10 Tips For a Successful Distribution Center
Good practices are integral to the successful operation of distribution centers and warehouses. They help improve efficiency, reduce errors, improve time management, increase accuracy, cut costs, and streamline operations. Below are 10 tips to deploy best practices in distribution centers.
1) Record everything
Distribution centers have constant movement and transactions in and out of the facilities, and it can be easy to lose track of inventory that is not recorded properly. Therefore, ensuring all business is recorded is essential. And to track things properly, materials must be handled effectively. This means that everything must have a designated space and be put away in the correct spot, and the floor should be organized to improve workflow. For example, products that are fast fast-moving should be placed in areas that are easily accessible or visible. In addition, organizing inventory to make it easier for employees to record, locate, and move it helps improve efficiency and allows for easy recording and replenishment.
Tracking everything in a distribution center, like, for example, the 3PL at WSI Supply Chain Solutions, also makes it easier to identify potential issues and track performance. All movements and steps involved in a transaction should be recorded, and any steps that cannot be tracked must be eliminated or fixed. Key performance indicators, such as turnover, fill rate, accuracy, etc., should also be recorded to indicate inadequacies. These should be shared with employees to understand what is expected and what to work towards. This can help improve productivity and efficiency.
2) Implement automatic data collection
Data collection in warehouses and distribution centers has steadily moved towards automation. Data collection technology, such as a warehouse management system, allows products and information to be captured more quickly and effectively. Information is collected by scanning bar codes and identification tags, which is much quicker than logging numbers by hand or typing them into a keyboard. It also reduces the chance of human error during the tracking process, improving accuracy and allowing employees to stay on top of expiration dates and replenishment. Efficient and accurate information will enable centers to make better supply chain decisions.
3) Comprehensive training
Training is essential to productivity. Employees must be well-versed with their roles and responsibilities in the workplace and how to perform their job safely. Improper training can result in equipment misuse and pose health and safety risks to workers. This is a worthwhile investment, and while perhaps not the same as a financial investment, its payoff will be in safety and wellbeing for employees versus a more tangible line accounting line item.
For example, automated data collection will not be as valuable as a tool if the employees do not know how to use it properly. It will cause delays and potential inaccuracies.
Improper equipment use can result in workplace incidents that can damage goods or result in employee injury or death. For example, overloading a rack can affect its integrity and cause a collapse or items to fall, which will likely damage inventory and harm others working in the area. Therefore, operators must learn equipment safety and handling and be able to spot additional risks in the work environment (e.g., spills). It is also valuable to provide basic training to those working in or near more dangerous equipment to minimize risks.
4) Vendor compliance programs
Vendor compliance programs are an excellent way to improve the relationship between a business, its vendors, and distributors.
A compliance program is a set of internal policies and procedures within a business that ensures practices comply with laws, rules, and regulations. A vendor compliance program involves collaborating with suppliers, merchandisers, etc., to create a compliance program that satisfies all parties. This allows for easy movement within the supply chain. The goal of these programs is not necessarily to punish non-compliance but encourage all parties to contribute to overall efficiency. Vendor compliance programs can be created internally or by hiring a vendor compliance manager.
Vender compliance features can include:
- Using the same warehouse management system
- Having standard case quantities
- Similar product labeling and identification requirements
- Delivery policies
- Rules for merchandising and procurement
5) Cross-docking
Another beneficial distribution practice is cross-docking. Cross-docking is the process of transporting products directly from the supplier to the customer. This removes the middle man, thus reducing unnecessary time and money spent on shipping, delivery, handling, storage, and labor.
6) Improve the picking process
There are many types of picking, and one of the best ways to improve the process is to determine which method works best in the facility. Much of this is done through trial and error, but it is essential to understand the options and benefits.
For example, single order picking involves working on one order at a time and manually picking the item from the inventory. This is suitable for smaller or low-volume warehouses that do not have many orders daily.
In contrast, wave order picking is likely more helpful in a large distribution center. This involves grouping orders in waves to match shipping schedules. This helps reduce traffic in distribution centers and results in a faster turnaround.
Fetermining picking waves is easier with the use of warehouse management systems. It also helps businesses plan picking waves ahead of time.
7) Minimize manual work
Manual processes tend to take longer and increase the chances of mistakes caused by human error. Using automated systems and implementing space improvements can minimize touches and improve efficiency.
For example, warehouse management systems allow products and information to be captured more easily and quickly. Systems can also predict picking waves and help measure performance. Space improvement can involve having floor areas organized in order of priority, using a shipping carton instead of a tote, having automated sealing stations, etc.
8) Slotting
Slotting is a process that optimizes space and improves picking efficiency. This is done by analyzing and understanding the inventory and using this data to organize and categorize it.
Slotting allows companies to boost productivity, maximize warehouse and employee efficiency, improve workflow, and more. It can also reduce picking costs and errors by ensuring the products are in suitable spaces and that the needed quantities are available. Order picking can account for up to 50 per cent of the warehouse or distribution center operational expenses, so adding a slotting system can help reduce these costs. Slotting also helps reduce lead times and handling costs and allows for better inventory control and demand planning.
9) Ensure warehouse replenishment
Continuous inventory recording and maintenance can help reduce time and costs. For example, if an item is out of stock, the distribution center will need to order it and wait for it to come in. Reduced quantities may be ordered to account for the rush, increasing shipping and handling fees, the item may be needed for other steps, slowing down the supply chain, etc. Essentially, insufficient inventory can cause a halt in overall production. Therefore, keeping track of quantities and ensuring items are constantly replenished can minimize disruptions and improve productivity.
10) Evaluate practices often
Evaluations are crucial to improving productivity and efficiency and minimizing costs. Distribution center practices and procedures constantly fluctuate to match changes in items, inventory layouts, suppliers, etc. Therefore, it is vital to continuously review and evaluate processes and performance and make appropriate changes when necessary.