Current Problems in Warehouse Management Facing Great Regional Warehouse - Report Example

Warehouse Management Report Executive Summary Every company dealing with the production and supplyof commodities to the customers require an effective warehouse management practice. Such a practice demands considerations from the management of the company or the firm to ensure that the performance of the department does not affect the efficiency of the company’s operations in terms of the use of the scarce resources of time, money and labour. The operations involved in the management of supplies include the ordering and order processing, storage of the commodities that are obtained from the suppliers and the management of the inventories in the warehouse and the stores. If these are effectively managed, problems associated with shortages, excesses and wrong location or wrong labelling of commodities are avoidable. This is a report of the current problems in warehouse management facing GreatRegional Warehouse. It is expected that if these challenges are addressed as recommended, they will be manageable, and the workers and customer experience will increase. Contents Executive summary ………………………………………………………...2 Table of content …………………………………………………………… 3 1.0. Introduction ……………………………………………………………. 4 1.1. Background ……………………………………………………. 4 1.2. Purpose of the report ………………………………………….. 4 1.3. Scope of the report …………………………………………….. 4 2.0. Discussion of Challenges …………………………………………….. 5 2.1. Ordering and receiving ……………………………………… 5 2.2. Identification and holding …………………………………… 6 2.3. Dispatch of goods ……………………………………………. 6 3.0. Root cause of challenges …………………………………………….. 7 4.0. Warehouse management solutions …………………………………. 8 4.1. Inventory Control theories ………………………………….. 8 4.2. Warehouse layout principles ………………………………... 9 4.3. Warehouse management technology ………………………… 9 4.4. Upgrading plan development ………………………………… 9 4.5. Communication ……………………………………………… 10 5.0. Conclusion and recommendations …………………………………… 10 References ………………………………………………………………… 13 1.0. Introduction 1.1. Background Warehouse management has been a problem at GreatRegional Warehouse for a long time. The problem has contributed to massive shortages in some commodities in some of the main stores. The shortage is associated defective keeping of inventories and records. This has led to the warehouse making orders that do not tally with the actual need. When supply is made, there is also a great problem when it comes to the storage of the commodities in the stores, some of them cannot be located thereafter and during dispatch, the inventories in the stores are always not up to date. These problems are manageable through effective warehouse management. 1.2. Purpose of the report This report has been prepared with the aim of providing a deeper insight to the management on the challenges affecting the warehouse and devising ways in which the challenges can be managed. The report will provide a possible long-term solution to the problems affecting warehouse management which when adopted will go a long way in improving operations and service delivery in the company. 1.3. The scope of the report This report will explore the challenges affecting every section of the supply chain and warehouse management processes. The report will also look into the challenges to identifying the cause and recommend solutions based on the warehouse management principles and theories that are known. The decision to adopt these recommendations, however, lies on the management. The report only proposes the solutions to the challenges. 2.0. Discussion of the challenges The main objectives of warehouse management are to enhance customer service through provision of timely service, keeping effective track of warehouse items and commodities, minimizing the physical efforts and cost of goods movement in and out of the stores and provision of efficient communication networks with the customers (Bolten 1997, p. 24). The challenges facing the company limit the achievement of these objectives and hence threaten to cause customers mistrust. In preparation for this report, information was collected from various departments that are involved in the management of supplies, storage and dispatch of commodities from GreatRegional Warehouse. The information obtained through one on one interviews with selected workers in these departments related to the challenges that each face in managing the commodities and logistics at his or her job. Workers from the stores, order processing department and purchasing and supplies departments were interviewed to assess these challenges. What was clear from their explanations is that none of them was satisfied with the way the warehouse handled its operations. However, each of the departments blamed the others for the challenges faced by the system. The challenges identified were categorized depending on their location along the warehouse management chain of activities. These include ordering and receiving of supplied goods, identification of goods in the stores, holding of the commodities in the stores, dispatch of the ordered goods and the packing or shipment of the goods. 2.1. Ordering and Receiving of Goods The warehouse orders and receives goods from external suppliers. After the goods are received in the warehouse, the warehouse takes responsibility for them (Emmett 2005, p. 231). During this time, it is expected that the warehouse have a system that checks the goods against the orders forwarded to suppliers, verify that the goods are of the correct quality and quantity, check for damages and fill the reports of ordering. These activities ensure that the warehouse obtains the commodities that are paid for in their right quantities and quality. However, our challenge in this area is that it is difficult to organize our affairs. The orders forwarded to the supplies department from the various stores are not up to date. The quantities indicated are usually less or in excess of what the stores require. This results to accuracy problems while ordering the excesses and shortages of some important commodities hence. 