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Warehouse Management
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“Managers today have to do more with less, and get better results from limited resources, more than ever before... A manager’s job is to provide the environment where individuals are internally motivated to do the very best job possible, in the very best spirit possible, to make the very best contribution possible.” --- Brian Tracy
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Job Description and Core Accountabilities of Warehouse Managers
Ability to negotiate Information technology skills Basic Finance Ability to make good business decisions People management skills Ability to motivate and lead large numbers of employees through communication and engagement
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Job Description and Core Accountabilities of Warehouse Managers
Cost-efficient warehouse operation Leadership responsibility Ensure warehouse is capable of volume requirements of the business Continuous improvement in cost- efficiency Long-term vision for future volumes and customer service
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Job Description and Core Accountabilities of Warehouse Managers
Safeguard the human and physical assets of the warehouse Management of projects Introduction of new initiatives Maintain/Form strong relationships with suppliers Develop/Manage relations within warehouse environment
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Job Description and Core Accountabilities of Warehouse Managers
Develop and maintain programs for hiring, training, and professional development Match skill and background of personnel to work required
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Job Description and Core Accountabilities of Warehouse Managers
Communication and motivational techniques to supervise, counsel, and discipline associates Performance evaluation system for promotions, wage increases, terminations
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What is the most valuable asset of the warehouse?
Question: What is the most valuable asset of the warehouse?
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Answer: People
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Six Basic Tenets of Warehouse Management
Accuracy Cost control Cleanliness Efficiency Safety Security
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Warehouse Management Trade-offs
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Warehouse Management Trade-offs
Increased throughput vs. reduction in labor costs Storage density vs. quicker pallet extraction Manual vs. automation
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Warehouse Management Trade-offs
Inventory holding costs vs. cost of stock outs Increased pick rates vs. accuracy Speed vs. safety
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Challenges of Warehouse Managers
Nearly 3,000 hours per year are lost in warehouses and distribution centers through inefficient processes 80% of managers are tasked with finding cost savings in existing operations On average, managers are tasked with finding nearly 20% of cost savings in their organizations
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Challenges of Warehouse Managers
The majority of managers suggested the most inefficient areas are: Inventory Control (53%) Picking (47%) Putaway and replenishment (45%) 1 in 6 managers will not review workflow processes until a customer complains.
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Challenges of Warehouse Managers
Pressure to reduce operating costs Reduce costs but increase customer service Achieving the perfect order Key Performance Indicator (KPI) used to measure the perfect order: Perfect order – delivered on time, in full, in perfect condition, and with the correct paperwork
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Challenges of Warehouse Managers
Shorter order lead times and stock availability Order lead time – the length of time between placing of an order and the receipt of the item by the customer Low involvement purchases = high likelihood of switching & search for lowest cost Competitive advantage gained from fast, timely, and accurate delivery
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Challenges of Warehouse Managers
Delivery through multiple channels
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Challenges of Warehouse Managers
Smaller, more frequent orders Just-in time methods Increasing Internet sales
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Challenges of Warehouse Managers
Smaller, more frequent orders Efficient consumer response (ECR)
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Challenges of Warehouse Managers
Greater fluctuations in demand Caused by consumer power > manufacturer power Seasonality (e.g. Black Friday, Cyber Monday, Xmas, etc.) Companies have to run lean during slow times and ramp up during peak periods
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Challenges of Warehouse Managers
Increases in stock-keeping units Proliferation of product variants Variations in packaging, sizes, etc.
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Challenges of Warehouse Managers
Increases in stock-keeping units Generic retailer brands increasing Postponement strategy – holding stock of basic product and adding ‘extras’ when orders are received. (i.e. bundling) (e.g. loading software onto computers post-purchase, adding memory to smart devices, etc.)
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Challenges of Warehouse Managers
Environmental Issues Reducing energy consumption Reducing waste Data and information transfer Track and trace information Data security to prevent hacking
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Challenges of Warehouse Managers
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Warehouse operations are generally not lean.
Lean Warehousing “Lean” means to remove any activity that uses resources but doesn’t create any additional value. Warehouse operations are generally not lean. Cross-dock centers and fulfillment centers can be lean. Moving stock quickly is key
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Wasting Space Wasting Time Lean Warehousing
Pallet stacking at half-height or quarter-height Part pallets of same product spread throughout warehouse Obsolete stock taking up space Wasting Time Defects (time spent correcting errors as misspicks) Inventories (congestion at inbound and outbound areas) Waiting time (bottlenecks at pick locations) Overprocessing (unnecessary processing steps such as labeling and checking)
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Wasting Energy Lean Warehousing
Transportation (Driving empty forklift) Idling vehicles (Due to operator or wait times) Inefficient machines (Due to maintenance issues or obsolescence)
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Question: Of these wastes, which is the most expensive one?
Lean Warehousing Question: Of these wastes, which is the most expensive one?
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Lean Warehousing
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The 5S concept: Lean Warehousing
Sort – remove any unnecessary items from work area Straighten – efficient and effective placement of necessary items in the work area Shine – clean the area and keep it clean Standardize – create standards and display them within work area Sustain – ensure continuous improvement and don’t fall back into old habits.
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Discussion Questions Explain why warehouse managers need the ability to negotiate. What are some ways a manager can safeguard the human assets of a warehouse? Why are relationships with suppliers important in warehouse management? What is the most valuable asset of the warehouse? Why?
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Discussion Questions Explain why high customer service, low cost, and low inventory are trade-offs in warehouse management. What are three major inefficient areas in warehouses? What is the “perfect order”? Explain ‘delivery through multiple channels’. Give examples in your country. Explain ‘ECR’. Explain the concepts of lean warehousing. Explain the 5S concept.
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