F. Curtis Barry & Company Blog

Through the hundreds of operational assessment projects we have worked on over the years, we have compiled the following quick-hitting list that will assist in reducing your operating expenses in the distribution center.

Here is a summary:

1. Efficient receiving. Inventory accuracy and product flow through the distribution center all start with receiving. The single biggest improvement companies can often make is to develop and implement vendor compliance policies.

2. Reduce freight costs. Outbound freight now exceeds direct labor in many distribution centers. Don’t be too proud to ask a consultant to help reduce your cost of shipping and to help identify areas on your carrier contracts that will reduce your rates. Many times these consultants will work on a project basis or on a shared savings basis. There are too many dollars at stake not to have someone help you.

Is your distribution center running out of space? Did you feel the pressure of needed space this past Holiday season? Considering the following tips could add on two to five more years in your facility. Here are the top factors we review during an operational assessment when looking at warehouse layout to improve capacity.

1. Thoroughly understand the flow and utilization of the current layout, including rack configuration, slotting/pick philosophy, receiving, putaway, replenishment, inventory management, and packing and shipping. Include peak seasonal trends and a thorough volume analysis of inbound and outbound product flow.

It seems never-ending, but yes, its time that you kick-off your operational audit in order to identify those problem areas from this past Holiday season. This should give you enough time to implement any recommendations, plans and strategies developed to prepare for the upcoming Holiday season. What are the objectives you and your management team have set for improving operations?

Here are 8 steps for determining what changes will be most beneficial to your operations:

Many multichannel businesses are partners with marketplaces like Amazon and eBay, and big-box retailers like Sears, Walmart and the like.  With them, you’re not just processing orders, managing inventory and agreeing to performance standards.  Working with one of our clients recently in their call center’s support operations for their marketplaces, we focused our attention on the cost of an error.  

When was the last time you conducted an operational assessment to analyze the cost of various types of errors? Not just the number of times monthly or annually a particular error occurs, but what is the actual cost of that type of fulfillment error?  The types of errors I’m referring to are mis-picks, customers' lost packages by the carrier, packages damaged in transit, etc.  The best place to obviously capture these are in the call center and fulfillment center.  

1. Labor
2. Facilities
3. Workflow and procedures
4. Systems

Labor is incontestably the most expensive area on your profit and loss statement relating to fulfillment, so it’s important to get the most for your payroll dollar. Labor, in turn, consists of four areas, the first two of which can be easily quantified; the others are more difficult to quantify but should not be ignored.

We recently have been working with a few warehouse clients that are involved in moving to a new warehouse facility. Along the way, it became apparent that the planning for the move required a lot more time and effort than originally thought. What seems like a simple concept can become a daunting task in a hurry.

When we are asked to perform a warehouse operations assessment for a client, the first thing I like to do is take a quick walk around the warehouse. It may surprise you, but it is usually possible to determine what we will see during the detailed assessment in the first minute or two of the walk around. The initial impression gained in the warehouse is a pretty good indicator of how efficient and productive the operation will be.

I usually put together a few observations occurring in that first few minutes that can be a good indication of what to expect when the detailed operations assessment is underway.

These are some actual situations I have encountered recently during the first quick walk around: