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Thread: Cutting warehouse losses? how to?

  1. #1
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    Default Cutting warehouse losses? how to?

    Hello guys, I'm new here, but recently took on a new role with a international logistics company that has number of cross-dock warehouses that i will manage. Problem is they are all making constant big losses. Every month each warehouse makes thousands and thousands of loss.

    They do only cross dock there. I cant get the fee's up , as i would only charge more to myself.. But there are problems, just took a visit at the local warehouse and what i saw was
    1.pallets.. no accountability so employees use them wherever they want to and send them out without any records - so company spends roughly another thousand to buy them over every month.. and it keeps going and going..
    2.Some employees are lax.. Standing there having a chat for half an hour etc.. while lorry standing at the dock empty.. So maybe let go one of the guys and make others work efficiently non-stop? Or is it bad idea..
    3. No real IT infrastructure. Only some paper based orders from the office, no real assigned places for the pallets, so warehouse operators spend lot of time looking for the proper load to be loaded/unloaded..
    4. No pallet racks.. Even though cross-dock is fast paced and most pallets are there no longer that for couple of hours (ideally) some do stay in warehouse for 1-2 days and export to some non-eu countries might stay in for week or longer... and take up looooots of space.. I think they could be put up on racks. Or not?

    And some other minor stuff.. But jezz.. I'll need to fix it up, problem is I was working with 3PL warehouses and it's bit different there (maybe??). Especially hard that i'm coming to a place that is already working for years and everybody are used to what is going on there, so i think they will go against any changes..

    Looking for ideas from all of you guys..as well as advice and theory how to increase productivity and decrease expenses? Where there could be additional problems or potential problems here? From your own experience..

    Highly highly appreciated for any help or advice guys

  2. #2
    Silver Member Alexandoy's Avatar
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    Default Re: Cutting warehouse losses? how to?

    I get the impression that your company is an informal organization that is lacking in good policies. That lack of recording system for the outgoing pallets is like a deliberate temptation to the workers. In any warehouse that I knhow, anything you bring out, no matter how small the item is, should be checked by the guard and properly recorded. In fact, some warehouses are so strict that they search the body of the outgoing worker (probably for suspicion of some items being taken out). I guess what your company needs is an efficiency engineer or a methods analyst who can establish a good system manual of operations.

  3. #3
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    Default Re: Cutting warehouse losses? how to?

    Obviously any business that is losing a large amount of money due to missing stock clearly as a huge problem to deal with, and any measures put in place now won't go down well with the current employees as they will see extra security measures put in place as a sign that as an employer you don't trust them.

    Personally though that wouldn't stop me from going ahead and doing it anyway, and usually while I am all for liaising with staff about any changes you are making, on an occasion such as this then the main issue is making sure that you get the business back on an even keel and plug where the money is being lost. If the staff don't like the measures you bring in to do that, then it's just something that they will have to either live with or leave.

  4. #4
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    Default Re: Cutting warehouse losses? how to?

    It sounds as though online management at these locations is lacking, possibly due to the lack of organisation. A foreman doesn't know to yell at the guys standing around unless he has the paperwork to say they should be loading that lorry.

    Introducing computers could cost a bit, but printed barcodes for palletes and location tracking software would mean that they would know where anything should be in the warehouse at any time. Combined with cameras, it could quite easily reduce the loss by letting you know how the items were being taken. The other thing that computers could manage would be organisation: this lorry is due at this time, contact this customer for problems, etc.

    Something we did do that wasn't popular but that dropped pilferage right off was after introducing the new systems we reshuffled the workers. Working with all new people it broke up any group schemes they had going and made it hard for them to fall back into old habits or cover for each other.

  5. #5
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    Default Re: Cutting warehouse losses? how to?

    Below are my suggestions based on my experience (I have worked in supply chain before and am currently with a IoT firm):

    They do only cross dock there. I can’t get the fee's up, as I would only charge more to myself. But there are problems, just took a visit at the local warehouse and what I saw was

    1.pallets.. no accountability so employees use them wherever they want to and send them out without any records - so company spends roughly another thousand to buy them over every month. and it keeps going and going.
    My Answer: Pallets are indeed a hidden cost. You have already crossed the first step which is identifying it as a non-performing asset (NPA) in the cross dock. BLE is a technology which is very effective at fighting this. The savings can be obtained through lower insurance, higher utilization, lesser detention cost (due to availability) and ageing. Here is a simple calculator you can use to “Calculate” Your Savings

    2.Some employees are lax.. Standing there having a chat for half an hour etc.. while lorry standing at the dock empty. So maybe let go one of the guys and make others work efficiently non-stop? Or is it bad idea..
    My Answer: Bad idea. I would suggest you get the other aspects in place before dealing with the staff. Once you have visibility in your cross-deck using technology, you can train the manpower to do more productive work - which may also keep them more motivated. With technology, you can set measurable targets for instance (Example: The detention time must not be more than 5 hours) and then you can build incentive schemes based on that for the staff.

    3. No real IT infrastructure. Only some paper based orders from the office, no real assigned places for the pallets, so warehouse operators spend lot of time looking for the proper load to be loaded/unloaded..
    My Answer: You can use our BLE based technology here for both pallet management and instant inventory identification.

    4. No pallet racks. Even though cross-dock is fast paced and most pallets are there no longer that for couple of hours (ideally) some do stay in warehouse for 1-2 days and export to some non-eu countries might stay in for week or longer... and take up looooots of space. I think they could be put up on racks. Or not?
    My Answer: Depends on how your warehouse is structured. If your pallet utilization before is better for instance, you may not need the amount of racks you envision.

  6. #6
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    Default Re: Cutting warehouse losses? how to?

    That's pretty messed up,
    Add accountability and track every damn thing, packeges in and out, where to where and when, Employees in and out, working hours, Every damn thing should be in well maintained and easy to access record. Based on that records many issues will get settled on their own and remaining will need some wide open eyes.

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