10 Distribution Center Best Practices to Implement
Establishing best practices in your distribution center will help you to eliminate bottlenecks and streamline operations while effectively reducing time and cutting costs. Following is a list of the top 10 best practices our team recommends for distribution centers.
1. Implement ERP to facilitate multi-departmental needs and streamline processes.
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Among the chief capabilities of an Enterprise Resource Planning (ERP) system are its ability to
- Provide full inventory management so that your organization has an accurate view of the status, value, and location of your material goods
- Facilitate a full spectrum of accounting needs
- Handle complex order management including sales quotes, POS orders, prepaid orders, and web orders
- Allow for management of complex shipping and fulfillment processes: through configurable workflows, distribution centers create approvals, automate shipping processes, and eliminate duplicate manual entry to reduce input error
2. Streamline picking processes to maximize efficiency.
- Instead of picking based on order arrival, streamline the picking process in your distribution center by mapping routes based on movement and efficiency. Reducing the overall travel distance and time increases productivity.
- This task can be accomplished through complex systems or by analyzing your facility map, highlighting product locations, and mapping employees’ picking routes prior to picking commencement.
3. Minimize the number of manual steps necessary.
- This may seem self-explanatory, but it can be a systematic problem in distribution centers. Instead of utilizing multi-tote methods for product picking, consider picking directly to the shipping carton.
- Develop automated lines that minimize employee touch points. This can be accomplished through robotic assistance or through physical space improvements including overhead conveyer systems or optimized forklift lanes.
4. Avoid the headache many distribution centers face: lost or misplaced inventory.
- Implement cycle counting operations at your distribution center. To be successful when implementing cycle counting processes, a cultural change revolving around proper inventory management must take place.
- Perform cycle counting every day of operation before picking and order processing occurs.
- Strong cycle counting processes can have a direct effect on organizational efficiency and drastically reduce overhead costs.
- Throughout the cycle counting process, make sure to collect and store all of your data to analyze for trends that can be remedied.
5. Just like outgoing product, streamline the replenishment process in your distribution center.
- We will be short and sweet here, but just like outgoing product, utilizing information system and structured movement processes to replenish warehouse stock can represent considerable time and cost savings.
6. Emphasize employee training and work as a cross-functional team.
- Simply training an employee on machinery is a trap that many distribution centers fall into. Go beyond base level training by highlighting how the organization works as a whole.
- Have each department’s management discuss organizational goals, metrics that are being gathered to determine individual performance, and discuss team efficiency goals.
- The key is to have each employee feel responsible for their component of the complex processes in play at a distribution center. An added side benefit is that employees will isolate ways that they can become increasingly efficient in their daily tasks, which results in increased organizational productivity.
7. Destroy distribution center darkness!
Distribution centers are renowned for having limited or patchy lighting. The effect of proper lighting is twofold.
- Replenishment and picking efficiency suffer when employees are slowed down by low light scenarios. Situations such as inaccurately picked inventory and incorrect product placement can incur large inventory costs and can also decrease the overall replenishment and picking rate.
- Low light conditions in distribution centers can contribute to safety issues. To prevent staffing issues, shipping halts, and potential lawsuits, it is imperative that correct lighting geometry is implemented.
8. Do not skimp on scanning technology.
- Record the movement of products with precision by utilizing rapid bar code scanning technology or even RFID technology.
- Knowing where products are is great, but equally important is knowing where each product has been. Having historical information can enable managers to alter product locations based on order consistency and picking difficulty.
9. Consider cross docking.
- With cross docking, certain products from your suppliers or manufacturers are received and then sent out quickly to avoid the need for storage.
- To minimize employee and facility costs, reducing handling and storage time is a must. If the products being stored at your distribution center are perishable or time sensitive, cross docking can provide immense speed increases and cost reduction.
10. For distribution centers, data is king!
- To truly realize distribution center efficiency, having accurate data at your fingertips is essential.
- As mentioned before, an Enterprise Resource Planning system allows for full distribution center control. Since all data is stored within the ERP, these types of systems are able to provide detailed reports on everything from financial information to specific inventory reporting.
- The direction technology is headed is wireless, and having the ability to access all necessary data through dashboards on a wireless device is where a system such as Trek Cloud ERP shines. Learn more about Trek Cloud ERP
Distribution centers live and die by their need for organizational efficiency and their access to relevant data. Implementing physical infrastructure to reduce the amount of movements necessary in the replenishment and picking process is very important. In addition to setting up the distribution centers’ architecture efficiently, it is imperative that employees are on board with the organization’s and team’s goals and that they are fully aware of what their tasks entail so that they can optimize their own productivity. But the piece that holds all of these improvements together is having a system that facilitates the streamlining of your processes. For distribution centers, a cloud ERP system fits the bill and provides accurate, real time data so that managers can make informed decisions, improve processes, and increase ROI.