Solutions To Warehouse And Inventory Management Problems

While most of the attention is focused on sales and production, a great deal of potential savings is usually overlooked in the management of warehouse and inventory concerns. This critical component of supply chain management is one area where a significant improvement in operations can be effected with relatively little cost, unless additional warehouse capacity is found to be necessary.
Although warehouses vary greatly in size and type, most of them share the same type of problems and solutions. To get an overview, managers should review the following common warehouse and inventory issues:
Wrong quantity. Having the wrong quantity may lead to stock outages that will result in lost sales or production. On the other hand, too much of an item will increase carrying costs and tie up capital in unneeded goods or materials. A system must be designed to check the accuracy of checking when receiving and picking out stock.
Internal and external theft. Cases of both internal and external theft are very common. One tool that may help is the installation of a sufficient number of high quality CCTVs. However, other means must also be devised since these alone are not sufficient to deter theft.
Wrong location of stocks. Mistakes in location are varied. It may be that the location of items is wrong as when the items most frequently picked are located in the innermost part of the warehouse, making the picking of stocks take longer. It can also be that an item cannot be located because it was placed in the wrong location or wrong data was encoded in the computer.
Wrong labels. A mistake in labelling may result in the needed item not being found. It may also result in wrong handling and storage. Procedures must be established to prevent such occurrences.
Frequent accidents. The damage caused by an accident prone warehouse is very much underestimated. It is not only the direct expense spent to compensate affected workers that must be counted. The damage to morale due to working in an unsafe environment has a substantial effect on productivity.
Inadequate capacity. Frequently the lack of space is a factor in warehouse inefficiency. Items get lost or become difficult to find if it is too crowded. Also, damage to items is more likely in congested warehouses.
Inadequate training. When personnel are not well-trained, not only will they be less productive but many errors will also be committed. Some o f the most frequent consequences of a lack in training are poor productivity in picking stocks, and mishandling of items, thus causing damage and accidents.
Outsource or in-house. Ultimately, management has to consider if it would be better to simply outsource the warehousing function. Take note that many considerations affect this decision besides cost alone. Among these are that the quality of service may suffer, confidential information regarding your item sales will be known by the provider, and the impact on morale of the workers.
To know more about this topic, BusinessCoach, Inc., a leading business seminar provider, conducts a seminar entitled “Effective Warehouse and Inventory Management.” Contact (02) 727-5628, (02) 727-8860, (0915) 205-0133 or visit for details.
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*Originally published by the Manila Bulletin. C-4, Sunday, September 16, 2012. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.