Creating Value From Non Moving Inventory

The new year is upon us. Hopefully you had a successful physical inventory. Now that the dust has settled, you, as the professional warehouse manager, should be reviewing your list of department goals for the new year.

I'm sure one of those goals is to ensure that the warehouse is organized in such a manner to cultivate efficacy and the ever important goal of maximizing warehouse real-estate.

Most of us have those dreaded slow moving, or worse, non moving materials in our warehouses. You know, that pallet of material we label year after year "do not inventory". I call this material "freeloading material" because it adds no value to my warehouse.  We know the story, the history, or in some case we simple don't know where this stuff came from because it was here before we were.

The situation may be that someone in the organization sees possible potential value or is just afraid to make the decision to get rid of this material. It is like having a tenant that does not pay rent, or having your lazy brother-in-law who lives in your spare room, drinks your milk, eats your last cookie, will not get a job, but your wife won't let you throw him out! So what do you do?

Well like all problems you need to evaluate the situation, so lets break it down to help create some possible solutions to rid yourself of this freeloader.

The first thing we need to realize is that space in your warehouse is valuable and could hold more worth than the freeloader. In my geographic location warehouse space cost between $5.00-$12.00 per square foot. That means a 40"x48" pallet of non moving material is costing my organization a minimum of $800.00 per year to store. That cost is compounded by whatever the fixed cost was to purchase said material, or even worse, what it cost to produce the non moving finished product if it was manufactured in house. After completion of a physical inventory is the perfect time to bring these numbers to whomever is having a hard time letting go of this freeloader if you are being forced to hold on to it.

Phase two of letting go of the free loader is exploring some options for its final destination. Just like your lazy brother-in-law you want to avoid just sitting it outside on the curb hoping it will go away.  One simple way of removing freeloaders is contacting the vendor to ask about a return. Depending on the situation, you may even receive a  full or partial credit for the material.

Another option is reminding other department heads that this material exist. You may know the material and inventory in your warehouse intimately but others may not be as familiar with what you are currently housing, especially if the freeloader is not in the WMS or ERP system. It could be worth mentioning in a production meeting, or sales meeting, that you still have this material in house and it is occupying valuable, limited, warehouse space. The freeloader could possibly be a viable option for substitution in a particular manufacturing process, or could be listed as an alternative on a bill of materials. Perhaps sales could use a boost and an incentive could be offered to the sales team to move this freeloader into the hands of customers.  I have had this very situation in the past. I took over a warehouse that was a bit shambolic. After my first cycle count, I had discovered a skid of finished product that an organization was housing but did not appear on the cycle count list. No one currently working in a decision making position even knew about this product that had been sitting up in a rack for what looked like years. I talked to the sales manager about these products and they were quickly reintroduced to the company's sales catalog. Within just a few weeks an order was placed and, just like that, the skid of forgotten material was gone. It could not have worked out any better.

I know you will all do your diligence to unload the freeloader but, unfortunately, there are cases where the freeloader cannot be sold, cannot be returned, and cannot be used on a bill of materials as a substitute, but that does not mean you have to keep it.

In these situations you have to really evaluate what you are dealing with. Ask yourself and everyone in your department "who could use this stuff?". Have a quick brainstorming session about the material. Could you use it for something internal that may not have been it's intended purpose? Is there a trade school, or other institute of education nearby that could benefit from a donation of this material? Is there a children's museum or after school program of some sort who would take this as a donation? If so contact them, arrange for deliver, and then talk to your marketing department do a quick write up about what happened in the company news letter, turning the freeloader into a positive press release.

Whatever the case may be, we as professional warehouse managers, have an obligation to reduce waste. That obligation sometimes extends past the walls of our warehouse. We want to be responsible with our materials and ensure we do all that we can to keep things from ending up in a landfill. Anyone can just throw something in a dumpster to free up space. A creative, progressive, professional warehouse manager can turn a freeloader into some sort of value for his organization.

