ERP Package – Sales Module
In the context of growing market competition, organizations are focusing more on closer partnership across supply chain. Increasing efficiency in sales and distribution process facilitates an organization to maintain its competitive edge. Best practice processes, embedded in an ERP package, are an enabler in this direction. The important components of sales modules: Sales inquiry handling. […]
Information System for Decision Support
Introduction In the current globalized business environment, decision making is becoming more and more difficult. Some of the problems faced by business are as follows: There is large volume of internal organizational data on hand thanks to the modern data-storage system. However, not all data available would be useful for decision. The flow of information […]
What is Productivity and Why it is Important to Corporates, Nations, and Professionals?
What is Productivity and Why it is so Important? We often hear the term Productivity, bandied about in economics and management textbooks and the popular press. Indeed, not a day goes by without this term popping up in myriad contexts. Further, when experts talk about falling or rising productivity, they stress its importance to everything […]
The Argument for Privatization of Airports
Privatization of airports is not a new idea. Many politicians have implemented it as an important economic policy. Margaret Thatcher was one of the first politicians to use privatization as an important policy measure. Her government privatized essential entities like the British Airways as well as the Heathrow airport in the 1970’s. Donald Trump has […]
History of International Trade
Any time you walk into a super market and pick up any stuff like a knife or a toy and chances are that the item has been manufactured in China or assembled in Mexico. Pick up coffee pods and you will see that they have been imported from Africa. When you shop for clothes, it […]
Any warehouse operations are measured by service levels, volume of transactions handled quality of transactions and most importantly inventory health maintained.
By Inventory health in a warehouse, we are referring to Physical Inventory Accuracy, the way inventory is physically kept in locations and discipline maintained in transactions, inventory maintained in the system.
Inventory Health, in turn, is dependent upon System setup, floor layout and infrastructure coupled with defined process, compliance, and regular inventory checking, audit and training.
The key to good warehouse operations is reflected in availability of documented process covering all above mentioned functions and documented proof of day to day compliance of above tasks.
All warehouse processes are documented in Standard Operating Procedure, which is the guiding bible. These processes are further broken down to Work Instructions for each job function and task or activity.
Warehouse floor will have layout design with designated areas for stocking inbound materials waiting to be in warded, stocking locations with locations marked either in racks, shelves, bins or floor locations to store pallet level, carton level or unit level items and outbound shipment area where materials are removed from inventory locations and kept for consolidation and preparing cargo for outbound shipments.
A good warehouse floor will have clearly marked aisles, locations with labels depicting various kinds of inventory like good stock, stock on hold/ QA, defectives, returns materials, reserve stocks, etc.
The key to inventory health as well as to operational efficiency lies in people following process to keep the right material in the right location, in the right way and updating system transaction to complete the cycle.
Location accuracy is critical to the operations. In a huge operation, materials are picked based on system guided pick lists or RF enabled picking. Any wrong material lying in the location picked may get missed out in the process and end up as wrong shipment or pickers may have to waste a lot of time looking for right part numbers if the location accuracy is not perfect and the lead times cannot be maintained.
Warehouse operations and stocks are driven by Inventory management systems or warehouse management systems. WMS systems manage locations, initiate and control transactions for in warding and outward shipments tasks coupled with inventory management besides interacting with external sources to receive advance shipment notices and to report back on warehouse inventory and transactions.
In all cases system transactions and physical transactions are very closely linked. System always initiates action and tasks that are executed by Physical operations.
Since system is the brain that drives operations and inventory, system inventory and physical inventory needs to be matching perfectly at all times.
Matching system transactions with the physical transaction is a must and very crucial in day to day operations. All system transactions have a bearing on physical transactions and vice versa. Therefore, process adherence to complete transactions is a must.
Taking a simple example, if an operator initiates a change of location of one particular part number for operational purpose and does not update system, the system inventory will show wrong inventory location and not match with physical location. Similarly, if the system initiates any transaction that is not made good on the location will impact stocks adversely.
In ongoing operation thousands of transaction keep taking place in the system and tasks keep getting generated and updated. Even in an RF driven operations scenario, there is always a need to ensure that every system transaction is closed.
Best practices in warehouse operations involve a daily audit of system transaction audit and location accuracy audit on a continuous basis on all shift. System integrity checks are also conducted frequently.
Finally a warehouse that gives important to inventory audits as much as to its operations reflects good healthy warehouse operations.
Inventory checking and counting is practiced as a daily activity. Inventory counting teams consist of system operators and shop floor operatives. Inventory counts are normally system driven and stratified where a percentage of locations or Inventory is verified as per list thrown up by the system. In a 4-week cycle or a quarterly cycle, all locations in the warehouse would have been counted, and system throws up inventory discrepancies and transactions that are then resolved by management. Annually wall to wall audits are conducted to count all inventory in the warehouse before starting a new database for New Year.
Besides system driven inventory counts, inventory audits are initiated by operations to verify process compliance and stock/ location accuracy.
Inventory Health is the report card of Every Warehouse reflecting is operational efficiency.
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