Getting Back to Basics: The 6 Warehouse Fundamentals That Matter Most

warehouse improvement — Above: There is always room for improvement in the six core warehouse fundamentals.

Warehouse fundamentals

The six core fundamentals of warehouse management are crucial for the day-to-day functioning of warehouses. Understanding these concepts allows you to optimize warehouse activities, reduce mistakes, and improve customer service. The chevron graphic below illustrates these six principles, each explained in more detail.

1. Receiving

The initial and most crucial warehouse operation is receiving. Errors in this stage can impact all subsequent processes. When materials are received into a warehouse, clerks must verify the correct item, quantity, and condition. An incoming inspection procedure should be in place, as some items require more detailed inspection than others. For instance, copy paper might only need a quick check for quantity and damage, whereas electronics, food, and chemicals require a more comprehensive inspection process. Inspection codes typically dictate the level of detail needed. In some instances, based on your ERP business software settings, serialized or lotted materials may need their codes entered at this point. Again, any errors during this step will affect all following processes. An often neglected aspect of receiving is handling customer returns or reverse logistics.

The receiving phase may also be the ideal time to apply unique company labels and consider counting the item during cycle counts. Breaking down large quantities into easily measurable units will improve inventory accuracy and facilitate the cycle counting process.

2. Put Away

The Put-Away process is the second step in warehouse operations. It involves transferring materials from the receiving dock and inspection areas to their designated storage or bin locations within the warehouse. Properly executing the put-away process offers several advantages:

Decreased travel time for team members within the warehouse.
Elimination of the need to search for materials.
Faster and more efficient material storage.
Optimized utilization of warehouse space.
Simplified completion of Cycle Counting and Physical audits.

3. Storage

Storage involves storing materials in a warehouse until they are needed for production or customer orders. Proper storage optimizes available space in your warehouse and enhances labor efficiency.

Every warehouse must have a map providing an overview of the warehouse addressing system to facilitate quick put-away and picking. This map should be displayed throughout the warehouse and serve as a training tool for new employees and help locate less frequently used materials.

In certain situations, specific materials (such as hazardous materials) should not be stored adjacent to each other, and these items should be properly organized by bin location in your ERP business software system.

4. Picking

The picking process retrieves materials in a warehouse to fulfill internal production orders and customer orders. A well-designed warehouse and bin/location addressing system go a long way here. In addition, signage and labeling will aid in locating items to be picked. Finally, the picking process is a good candidate for automation using handheld computers, tablets, and wearable technology. This area is also often overlooked when reviewing staffing requirements.

5. Packing

Packing is the warehouse procedure that combines picked items from a sales order and readies them for delivery to the customer. A key responsibility of packing is to reduce the risk of damage once items depart from the warehouse. Packing can involve either palletizing or boxing, and it's crucial to identify and minimize extra expenses related to packing materials and labor. When palletizing, using shrink-wrap machinery enhances efficiency.

6. Shipping

Shipping is the final process at the warehouse. The previous steps, such as receiving, storage, put-away, picking, and packing, are vital to shipping success because they significantly affect whether the order is fulfilled accurately and safely. The shipping process is successful only if the customer receives the right items on time and undamaged.

Summary

In conclusion, there is always potential for enhancement in the six core warehouse principles. Furthermore, advancements in technology, workforce dynamics, and the supply chain will continuously prompt warehouse managers to seek innovative methods to boost efficiency and meet job expectations. Consequently, it is advisable to periodically reassess the six warehouse fundamentals to evaluate the impact of internal or external changes on your operations.

If you're interested in evaluating your warehouse processes, reach out to Champion Business Solutions, LLC, and we'll assist you in reviewing the six key fundamentals of warehouse management.

Roger Pujol, CPIM, CSCP, the founder of Champion Business Solutions, LLC, is a consultant specializing in ERP Business software. He shares insights and experiences on assisting small and medium-sized businesses (SMBs) to enhance their operations.

Champion Business Solutions, LLC