Improve your Warehouse Productivity Through Product Slotting
ARTICLE SUMMARY Product slotting can significantly improve warehouse productivity—and reduce labour costs by up to 30 percent. Simply put, product slotting is about putting the right product in the right place so you can pick it in the most efficient way. In other words, you put the fastest moving products closest to the packing and dispatch area to minimise the movement of people in the warehouse. How to do this? To start with, find out which products are picked the most and place them as close as possible to where dispatch is situated. It is important not only to think horizontally but to think vertically as well. So, slow-moving products go up on the top shelves because it takes longer to get them, while faster-moving products come down on the bottom shelves. Doing it right can save you 15 to 30% in warehouse labour costs. One of the key things you can do in your warehouse to improve the productivity of your staff as far as picking and packing go is to institute a system of product slotting. How Supermarkets Slot Products You may well ask: “What the hell is product slotting?” To answer this question, let me give you an analogy. When you walk into a supermarket you will invariably find that the fast-moving products—such as milk, and eggs, and bread—are stocked at the back of the store. Why do the stores do that? It’s because they want you to walk through the entire store, seeing all these other products that you might buy. On the way through you may pick up a packet of biscuits or a chocolate, and by the time you leave you’re laden with goods you didn’t intend to buy. In effect, retail stores slot their products (understandably) in a way that is optimal for sales, not ergonomics. How Warehouses Slot Products The supermarket example above represents the exact opposite of what you should do in your warehouse. Here, you put the fastest-moving products closest to the packing and dispatch area to minimise the movement of warehouse staff. You want to lay out your warehouse so your picker’s travel the least distance. Simply put, warehouse product slotting is about putting the right product in the right place so you can pick it in the most efficient way. Here’s another way to look at it. Imagine the warehouse as a big box. On one side...
Read MoreHow to Benchmark Your Supply Chain
Well, I asked Steven Thacker, one of our benchmarking management experts, exactly that question! I hope his answers help you. What is Benchmarking? Benchmarking is essentially comparing; comparing one against another. When we compare different levels of sophistication and performance in supply chains, we can identify particular levels that we think are important to achieve, or that represent typical performance levels for supply chains as a whole. Those levels are “benchmarks”. Of course, benchmarks and benchmarking can cover all kinds of different things, at work or elsewhere. Suppose you wanted to be the fastest runner in the world, for example. The first thing you’d want to know is “what is the benchmark?” meaning “what speed do I have to beat to be the fastest?” You can benchmark for individuals and also for teams. You can also benchmark supply chains. Sometimes benchmarks, like how fast you run, how high you jump, and so on are easy to identify. They are simple activities to measure and the figures are clear and meaningful. Elsewhere it’s more complex, as is often the case in business. It’s still just as important, though, if you want your business to improve, to know how you compare, and how good you have to be to be the best. How Can a Business Start Benchmarking? You can start with the things organisations frequently want to benchmark. The first of these is “How good is my service?” In fact, it’s also a good idea to go further, because these days, service provision should typically be a competitive advantage for an organisation. So the questions are rather: “How good is my service today?” and “How good does it have to be to really differentiate my business compared to my competitors?” A second one is then cost; For instance, “Is that level of service, whether current or planned, cost-effective?” This is a question that frustrates businesses if they only have data that is anecdotal and subjective, and lack the quantitative hard data that really tells them what’s going on. This is where the SCOR model can be a big help, because it defines formal, structured ways of capturing data, which can then be stored in a database to provide a better guarantee of accuracy. Using SCOR to Benchmark the Supply Chain SCOR is a method that’s helped businesses in many different areas, such as quality circles. In the general supply chain...
Read More11 Golden Rules for Meaningful Supply Chain KPIs
In an attempt to help you keep your supply chain organisation from analysis paralysis, metric manipulation, or measurement misnomers, I decided to use this post to share nine important guidelines, or golden rules, for benchmarking your business and monitoring performance using meaningful supply chain KPIs. Golden Rule #1: Meaningful KPIs Require a Meaningful Strategy I’ve written many posts on this blog about the importance of having a supply chain strategy aligned with the overall business plan, and why it is a mistake to have misaligned strategies. I’ve also described some of the issues that can arise from such an error. However, it’s a topic worth touching on again, as an unclear or misaligned supply chain strategy will make it difficult for you to develop meaningful KPIs. Your supply chain strategy should be the basis for your KPIs, but for that to be possible, the strategy must be clear, understandable, and aligned with the business plan. With these conditions assured, you should be able to identify (broadly) the areas of measurement that will steer your organisation towards its goals. Golden Rule #2: Don’t Meddle or Manipulate If you want meaningful supply chain KPIs, you need to live with the numbers they reveal. I’ve seen more than one management team create or exploit process loopholes to arrive at better KPI results. It’s a folly to do so, and it doesn’t do the managers or the company any favours. A prime example of this kind of manipulation (and really, it is manipulation), is when performance issues arise which result in shipment delays. Instead of concentrating on resolving the issues at hand, the management team starts contacting customers and asking if they will accept a later delivery date or time. If the customers agree, the management team dispatches the shipments and records them as delivered on time. Of course, contacting the customers is the right thing to do, but when it is the shipper and not the customer, who initiates a change in the delivery schedule, there is no way it should be recorded as “on-time delivery.” Late is late, even when it is with a customer’s permission. Golden Rule #3: Put Yourself on the Outside, Looking In You can come up with a list of service metrics and call them KPIs, but that doesn’t automatically make them meaningful supply chain KPIs. For them to be useful, your service KPIs should reflect how...
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