PurchTips edition #119

Whether they are happy about it or not, it is becoming more and more common for purchasing professionals to be made responsible for management of the warehouse. Therefore, do not be surprised if warehouse management is added to your list of responsibilities in the near future.

To prepare for this trend, let’s explore the similarities between purchasing and warehouse management.

Purchasing professionals love to use metrics. And metrics are helpful in improving warehouse performance, too. Art Avery, the Principal Consultant for warehouse layout consulting firm Avery and Associates, suggests starting with these metrics:

• Pick lines per hour
• Orders processed per hour
• Age of oldest unshipped order

Like Purchasing, warehouse management has many best practices. A couple best practices Avery recommends are using effective slotting tools and bar coding.

Effective slotting tools include the placement of high-volume items close to the point of shipping, use of clear slotting information under each item on the shelf, using the same slotting information on pick documents, and sorting the slot numbers into a sequence that supports a “no-backtrack” path for the picker.

Bar codes can help ensure that the right incoming product is put in the right place and that the right outgoing product is picked in the right quantities. Avery notes that “by using bar code picking, not only can you pick faster, but you can also pick with virtually 100% accuracy.” In his experience, Avery has seen bar code implementations pay for themselves within six months, which leads me to the most attractive aspect of warehouse management for purchasing professionals: the opportunity for cost savings.

Avery shares that fixing an inefficient warehouse operation can produce labor cost savings of 30 to 50%. So even if you’ve never dreamed of being the purchasing and warehouse manager, such an expanded role may help you deliver more measurable bottom line results.

To learn more about warehouse and inventory management, consider the online course “Profitable Inventory Management and Control.” Learn more by clicking here.

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