Part 2: cutting costs with better inventory management

Improved processes: inbound, putaway and replenishment inbound logistics

Improving your inbound processes

The best place to begin an overhaul of your inbound logistics processes is by setting up collaboration with your procurement and product planning people. You need to fully understand the plans they have for utilising your warehouse space and logistics resources in the near future in order to adapt to those needs. You will need a great degree of visibility as to the timing and flow volume you can expect for inbound material. You should also get them to include terms relevant to the warehousing and logistics department in the terms of sale.

You’ll want to have a say in:

  • ASNs/Advanced Shipping Notices
  • The delivery requirements of your carriers, especially shipment delivery windows
  • The ejection and acceptance criteria for orders
  • Product identification processes, both automated and manual

Getting the type and number of the goods and materials you receive correct is the basis of all good inventory management. If these numbers are recorded wrongly, or just not in a timely manner, you’ll spend all your time correcting errors rather than managing your processes and training your staff. If at all practical, try and use automated inbound ID processes for the sake of speed and accuracy.

Improving your putaway and replenishment processes

Your putaway and replenishment should be scan verified and system directed where possible. You should review your system decision process regularly, and be sure that your replenishment people are guided to the most effective actions by it. If your system decision rules are inefficient, it’s worse than having no system in place at all.

Your replenishment and putaway processes should both be able to contribute to the accuracy of your inventory tracking at a location level. While an operator is at a particular location, your system should prompt them to perform a cycle count. Any problem can be fixed quickly, because you have somebody there already. Your people should also perform visual inspections of your goods on site to confirm that they are undamaged and there are no other problems.

You should be getting replenishment frequency reports regularly. It will highlight the pick locations that need to be replenished most often, and allows you to choose pick lot sizes that are appropriate to the usage.

Next week, we’ll look at part 3 of improved processes: picking, returns and verification


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