Reference: Euroterminal LLC is a multimodal logistics center located in close proximity to a major transport hub — the port of Odessa. Euroterminal serves a wide range of cargoes and has significant storage facilities, including a customs licensed warehouse and a depot for storing empty containers.
Why do warehouses overflow?
“Overflow, or stuffing of a warehouse, when there is simply nowhere to put a new consignment of goods, is a common problem,” says Pavel Lisitsin. As a rule, it is based on a whole complex of organizational, technologicalб and human factors that are not always obvious to the owner.
Among them, as the president of Euroterminal lists, there is a simple shortage of equipment and staff, low labor productivity (due to the slow rhythm of staff work due to their lack of interest in processes), and the ineffectiveness of the premises of the warehouse itself.
According to Pavel Lisitsin, some issues can be resolved by additional investments — by purchasing new equipment, raising employees’ salaries, and hiring additional personnel. Whereas forced downtime and interference in work, large idle runs of loading equipment and employees, long searches for goods and other similar moments require effective measures to organize and optimize the work flow.
Analysis and planning are the basis for success
To eliminate the factors of overflowing of a warehouse, first of all, you need to recognize the “enemy”. To analyze the bottlenecks in the work of the warehouse, Pavel Lisitsin recommends a thorough analysis of work processes and an audit of business processes using the maximum number of tools.
Having found out what the main problems are, you can analyze the cause-and-effect relationships between them, namely, what causes the largest consequences. Pavel Lisitsin advises to eliminate them first.
Depending on the overflowing reasons, as Pavel Lisitsin says, the warehouse owner will probably have to take some of the following steps:
- Modernize warehouse premises: allocate functional areas for different operations with goods so that employees don’t interfere with each other in the process of work, optimize internal warehouse premises and employee workplaces for specific tasks (for example, expand aisles for the convenience of equipment). To organize the most dense storage, you may need additional equipment — multi-level warehouse racks, conveyors, high-performance loaders.
- Optimize work processes. There are two areas here: reception/placement of goods in the warehouse and intra-warehouse movements, selection of goods, packaging, and shipment. At the first stage, you solve problems with document circulation, registration of goods, plus, systems for planning the placement of goods and their categorization are introduced. At the second stage, focus on meeting delivery and handling deadlines, employee performance, and productivity. “Hardware control will be effective,” notes Pavel Lisitsin.
- Improve the quality of information about goods, the availability of inventory balances, their placement, make sure that this information is as accessible to employees as possible and up-to-date. Again, modern systems of warehouse accounting and control of inventory balances will come to the rescue.
- Optimize the available warehouse stocks: calculate the required volumes of goods, revise the assortment and suppliers to find nearby manufacturers for quick deliveries of seasonal goods, calculate the volume of purchases in accordance with the turnover.
In addition to the above said, Pavel Lisitsin recommends mechanizing, automating and digitalizing all possible processes and works in the warehouse. According to Pavel Lisitsin, it is automation that opens up new opportunities for the most efficient management and control of the warehouse and help to avoid both overflow and shortage of warehouse stocks.