2.2. Identification and holding of goods in the stores When already in the stores, commodities require to be sorted and arranged in order of the store keeping unit numbers. This ensures that there is ease of access to the commodities required when dispatching to the retail centers (Gattorna 1998, p. 276). It also helps to keep a record of the available stock, which will be important in guiding ordering from the suppliers. Our challenge in this area is that we cannot keep efficient records in the stores. Our store records are no more that 50% accurate and the home-based storage system is not being used efficiently. This is the reason the commodities are not being arranged according to the SKU numbers, and it is hard to locate goods in the stores. When the material is ordered from the retail shops and is not located in time in the stores, it is either considered out of stock or shipped at a later date. When considered out of stock, there is a likelihood that it will be included in the next order to the suppliers. This is the origin of excesses. 2.3. Dispatch of orders and shipment The retail centers make their orders to the warehouse periodically when their stocks are out. Since they sell the commodities in retail, it is expected that some of their orders will be in the form of unit commodities and not packs (Richards 2011, p. 198). There then arises a problem in the warehouse when commodities cannot be broken into units due to the problems associated with re-packaging and storage. This means that the orders are dispatched in excess of the ordered, taking up space in the carriers and making some of the necessary commo0dities be left out. The left out commodities take up more space in the stores interfering with the storage arrangement and records keeping. Reduced space in the store causes disarrangement of goods. To locate a specific commodity becomes a problem, and the challenges become a vicious cycle. 3.0. The root cause of the problem GreatRegional Warehouse has a problem in warehouse management. The problem spans over the whole process of ordering and acquisition of goods, the identification of goods in the stores, storage and dispatch of the goods. From the analysis of the challenges above, the root causes of the problem are several. First, there is a defective commodity management system in the warehouse. This has resulted to the warehouse having inaccurate records of commodities available resulting to excesses and shortages. Secondly, the workers are not skilled on the use of home-based storage system. Even if the system is in place, there is limited use. Thirdly, there is ineffective warehouse-stores communication. When this is so, the commodities, not on stock are not communicated to the sale stores, and they, therefore, keep ordering. Further, the issue associated with the inability of the store to dispatch unit commodities, hence dispatching more than necessary of the same commodity increases the shortage of the necessary but left out commodity in the retail stores and excess of the unwanted. However, it is important to note that the storage space in GreatRegional Warehouse is enough to hold all commodities that are coming from the suppliers and to stock effectively the retail stores only if effective management of the warehouse is ensured. The reason behind this is that with effective management, there will be less challenge in terms of excesses and late dispatches that are taking more space in the stores. 4.0 Warehouse management solutions The challenges facing GreatRegional Warehouse concerning warehouse management are a barrier to the provision of quality services to the customers. This significantly risks the business of the company in terms customer loyalty and profits. As observed, most of the errors in the stock management are leading to a vicious cycle of problems that will ultimately be a challenge to tackle. However, the solutions to these challenges are available and easy to implement. A major problem identified in our warehouse management, which appears to be the root cause of all the others is inventory control errors. The GreatRegional Warehouse has a big challenge when it comes to tracking and managing the amount of stock getting into the stores and that leaving the stores. Inability to have the right quantity of the needed commodity available at the time it is needed is a problem that needs immediate address. As a solution, an application of the inventory control theory is required. 3.1. Inventory Control Theories There are several inventory control theories that are applicable in ensuring that there is efficient stock control. The theory that is recommended in this situation is the Economic Order Quality and Reorder Point theory (Saxena, 2003). This theory helps the warehouse management to determine when a transaction to replenish the stock should take place and the quantities required to get the order done. As such, there is a balance in the cost of ordering the stock and that of holding them in the warehouse stores. When this theory is effectively implemented, it accounts for the periodic warehouse demand, the cost of ordering, products prices and values and the estimated holding cost. 3.2. Warehouse layout principle The warehouse should also have a simple layout that allows easy and less tiring access to commodities by the staff (Waters 2007, p. 354). This allows the workers to locate commodities in the warehouse easily, making it easier to dispatch ordered commodities with ease. This reduces backlog and the need for re-shipping of products. It also makes it easy to make periodic accurate audits of the warehouse. A rotational method of First-in First-out (FIFO) should be applied. This ensures that commodities are not stored for long and reduces the storage and holding cost. 3.3. Warehouse Management Technology The use of technology in GreatRegional Warehouse management practices can be a sure way of ensuring efficiency. In as much as, I cannot suggest an immediate installation of a technology software into the system. I will recommend that the proposal below be put into consideration. First, there is an existing software in the warehouse computers but it is not being used. The reason behind the limited use is probably the lack of awareness among the workers, some of whom have not had career development training for a long time. Before upgrading the technology, it is necessary to first use what we have at hand, train the workers on the use of the new computer system already installed together with the manual record keeping. The efficiency of this will guide on the upgrading plan of the technology to incorporate the external links with suppliers and customers. The importance of this is that we will have a chance to keep our house in order before being exposed to customers who might rate us wrongly (Ten Hompel & Schmidt 2007). 