Avoid Fulfillment Woes

How to use a warehouse assessment to improve customer service and decrease costs.

Your warehouse this past holiday season was near capacity; you made it through the season, but it wasn’t pretty. The marketing plans for the new year and next holiday are up considerably. The executive committee of your multichannel company has made a decision that the company must meet the aggressive sales plan, and you have to find ways to stay in this facility for at least one more year. You have two months to come up with a new operational plan. What are you going to do?

A key starting point to improving multichannel operations and reducing overall costs is to conduct a thorough warehouse assessment. To measure the operational efficiency of your warehouse, start with an on-site audit to evaluate the operation against a set of internal expectations and external, industry-accepted best practices and averages.

Before you begin an overall assessment, know that the basis of real improvement must always be the result of actual measurement. Without the metrics for what’s being done, an assessment can’t serve as a basis for advancement.

Internal operations reports are indispensable. A serious audit should include weekly productivity reports from all departments — including receiving; quality assurance; inventory control; replenishment; picking, packing and shipping; personalization
and gift wrapping; and back-order handling — in terms of units of work processed per paid hour and reporting of errors.

Discover Patterns

Other areas that require attention are inventory functions such as stock put-away, shrinkage control, inventory counts, initial order fill rate and supplies inventory. Analysis of returns reports in particular can help in discovering patterns that need improvement.

Once you’ve gathered all the research and data available for warehouse operations, compare desired service standards with your company’s actual performance. One avenue of analysis is internal data compared with benchmark figures from such sources as trade publications or consulting firms. But it can be extremely useful to compare actual figures from the operations reports of other merchants of comparable size in the same industry. Be careful what period of time you’re comparing yourself in: low, average or peak periods of productivity.