Like most business elements, fulfillment centers need to be understood holistically. However, if you’re new to managing fulfillment centers, it can be hard to breathe, step back, and see the whole picture. One helpful technique is to break the business down into its component areas and focus your attention on finding answers to the key questions. Here are several areas to examine especially carefully if you’re just starting out in taking over the operations of a fulfillment center. The more quickly you understand how these six areas function in your fulfillment center, the faster you’ll have your feet under you.
We’ve included some important questions for each area that you can ask to get the wheels turning.
Safety and Security
Safe and secure operations are among the most basic needs of any business. Fulfillment centers can pose extra challenges in this area, so it’s important to be ready to address these on Day One.
- How many accidents has your fulfillment center had in the last year? How serious were they?
- Are there areas or positions more prone to accidents than others?
- Do well-defined safety policies and procedures exist? Can all employees access them easily?
- Are your forklift operators certified to operate their equipment?
- Do your employees seem consciously aware of safety issues as they work?
- Is the warehouse generally clean and tidy? Are loose cables secured with appropriate fasteners?
Security is also a concern that shouldn’t be overlooked. Distribution center theft is a serious and growing problem, and you should know how you plan to tackle it should it appear.
- Do you have adequate security camera coverage on all important areas of the warehouse?
- Does your WMS show “digital footprints” of employee inventory adjustments?
- Is there an anonymous tip line to report employee theft? If an employee tipped you off that their coworker was committing theft, how would you investigate it, and how would you confront the employee?
- How is your corporate data protected? Are IoT devices in your warehouse as well-protected as the servers are?
Inbound and Outbound Freight
Organizing the arrival and departure of freight is the essence of managing a fulfillment center. If freight isn’t entering and leaving efficiently, something could be seriously wrong.
- Are your receiving processes tight and efficient? Does inventory get put away quickly and accurately?
- How much extra time does paperwork (bills of lading, etc.) add to drivers’ arrival and departure times? Is there a way to streamline this, possibly using your WMS?
- Do drivers typically have to wait at the dock? Are there steps you can take to make sure your team is ready to hit the ground running?
- Does your team have sufficient supplies of common shipping tools and materials such asshipping wrapand air pillows? Are they easily accessible?
Slotting and Organization
Proper inventory organization and slotting are among the fastest and most effective ways to boost fulfillment center performance. It can, however, be an ongoing process, so it’s important to get started as quickly as possible.
- Are you using a slotting method such as the ABC System to ensure your most frequently picked inventory is easy to access? Do your slotting systems take the Pareto principle into account?
- Does your warehouse have significant vertical bin organization, as many large fulfillment centers do? If so, are the least-picked SKUs in the highest bins, to minimize time spent on accessing them?
- How often do you refresh your slotting? Does your inventory change enough that you should be doing it more often? How much of your inventory needs to be re-slotted when you do?
- Do you have seasonal items that need frequent re-slotting due to demand fluctuations?
Picking and Packing
Most likely, these are areas where you’ll focus many of your optimization efforts. For a larger fulfillment center that ships hundreds or thousands of orders a day, every second is precious. Reducing pick and pack times is a highly effective way to increase productivity.
- When errors occur, at what point are they being introduced? Are pickers picking incorrectly, or are packers packing incorrectly?
- Is one half of the pick-and-pack process operating significantly faster than the other? Can you re-allocate labor to make sure input and output are balanced?
- Is the pace of picking and packing one that’s safe and healthy for your employees?
Data Analytics and KPIs
Your data will tell you the story of how your fulfillment center is operating, so it’s your job to listen closely. Every metric has a role to play in explaining why and how your warehouse is performing the way it is.
- Which common warehouse KPIs are you using? Are there any that you’re not currently monitoring but should be?
- If there are data points that are hard to track down, why are you having difficulty getting data on them? Does your organization lack the capacity, or is it just not being given the proper attention?
- Are you aligned with your superiors on which KPIs to focus on improving?
- What did last year’s data look like? What resources can you leverage to improve data collection and actionability?
- Are you tracking return rate as a KPI? Are you also tracking the reasons for customers returning items?
Communications and Coordination
Finally, a connected fulfillment center is an efficient one. Connection and communication are essential at every level for fulfilling orders quickly and accurately.
- Is interdepartmental communication where it needs to be? Do warehouse employees feel like they are being listened to when they communicate needs to other departments and do other departments feel the same?
- Are standards and goals being clearly articulated for all employees?
- Does an open channel exist for employees to express problems and concerns in a supportive atmosphere?
If you’re overwhelmed right now, don’t worry! Managing a fulfillment center can certainly be a handful. However, with the right tools and the right focus, you’ll be able to step up faster than you’d imagine. Just remember that the insights that you gain depend on the questions that you ask.