According to a catalog operations maxim, when it comes to picking and packing orders, the best-handled product is the least-handled product. Simply put, if you’re seeking to reduce costs in the warehouse, one objective should be to minimize merchandise handling in your picking and packing areas.
How can you achieve that goal? Below, a few suggestions.
Reconsider the placement of items in your warehouse
For most catalog companies, it makes sense to group like items in the same area. In the Roanoke, VA-based distribution center of outdoor gear, apparel, and home decor mailer Orvis, “we hang the bulk of our women’s product, so we try to stock it hanging and pick it hanging and pack it,” says director of operations Andrew Travers. “Naturally, we don’t stock the hanging products where we stock the chairs.”
But Debra Ellis of Barnardsville, SC-based operations and marketing consultancy Wilson & Ellis Consulting, advises placing products by their movement rather than their category. For example, a cataloger/retailer of office supplies set up its distribution centers like its stores, with paper in one section, pens in another. But the company’s mail order buyers typically ordered pens and writing paper at the same time. Placing these items in close proximity helped the company reduce pick travel time and improved productivity.
Before you start rearranging your warehouse, review the flow for every product, documenting every movement and activity and the reasons for the process from receipt to shipment. Then analyze product movement — does it make sense?
Put your best-sellers up front
This may seem like common sense, but many catalogers still fail to grasp the concept. Your goal is to prevent pickers from having to travel all over the distribution center. At Orvis, the top-selling products “are lower and closer to the outbound floor,” says Travers. “It makes them much easier to ship.”
Along the same lines, Wilson suggests placing high-volume items close to the packing stations. This way, up to 80% of the orders can be filled in the high-volume zone. Travers agrees: “Because our pickers can go down one or two aisles to satisfy the demand for our high movers, we are able to have efficient stocking and picking.”
In 2001, Omaha Steaks rearranged its inventory to put high-velocity items up front in its flow racks for increased picking per hour, says Ron Eike, director of operations. The result? A 22% reduction in the food cataloger’s labor costs per item picked.
Most companies are well aware of their best-sellers. If you’re not sure which products move faster than others, simply run a report asking for all items replenished more than three times a week, suggests Framingham, MA-based operations consultant Wayne Teres.
Handle with care up front
Nothing slows down a picker more than having to take special care in the handling of products. So if you’re shipping fragile items such as glass figurines or porcelain teapots, try to have your vendors to do the prepacking. This way items come to you safely and securely packaged and require minimal additional packing for shipment.
This could slow you down at the receiving stage, if you unpack every single item to check the quality. Merchandise from vendors known for excellent product quality should not require inspection of every piece, however; you can typically do a few spot checks and then receive the lot. For vendors with lower standards that do require inspection for every item, you may consider evaluating the associated costs of doing business with them — perhaps it’s time to replace the vendor or the product.
If it’s not possible for your vendors to prepack merchandise, try pre-packaging the items when you receive the products. It may be a little more work at the receiving end, Teres says, “but you’ll find that it reduces breakage and makes a better presentation to the customer as well.”
Separate singles from multis
Separate your orders by single items, multiline items, and hard-to-pack orders — which most define as bulkier products or any order exceeding six items. “Efficient packing requires a rhythm,” Teres says. If your packers keep switching between single and multiline orders, it slows them down. To maintain an orderly flow, Teres suggests putting novice packers on the single-line orders and letting the seasoned workers tackle the more challenging orders.
Invest in packer-friendly technology
A healthy packer is a happy packer and, of course, a more productive worker. So anything you can to to help packers cut down on repetitive motions and other hazardous conditions will likely improve productivity. Omaha Steaks this past June installed “ergonomic” packer-friendly supply stations. Before the arrival of the new stations, some Omaha Steaks workers suffered repetitive motion injuries because the collaterals — literature that is inserted in outgoing packages — were stored at ackward angles that forced packers to reach for them, Eike says. The new packing stations are panoramic, literally wrapping around the packers, which cuts down the distance that the packer must reach.
Keep packing stations well stocked
Make certain that your packing stations have enough of the necessary boxes, envelopes, tape, dunnage, collaterals, and wrapping paper.
And periodically reconsider your choice in packing materials. Many mailers find that sometimes the little things aren’t so little. At Hobby Builders Supply, a Doraville, GA-based cataloger of dollhouses, “we switched our packing tape because it was taking too long to wet” to make it stick, says operations manager Leta Reynolds. “Now we have the straight gun tape,” which makes the process faster and cheaper.
Never forget the customer
Though cutting your costs and making your distribution center more efficient is a worthy goal, always keep the customer in mind. Says Orvis’s Travers, “Some of our most important measurements also include quality and service measures. It isn’t just about cutting costs. Everything in the distribution center requires a balance.”
In short, it’s important to honor the brand and its buyers first and foremost. As Travers says, “You can’t go making changes without first thinking how those changes are going to affect the customer.”