To run a successful warehousing business, it is important to define and track certain KPIs, as part of your business strategy. Meeting these indicators consistently can be the difference between satisfied customers and bankruptcy. Some of the more common ones are:
carrying cost of Inventory, cost per shipped order, time from picked order to departure, putaway accuracy rate, volume per man-hour and percentage of perfect shipments.

The percentage of perfect shipments is also known as the Perfect Order Metric; a perfect order is defined as delivering a complete order to the right customer, damage-free and at the right time. With four different sub-metrics to meet, it’s no wonder many warehouses struggle to achieve high POMs. With that said, managers can improve this KPI by addressing individual sections of the metric.

Two critical parts are:

• Having the right quantity of the right product on hand – This is an inventory-based feature, constrained in  part, by the amount of space the business has.
• Delivering the product at the right time – The business must have adequate/substantial resources in place; which also require space to be efficient.

From the breakdown above, it’s obvious that managers can achieve high POM numbers, if they have a firm grasp on their space utilization. However, to many managers, their constrains are rarely visible to them. Here are a few common ones:

• A typical warehouse is made up of sections like an office space, storage, packing area, maintenance, staging, returns etc. Each section is all vital for efficient running of the business, but they all require a fixed amount of room (space). At what point do you draw the line between the space required by staff/equipment and your inventory?
• Time wasted is another constraint calculated by how many times resources (staff and equipment) spend making several trips per day, between these sections.
• Time wasting can also occur when the warehouse is approaching full capacity. At around 85% full or more, staff tend to spend more time looking for SKUs while picking.
• Productivity issues also arise when the facility is less than 50% full; meaning there is too much space. It becomes an obvious problem when your staff is travelling too far (walking aimlessly) to pick SKUs/items.
• Space under-utilization also occurs when warehouses use bulk storage methods and don’t take advantage of the facility height.

When polled, many warehouses complain about balancing congestion while maintaining inventory space. The holiday season and the large spike in inventory carried has brought the issue to the forefront once again.

These non-obvious inefficiencies are no less of a problem than a reckless forklift driver or a supplier who’s always late. To address productivity inefficiencies, managers need to figure out how their staff work:-

• A restructure of the different sections may be needed to place areas that need to be close to each other, beside themselves. This will reduce the amount of time staff spend moving between sections.
• Depending on the picking method used, staff who work individually may need to have their work area reduced. This places everything they need within reach. On the flip side, for tasks that require a team, a larger but more efficient work area may be required. This allows them work smoothly without tripping over themselves.

To fix space inefficiencies, managers must:

• Identify both their static/storage capacity and the dynamic/throughput capacity. Knowing both grants them a more holistic view of the volume they can handle efficiently.
• Based on their SKUs, they need to figure out the right type of storage for the business. Not every product can use the minimalist method of floor pallet stacking, prompting the use of shelving and racking systems. Common ones inclde:

• Movable Shelving which is best used for the slowest moving SKU’s.
• Very Narrow Aisles offer efficient storage, by utilizing the full height of the facility.
• Double Deep Racking increases pallet density while providing a high number of pick faces.
• Pallet Flow Racking allows pallets to be moved from two sides and is best used for storing fast moving SKUs.

Other storage options include push back racking, tunnel racking and cantilever racking. Confused about which option will suit your facility? Contact Monarch Limited today.

• Shipping areas and receiving docks are some of the most under-utilized parts of a warehouse. They are designed around handling their ‘one’ role, but with a little modification, they can become more versatile. By building a mezzanine over a receiving area, storage space or a platform for machinery can be created.H

How does your business fare when compared to others in your industry? Are you hitting all  industry-accepted KPIs? Even if you choose not to compare, do you find there are inefficiencies that you can’t seem to explain? With the holiday season around the corner, few businesses can afford Consistent missing of deadlines.

Monarch limited is a leading supplier of warehouse storage equipment in the West Midlands. We stock new and refurbished equipment from the top brands in the industry. Looking for ways to maximize your existing space, increase productivity and hit high POM values this peak? Click here to contact us today; we’ll be glad to help.