Warehousing And Inventory Management

For many companies, the warehouse is the most neglected department . As a company grows, there is a tendency to overlook the problems in warehouse and inventory management until such time that it starts to have a significant effect on operations. However, managers should be aware that it is in this area where there is a large potential for upgrading.

Here are the top warning signs that indicate a pressing need for radical changes with your warehouse and inventory management:

Missing inventory. It is apparent that substantial theft is occurring. In serious cases, this may be of sufficient severity to cause massive losses. Here, you should study the right internal control procedures.

Frequent inadequate inventory. For every item that cannot be served, the losses are often more than the profit on that item. The customer may no longer return, so future sales are lost. It may also be that the lacking item is a necessary component to make the finished product.

Overstocks. The opposite of being short is also as bad. Capital is tied up in too much stock. There is also the high probability of deterioration of the inventory. An increase in carrying costs like additional insurance and maintenance is also incurred.

Damaged or expired inventory. Poor handling and piling is the usual cause of this. But there are other possibilities, like inadequate checking when receiving deliveries. It may be that the items were already damaged or expired upon delivery. In the case of expired inventory, there should be better tracking of expiration dates. Lately, many warehouses have suffered damages due to flooding like Typhoon Ondoy. Although a rare event, this prompted many companies to have a higher placement for their inventory so that it would not be reached by flood waters in case of another super typhoon.

Slow and wrong serving of items. It may be that it takes too long to locate an item, or the layout of the warehouse causes too much travelling time, as when frequently needed items are located at the far end of the warehouse. Two other causes are inadequate training and labelling of containers.

Too much employee turnover. If you are experiencing abnormally high employee resignations, it may be due to poor working conditions. The warehouse may have inadequate ventilation or the temperature there is too hot. Another possibility is that it has a hazardous environment that endangers their health. Check accident rates and get feedback from personnel to learn the root cause of the excessive employee turnover and how to best address the problem.

To know more about this topic, BusinessCoach, Inc., a leading business seminar provider, conducts a seminar entitled, “Effective Warehouse and Inventory Management.” Contact (02) 727-5628, (02) 727-8860, (0915) 205-0133 or visit www.businesscoachphil.com for details.

Click here to view details of the seminar: Effective Warehouse and Inventory Management »

*Originally published by the Manila Bulletin. C-4, Sunday, April 28, 2013. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.