Like what you read? Take a look some of my other post here:
http://thepallet-jack.blogspot.com/2015/11/the-most-valuable-asset-in-warehouse.html
Feedback is always welcomed!

My name is Matt Austin. I am a Professional Warehouse Manager. I greatly enjoy all areas of warehouse process improvement, and sharing ideas. Please feel free to contact me with any warehouse situations you may be experiencing for some outside perspective. Thank you for reading!

A New Approach to Cross Training.

Cross training. At some point in our professional warehouse careers we have all done it. Sometimes it can be a pleasant, organized opportunity with goals, timelines, and even a structured checklist supervised by an over enthusiastic trainer.

Most of time however, it is shadowing a team lead, maybe taking notes, maybe not, or perhaps just some good old fashion OJT (on the job training). I would like to propose  a different approach to cross training.

First lets ask, why do we cross train? Of course one answer is that we want a more versatile, experienced, educated and proficient work force. Cross training helps us accomplish that goal. Traditionally we, as the managers, identify one up and comer, a raising star in the department. Someone we trust to be ambitious and mature enough to start the long climb up the proverbial department food chain. We then pair that individual with a department veteran and some version of the above scenarios plays out. The result is we now have an added asset in our department to help when the work load increases or to fill in for time off, etcetera, etcetera, and there is nothing wrong with this traditional version of cross training.

But what if we could do more with cross training? What if we could cross train the entire department while still identifying and recognizing that raising star in the department? How much more could our warehouse benefit from this version of cross training? These are the questions I asked myself and below I will describe the cross training program I instituted with great success.

Let me revisit our first question. Why do we cross train? Most of what I stated above remains true, but doing so the traditional way can be slow, and can consume man hours. We all know how valuable man hours are, a slowed down warehouse is not an efficient warehouse.

I wanted to take cross training a step further. I don't just want a stronger workforce, I want the best work force. I want everyone on my team to be ready to step into my shoes should the need arise. Of course it is not feasible for me to cross train my entire department to do exactly what I do on a daily basis. What I can do, however, is give my team some tools to become future professional warehouse managers.  I can combine a review of current processes, preparing the members of my team for advancement, and cross training of my entire department all into one step.

How do I accomplish this? It's simple. I identify anyone in my department and I inform them that in two weeks they will be giving the rest of the department a twenty to thirty minute class on what roll they play in the warehouse and how their process works. In short, what they do and how they do it. 

This person is now going to gain experience in the areas of creating a presentation, public speaking, process mapping, process review, and process maintenance. Your employee is going to review his or her own daily processes on a level that, most likely, they have never done before and then teach that processes to others. Don't believe that last statement? Take a minute and write down how you get dressed in the morning. Do you start with socks? Right foot first or left foot first? Or do you start with your shirt? Now you're thinking about the first step to something you do every single day without conscious thought and you have done this processes for most of your life.

Imagine all the hidden department benefits that could come from this type of process review or cross training. Oh, and lets not forget that he/she is teaching this processes to your entire department giving you the added benefit of cross training everybody at one time.

So the idea in my system of cross training is for the one individual to learn a multitude of new skills, and for multiple people to have exposure to a process in the department that they may be unfamiliar with.

Of course I provide guidance for my team in the form of a previously created template or example class. This acts as a guide for those with less experience creating and presenting.  It also helps to keep the presentation focused.  I schedule time to meet with the identified individual a minimum of four times before the class start date and offer guidance for the finished product. Doing so gives me, as the department manager, the opportunity to review the process under a microscope and work on my leadership and mentoring skills. It also allows the individual some practice time in a controlled environment. It is critical to be a subject matter expert before giving this type of presentation. These meetings will help give the individual the confidence they need to become such an expert. It is equally critical that you, as the mentor, are there to lend a hand if things start to go astray.

Each class ends with some questions and answers about the process. I ask if anyone would like to volunteer for the next class, then I ask if anyone would like to preform the process they just learned about in the days ahead.

