Road to Successful Supply Chain - The Warehouse Assessment
The first step on the road to inventory accuracy must be the stores assessment. If this process is not carried out it will be impossible to set the base line for any improvement projects and to ultimately determine if any improvements have taken place. Some of the questions and a more detailed analysis of what should be included in this assessment are discussed later in this blog.
Beware of assessing yourself, it is easy to cheat. Find a reputable consultant and ask for an independent assessment and a detailed report. It is always good to get a fresh pair of eyes looking at what you do and how you do it.
Training for the Warehouse Team
The improvement implementation project
Cycle counting training
Implementing cycle counting
Measuring project performance
Post project assessment
01 - Training for the Warehouse Team
I have found that in virtually all the stores assessments that I have conducted, they have shown that there is an enormous lack of knowledge in the warehouse team of how to run an efficient and effective stores operation. The same also applies for those responsible for managing the stores.
For some reason, which I have never been able to fathom out, we continuously put own most inexperienced, untrained and uneducated, or should I rather say, ‘Not Yet Competent’, personnel in charge of probably our most valuable asset; our inventory. And, then we wonder why it goes missing!
Many managers admit that the store has always been the haven for the lame, the sick and the stupid. Often, new employees starting with a company start their careers in the store. All this must change; a job in the stores must become the function in the company that employees aspire to in the long term after a firm grounding and training in materials management.
The CSSC, Certified Stores and Stock Control program gives the people working in and around the store the necessary understanding to carry out their jobs effectively. The program covers every aspect of warehouse operation that is covered in the Stores Assessment.
Who should attend this CSSC, Certified Stores and Stock Control certification program? Well, anybody that works within the store, as well as those persons such as buyers, distribution and production supervisors who have a close association with the store and need to understand the correct functioning of the store and how they can assist in the smooth flow of materials through the organisation. And, of course the most important person, the Materials and/or Stores Manager.
02 - The Improvement Implementation Project
Once the stores assessment has been conducted and the training for the warehouse team in complete, the next phase of the process can be started. This phase involves analysing the assessment report to determine where improvements are required and putting a project together to address these problem areas.
Ideally, the project team should include the consultant, the store’s manager, and representatives from the warehouse team. It is important to include as many of the warehouse team as possible as we need them to put forward suggestions for change and improvement and for them to implement these changes.
Consensus must be obtained on what must be done, by whom and by when. A project plan is then drawn up with a project target date, the improvements that are expected and any budget that may be required to achieve the objectives.
This project team needs to meet formally on a weekly basis to review the project and to ensure that progress is according to plan.
The length of the proposed project will very much depend on the recommendations in the store’s assessment report as well as the general state of the stores/warehouse and estimated stock record accuracy. If things are bad, I would suggest a yearlong project. If the store has a reasonable sense of order this could probably be reduced to about six months. Typically, most of the projects I have been involved in have lasted about 9 months.
03 - Cycle Counting Training
Once the improvement projects are under way and housekeeping, item identification and locations are identified and marked, we can begin the next phase of the project which is the cycle counting training.
At this point we assemble all the warehouse team, including the store’s manager, back in the classroom for a one-day workshop on cycle counting and stock record accuracy. For this purpose, I normally use my one-day workshop in Stock Record Accuracy.
This workshop covers the reasons as to why stock record accuracy is important to a supply chain business and why monthly or annual stock takes will never improve your stock accuracy. It goes on to suggest the correct way to set up and start a cycle counting program and why we start the process with a cycle counting control group. The workshop concludes by discussing how to analyse variances between actual counts and computer records and a ten-point plan of how to implement the cycle counting process within an organisation.
The warehouse team learn that the most important aspect of cycle counting is that the process is carried out to identify system and procedure errors that cause inaccuracies in our inventory records. They begin to understand that the accuracy that results from the process is essentially a by-product of the cycle counting program.
04 - Implementing Cycle Counting
After the cycle counting training, the project team then expands their project scope to include the implementation of the cycle counting process. This then become a normal part of the project activities which are reviewed on a weekly basis.
05 - Measuring Project Performance
To enable us to determine if the project has ultimately been a success, we need to put performance measures in place as soon as possible after the commencement of the project.
The prime measure for the project is, of course, stock record accuracy but this measure will only normally be started once the cycle counting program is underway. However, there are a few other measures that can be put into place from the beginning.
Housekeeping in the store is a very basic measure. I have never found a messy store to be accurate, however, when a store is neat and tidy, there is a good chance that the warehouse team are taking a pride in their work and their workplace and accuracy almost become a by-product of this tidiness. If the company does not have a housekeeping assessment team, then why not start one and start in the stores. The Stores Record Accuracy course suggests some attributes of a house keeping program in the stores.
Picking accuracy is another measure that can be introduced. Use the third-party check of the items picked to create this measure and record the results. Identify the storemen that have high picking accuracies and reward their performance.
Probably the main reason for the store’s existence is to provide customer service to the manufacturing department, engineering department or the external customer depending on the goods stored. Set up measures to determine the level of service to these customers. At the same time talk to these customers and determine what their requirements really are and endeavour to improve the service to them.
06 - Post Project Assessment
Once the project has run its course, we normally perform a second assessment to highlight the improvements in the stores operation as well as to identify any areas that might require more work to bring them in line with a world class operation.
CFPIM, CSCP, SCOR-P, CPF, CS&OP, PLS, CDDP, CSCA, CDDL, CLTD, DDPP, DDLP, AEF, CSSC, CPIA Chief Executive Officer at Kent Outsourcing Services
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