3.4. Upgrading plan development The GreatRegional Warehouse needs to have a plan that will be aimed at enhancing the management of the warehouse operations. The plan will be an important tool in seeing to it that there is efficient management of all operations with the aim of preventing future warehouse operations failure. The plan will be made with the involvement of all the stakeholders and incorporate views from all departments and if possible each employee. Involving key suppliers and customers in the planning will also be a necessary step in making the plan adaptable to the external, as well as internal environment. It is, therefore, the responsibility of the management to ensure that a strategic plan is. For this, I wish to make several recommendations that should be in the plan. First, there is a need for the warehouse to adopt new and modern methods of stock and inventory management. The use of bad codes in record keeping is an efficient and relatively cost-effective record keeping method. Secondly, installation of computerized control of stock under a working intranet is necessary. The effectiveness of this is that there is ease of communication between the stores and the warehouses, which limits errors in stock keeping and orderings. Thirdly, a periodic employee training on emerging issues is necessary. It does not only enhance the profitability but also increase job satisfaction and motivation, which are important in improving productivity. 3.5. Internal and external communication Warehouse operations require effective communication both within the warehouse and with the suppliers, subsidiary stores and customers. Use of office telephones to make orders is not effective. Clear order details should be when ordering commodities for the warehouse or the retail centers. Similarly, effective communication between the stores and the centers will reduce the challenge of having to deliver excesses of a single commodity due to the shortage of packaging facilities. The centers could provide the empty packages used for previous deliveries to facilitate packaging of the current orders requested in units. 4.0. Conclusion and Recommendations Warehouse management is an art that every warehouse should learn (Berg 2007, p.231). It has several principles and practices that each of the employees should learn to use and efficiently manage the operations of the company. When these operations are, there is an improvement in the customer service and satisfaction, which goes a long way in ensuring that the warehouse and its affiliate stores remain relatively relevant in the field (Tompkins 1998, p. 36). GreatRegional Warehouse requires implementing effective warehouse management practices to handle the challenges that affect the warehouse (Pienaar & Vogt 2009, p.367). This report provides a detailed view of the challenges that the warehouse faces in its operations. It also digs deep into these challenges coming up with the identified root causes of the problem and from this giving the solutions. From the assessment and the subsequent report, the challenges affecting GreatRegional Warehouse are manageable both at the internal level and at advanced level. This report, therefore, recommends that the following list of activities be used to provide adequately for improvement of warehouse management process. a) Withhold all warehouse operations for one week and update the stock records as at that time. This will ensure that the warehouse re-opens with a balanced record of goods in stores. b) Review the inventory control process of the company and compare with the records already available. c) Develop communication tools within the warehouse and with the retail stores to manage orders efficiently. d) Arrange stock in the respective shelves and locations following the SKU system. e) Train the warehouse workers on the use of the computerized software that helps manage warehouse operations. f) Upgrade the warehouse management software to include suppliers and customers. g) Schedule quality improvement forums to collect information from all stakeholders and implement their views where necessary. h) Schedule periodic employees training and development to enhance quality performance If these recommendations are, I am confident that the GreatRegional Warehouse will achieve its objectives of ensuring quality service to the customers and efficient management of stock. There will be incidences of stock excess and shortages, customer and suppliers complaints. The recommendations will also serve to reduce significantly the overall cost of holding excess goods in the stores and repeated shipping of goods to retail stores. The risk of having goods that are long overdue in the stores due to poor stock management will also reduce. References Berg, J. V. D. (2007). Integral warehouse management: the next generation in transparency, collaboration and warehouse management systems. Utrecht, Management Outlook. Bolten, E. F. (1997). Managing time and space in the modern warehouse: with ready-to-use forms, checklist & documentation. New York, AMACOM. Emmett, S. (2005). Excellence in warehouse management how to minimise costs and maximise value. Chichester, West Sussex, England, Wiley. http://site.ebrary.com/id/10302059. Gattorna, J. (1998). Strategic supply chain alignment: best practice in supply chain management. Aldershot [u.a.], Gower. Pienaar, W. J., & Vogt, J. J. (2009). Business logistics management: a supply chain perspective. Cape Town, Oxford University Press Southern Africa. Richards, G. (2011). Warehouse management: a complete guide to improving efficiency and minimizing costs in the modern warehouse. London, Kogan Page. Saxena, J. P. (2003). Warehouse management and inventory control. New Delhi, Vikas Pub. House. Ten Hompel, M., & Schmidt, T. (2007). Warehouse management automation and organisation of warehouse and order picking systems. Berlin, Springer. http://site.ebrary.com/id/10150930. Tompkins, J. A. (1998). The warehouse management handbook. Raleigh, NC, Tompkins. Waters, C. D. J. (2007). Global logistics new directions in supply chain management. London, Kogan Page Ltd. http://www.books24x7.com/marc.asp?bookid=18821. Read More