Even Good Distribution Centers Do Dumb Things; Worst Practices to Look Out for

June 1, 2012 - PRLog -- The modern distribution center is a high-tech marvel, one that uses sophisticated software, state-of-the-art equipment, and adept management to move dizzying volumes of products at stunning speeds.

Even so, foolish and inefficient practices can find their way into warehouses, often because managers don't know any better.

Kate Vitasek of Supply Chain Visions has been cataloging dumb DC practices, and she has found some doozies, such as a receiving dock on the second floor, an inventory labeling system that relied on Post-It notes, and a receiving shift that ended just as deliveries arrived.

In each case, Vitasek says, warehouse managers thought of an inefficient practice as a legitimate solution to a challenge.

In the June issue of "Distribution Center Management," Vitasek and others identify 10 dumb practices and 10 smart solutions:

Dumb Idea:
Letting your inventory walk away at the end of the shift. Theft is a problem in many DCs. Petty pilfering is one thing, but some warehouses are victimized by wholesale looting. Fred Kimball of Distribution Design once saw a government-operated pharmaceutical warehouse in another country that lost product worth $600 million in one year, mostly because of employee theft.
In another case, Kimball saw a 3PL that handled a precious metal worth $125,000 per pallet -- without the processes and security systems to protect it. Sure enough, the inventory began disappearing. Each brick was worth $4,000, and an employee could get $1,200 at a scrap yard.
Smart Solution:
If you're handling valuable product, invest in employee background checks, drug testing, surveillance cameras, tip hotlines, and security guards.

Dumb Idea:
Leaving refrigerated goods on the forklift during lunchtime. Some DCs take their lunch breaks a little too seriously. "I did a project for a company where everyone in the distribution center takes lunch at the same time, leaving product mid-pick on vehicles and no loading occurring," says one consultant who asked not to be named. "Sometimes this practice took temperature-controlled product out of its zone."

Smart Solution:
Stagger lunch breaks, or at least coach employees to move temperature-sensitive product to a temperature-controlled area before breaking for lunch.

Additional dumb ideas and smart solutions appear in the June issue of "Distribution Center Management."