancy in Columbus, Ohio, illustrates this with a project he recently consulted on at an electrical distributorship in Philadelphia. One of the most significant issues, as Ackerman put it, was that this distributor had a lot of things going on: "It had a business of cutting cable—unspooling it and cutting it into lengths, which is almost like a light manufacturing operation," he recalled. "There would be some tiny pieces and parts and some great big ones."

The result: There was stuff everywhere. Solving this problem, he said, meant knowing what to put where.

"Depending on the product, items were stored either in racks, on shelves, or in bins," said Ackerman, explaining that the first step in properly configuring a warehouse is to determine how many stock-keeping units there are.

"The next step is to identify which of those items move the fastest and which ones aren't as in demand. Then, it's all about common sense and logic," Ackerman continued. "Put the fast-moving products close to the door and close to the floor, and place the slowest-moving products on the highest racks and shelves where they are hard to get at. They don't take up much space that with headsets and microphones for the order selectors, who then dictate which items they must pick and are then in turn directed by the system on where they need to go next—a process not all that different from a GPS. Ackerman, who has researched this technology in depth, claimed that, in most cases, these systems pay for themselves in a year due to improved productivity.

On the high end of the scale is robotics. In this scenario, lift trucks may move about the warehouse space without any hu man be ings operating
them. This enables the way," he ex plained. Laying all of this out ef fectively reduces the time that warehouse staff spends filling orders.

Effective product layout does not mean, however, challenging the laws of physics or geometry. According to Jon Schreib feder at Effective Inventory Management (effective-inventory.com) in Coppell, Texas, overloading a warehouse leads to problems that will cost money in the end.

"A warehouse that is filled to the rafters inhibits material movement and leads to extra handling and damaged inventory," he noted. "A warehouse should be considered 'at capacity' if 85% of the space available to store products is filled." He added that sound warehouse management does, indeed, include cleanliness. "The condition of the warehouse has a large effect on the efficiency of operations. It also demon order selector to walk beside the truck and pick items without also having to maneuver the vehicle. With the rate at which technology decreases in price, it's hard to know how rap idly this will catch on in the electrical distribution arena, but in the big picture, this is where technology is heading.

PEOPLE POWER

Despite how much technology has streamlined warehouse operations— and will continue to— how well a facility runs
strates how management feels about the importance of inventory," he said.

Management also needs to pay attention to inventory control: "Even with an automated inventory management system, it's necessary to train all staff—that means those in the sales department, too—on proper procedures," said Kathy Newton, professor of industrial distribution in the Industrial Technol ogy Department at Purdue University in West Lafayette, Ind. "There are too many cases where one salesperson looks up an item and sees that it's in stock, only to try to locate it and it's not there. Often times it's sitting in the trunk of a salesperson's car." She added that this is common in open warehouses—where anyone may walk in at any time—and smaller facilities.

TECHNOLOGICAL SOLUTIONS

Distributors have access to a number of warehouse management systems (WMSs). Most of these systems are included or integrate directly into an organization's enterprise system, enabling automated inventory control. Some WMS software even directs workers on the most efficient pick path to fill specific orders.

As voice recognition technology evolves, so, too, have solutions for warehouses. These systems usually come equipped is largely up to people.

Staff members must be re cruited properly and be well trained, said Ackerman, in order for warehouses to function at their optimum. "The people side of it, more than anything else, is often the difference between a good warehouse and a bad one," he said. "If you don't hire well-motivated people, and if you don't train them and keep them motivated, it doesn't matter what kind of technology you have."

As standards for shipping response times and accuracy continue to become more demanding, warehouse managers will be under more pressure to deliver well—and fast. This is coupled with a growing demand for tailored services surrounding packaging. For Newton, this translates into the need for tight inventory management. "For a distributor, inventory and accounts receivable are its two key assets, and accounts receivable, when you think about it, hinges on inventory," she said. "It can't be overlooked, and we can't do things the way we've always done them and expect to continue to succeed. We have to pay better attention to our inventory and warehouse management."

Heinze is a freelance writer and editor. She can be reached at carolynheinze@free.fr.