There is a common philosophy that states, “The definition of insanity is repeatedly doing the same procedure, the same way, expecting different results”. Are there re-occurring problems in your stores and warehouses? Do you have a way for your employees to record these errors for analysis? For example, is there an easy way to record damaged material or stock inventory that for some reason cannot be used? This material includes:
- Damaged material found in the warehouse
- Unintentional scrap created when a mistake was made in filling an order
- “Drops” or quantities of a product that are too small to be sold or used
In many organizations, damaged or unusable inventory is hidden. Maybe it is thrown in a scrap pile or discarded. But the best run organizations encourage or better yet insist that employees record these “unquality events”. Recorded events are analyzed to determine if polices or procedures can be changed to prevent the same mistakes from occurring again in the future. For example:
Damaged material found in the warehouse:
- Was the material damaged because it was not stored in its stocking location?
- Was the material damaged in its designated stocking location? Is there a better way to store the product?
- Was the material damaged when it was received from the supplier? Do we need to ask the vendor to improve packaging or use alternative shipping methods?
- Is a particular employee careless in the way he handles material?
Unintentional scrap created when a mistake was made in filling an order:
- Are the proper tools not available for filling an order? For example, it is difficult to measure a long length of pipe with a short ruler just as it is nearly impossible to create a precise, clean cut with a dull saw.
- Is an employee not paying proper attention to what he or she is doing?
- Are there environmental problems? For example are products melting because they are not stored in a cool location? Should lighting be improved? Is there adequate space to properly deal with the amount of material that you have to keep in inventory?
“Drops” or leftover quantities of a product that are too small to be sold or used
- Should a customer be forced to purchase a whole unit so no drops are created?
- Should the price the customer pays include the cost of any leftover “drops” so that this unusable material has been paid for?
- Can a more appropriate quantity of the product be ordered from the supplier?
Correcting material handling problems allow you to reduce your operating costs and increase profitability. In these challenging economic times you’ve got to take advantage of every opportunity to improve your operations!