An added benefit to this system of cross training is team building. Everyone will eventually give a class so the presenter is presenting to an empathetic audience. An empathetic audience is an attentive audience and of course some processes will be repeated by different presenters, but when it comes to learning new processes there is nothing better then a little repetition. Not to mention I get to spend some great one on one time working with the members of my staff.

The world of supply chain / warehousing is changing. Everything is going to speed up. We are going to need our workforce to be up to speed in all areas of our departments sooner then later and new leaders will have to emerge to fill the demands of a faster more efficient world. I believe my system, or any system that promotes sharing of information and education in our area of expertise can be part of that evolution.

Like what you read? See my other post at:
http://thepallet-jack.blogspot.com/2015/11/the-most-valuable-asset-in-warehouse.html

My name is Matt Austin. I am a Professional Warehouse Manager. I greatly enjoy all areas of warehouse process improvement, and sharing ideas. Please feel free to contact me with any warehouse situations you may be experiencing for some outside perspective. Thank you for reading!

Hunting The Unseen Monster In Your Warehouse

There is a monster lurking in your warehouse. This devil is sucking away  process efficiency causing  labor cost to raise, moral to decrease, unnecessary ware on some of your assets, and could be the root cause of employee burn out. The name of this monster is movement waste.

Movement waste, or motion waste as it is sometimes called, is a non value added step that in most cases can be avoided with just a little analyses and some creative thinking. Most of us spend more time then we realize trying to battle this monster. It's the reason we keep our car keys by the door, or our spices by our stoves. Placing items we use on a regular basis in locations where they are most easily accessible helps to keep us stay as efficient as we can in our homes and in our workplace. The same principles must apply in the warehouse.

It's no secret that on average a clerk will spend 60 to 70 percent of his or her day simply walking the warehouse floor performing various tasks. Unless you have the room in your budget to invest in a system of convoys or robots to bring products to the packing or shipping stations, this will remain a fact, for now anyway. But we can take a hard look at where we are locating our inventory. As professional warehouse mangers we must keep a watchful eye on current trends in our inventory. But that is only half the battle. I'm not just talking about putting your "A" inventory closest to the shipping station, I'm talking about hunting down movement waste in all processes concerning the warehouse.

Take a look at your clerks work station for example. Watch them work. Do you notice they are turning around several times a day to grab packing material? Is there room just above their heads to store this material with the addition of a shelf?

I once had a left handed clerk. His automated tape machine was on his right side. Somewhere in the neighborhood of 500 times a day, he had to reach across his body to push the buttons and grab the tape as it was dispensed. The tape machine was bolted to the packing station and looked like it had been there for the past 100 years. After watching him work for 30 seconds I asked him if he would like to move that machine to his more dominate side. He let out a big sigh and said that would be wonderful. Just imagine how much more enjoyable his job was from just that simple elimination of movement waste.

If your not sure how to find movement waste start by doing some time trials. The first step is to observe. Map out a possibly problematic process and see how it looks physically mapped out on a white board or something of the sort. Highlight any potential areas where waste may be accruing. Next, get out on the floor and watch the process in real time.  Record how long it takes to complete your current process on at least ten different occasions at to establish a baseline. Gather intelligence. Talk to your clerks who are preforming the process and get their prospective. Remember it may look good on paper but your clerks can give you real life feedback so be pragmatic about reducing movement waste.

Now that you have identified where the movement waste is coming from have a brainstorming meeting with your team about how to eliminate or reduce some of that unwanted waste. Use your team, you don't have to do this all on your own. Their input is invaluable and important but remember, above all, to be creative when seeking improvements.

If new or additional equipment seems to the solution, be sure and do a cost analysis to prove that any new purchases will result in a positive ROI. (Return On Investment) Trust me, if you do the leg work on this it will be a much easier sell to the operations manager.

Your solution could be as easy a just moving some things around. Just because you inherit a process from a predecessor, that doesn't always make it the right process. Happy hunting!

Like what you read? Find my past blog post here:
http://thepallet-jack.blogspot.com/
Feedback is always welcomed!

My name is Matt Austin. I am a Professional Warehouse Manager. I greatly enjoy all areas of warehouse process improvement, and sharing ideas. Please feel free to contact me with any warehouse situations you may be experiencing for some outside perspective. Thank you for reading!

Warehouse Philosophy

I think it's safe to say that all professional warehouse managers have the same department goals. 100% accuracy in the areas of shipping, receiving, and inventory control with maximum efficiency on all current processes at the lowest possible cost while maintaining 100% internal and external customer satisfaction. But how do we achieve such a lofty goal?

I believe it starts with a well defined warehouse philosophy. Your warehouse philosophy is more then a management style, in fact it dictates your management style. A warehouse philosophy helps to shape and mold your department's culture. As a professional warehouse manager it is our responsibility to create a warehouse philosophy that will support the mission statement of our organization and simultaneously assist in achieving department goals.

If you have read any of my previous post then you may be able to take a guess at my warehouse philosophy. Simply stated my warehouse philosophy is "Continued improvements through education, sharing of knowledge, and transparency".

Adopting this philosophy has motivated me to continuously seek out new information and techniques relevant to warehousing and warehouse management. The obvious result is I am becoming a more knowledgeable and confident leader.

 It is widely believed that knowledge is power, but in actuality it is the application of knowledge that will help gain your desired results. What good would it do if I were to read one hundred books about warehousing and I decided to never to act on, or shared any of this information with my team or those affected by my department? So of course I take advantage of any opportunity I can to share information with, not only my team , but other department members as well.

With my adopted philosophy my team is also gaining knowledge resulting in a stronger more invested department. When your team is invested in achieving the department goals you no longer have people working for you, you have people working with you.

Let me give you two different scenarios.

Warehouse A has a manager that delegates the daily duties to his/her clerks. The clerks do their daily assignments to the best of their ability's and go home at the end of each day. The warehouse manger reviews the department data and tries to figure out how to improve the department, then goes home when his/her day is over.

Warehouse B has a manger that has a ten minute meeting each morning. In this meeting he/she shares department information such as, how many packages were received the previous day, how many packages were shipped, how many orders were picked and processed. Then he/she spends a few more minutes reviewing a specific daily process. The process action blocks are mapped out on a whiteboard and he/she asks his/her team to fill in each action block of the process together. Then, as a team, they review the process and look for any possible improvements. Someone mentions the printer paper capacity could be larger to reduce the amount of times the paper has to be refilled. The warehouse manager agrees to look into that simple improvement and off the team goes to preform the daily tasks. A process improvement has been identified, and the team is empowered.

Would you agree that the clerks in warehouse B are going to spend a few extra minutes thinking about what they are doing and how they are doing it each day? The warehouse manager in warehouse B has ignited a spark of thought that could turn into a flame of new processes that revolutionizes this warehouse. This is the definition of an invested team. This team has bought into the warehouse managers philosophy of continued improvements through education, sharing of knowledge, and transparency, possibly without even knowing it.

I'm sure you have figured out that the second scenario happened in one of my warehouses, but actually both scenarios were from my own experience. The first happened before I made a conscious decision to create and adhere to my own warehouse philosophy.

So what is your warehouse or department philosophy? Don't have one? Start with mine and adjust accordingly. I have had tremendous success with it and I would be willing to bet you would too.

Like what you read? Find my past blog post here:
http://thepallet-jack.blogspot.com/
Feedback is always welcomed!

My name is Matt Austin. I am a Professional Warehouse Manager. I greatly enjoy all areas of warehouse process improvement, and sharing ideas. Please feel free to contact me with any warehouse situations you may be experiencing for some outside perspective. Thank you for reading!