Errors And Expense

Warehouse and Operations as a Career

It’s been another great week hasn’t it! I’m Marty and I’d like to thank you for joining us again here at Warehouse and Operations as a Career. This week let’s spend a few minutes on controlling expenses. I had a conversation last week with a V.P. of Op’s about a facility that had had over 1000 short on truck cases the previous week. That’s a huge error ratio and creates a very real expense to the company, not to mention the disservice to their accounts. I tell you what, we’ll get into all that in a moment, but let’s start with how we handle wasted expense when it’s our own. I’m certain we’ve all, probably on a daily basis, talked or commented to our kids about leaving the lights on in an empty room, or leaving the A/C running way to cool when no one’s home, or how about running the bath for like 15 minutes before their ready to get in it. All that can be a drain, an actual waste of our hard earned money. By managing those expenses or that waste we’re able to have more and do more right? The same holds true in our work lives, our companies can have more, maybe newer equipment or supplies and share or afford more, those monies we as associates don’t help manage could end up in better wages or incentives for our positions!

About two weeks ago I was speaking with a building maintenance supervisor, I’ve know him for about 15 years, hadn’t seen him for like 4 years now though, he’s now working in a new industry. I’d known him from the distribution arena and I’d asked him how he was liking the new job. One of the things that he mentioned was how he didn’t miss all the pallet jacks and forklift maintenance he use to deal with. His biggest complaint was always the shrink wrap and cardboard being ran over by the equipment and all the load wheels he’d have to replace and the cost it incurred for his department each month! We can all realize those wheels aren’t cheap, those bearings we burn up each month not only cost a pretty penny but think how much time our equipment’s down while there being repaired. Oh and speaking of cardboard and shrink wrap, these days a lot of companies recycle them, I’m sure we could all pitch in and save a few more bucks by saving as much as we can and getting it to the proper staging area! One of my old pet peeves was the waste of things like tape and rolls of labels. How many partially used rolls of strapping tape or rolls of labels that get changed out too early because we didn’t want to run out during a batch so we just put in a fresh roll! Our one roll doesn’t hurt anything, but multiply that by 60 of us times 6 days and we could have saved the cost of a whole box. It’s hard, I mean we have a task to perform, thinking about expenses and saving or not wasting that money. But I’m sure we can all agree it’d be a win win if we could do a better job at it!

So shorts or not on trucks. The facility I spoke to earlier typically ships around 400k cases a week, with over a thousand shorts or not on trucks that’d be an error ratio of 1 in 400! That’s 1 case out of every 400 didn’t get delivered to the customer. Think about that cost, there’s an expense to get it ordered again, send a selector out to get it again, get it loaded and then driven back out to the account, times 1000 times. I know that’s an exaggeration but wow. A typical error ratio I work with is at a minimum 1 in 3000 and I know accounts that are hitting 1 in 20,000. Those numbers include misships as well. Short on truck and misships are a huge expense, and we can’t forget the impact to the customer. If we take the family out for a nice dinner and the kids want spaghetti but a selector mispulled stewed okra in the can for spaghetti, well that’s not going to be a good thing.

Ok, so how can those expenses happen, what causes a short on truck and how can we prevent it. And a mispull, how do we grab the wrong thing. If you can answer those questions and eliminate them from the industry you can be a wealthy individual, every corporation would pay you just short of a king’s ransom. Take shorts, we’re selecting our batch and we pull up to an empty slot. The inventory may be off so the machines sold a case that we just don’t have. If we don’t turn that label in as a empty where it can be removed from the invoice, bam, it becomes a short on truck. Its quantity is still on the invoice yet the driver does not have it on his trailer and the customer can’t sell it! Another scenario could be our forklift driver hasn’t yet replenished the empty slot, so when we get there it’s empty. Again, if we’re busy and fail to get that label turned in, bam again, it’s a short! So much has to happen when we’re dealing with an exception, or something happens to take us out of our normal pace or process and it’s then hard to get it done. But we need too, I think we’ll all agree there. And of course I’m sure theirs that one peer that, it may even be one of us, that just isn’t caring at that particular moment and thinks, heck I’m not going to mess with this, and bam bam, it becomes a short on truck again! Human nature takes over, we need to fight against it, and we’ll be better employees if we do, but I’m sure it happens.

And a misship, I’ve always struggled with a misship. Our label or pick ticket will give us the description, the item or sku number or supc number, the pack quantity, color or size etc. We’ll be directed to a slot and we have the opportunity to verify all that, yet the misship is a real thing, happens every shift, and cost our companies and customers. They happen, I’ve made more than my share over the years. Again, if we could solve this problem we wouldn’t have to work for a living anymore.

Errors are costly in every profession and industry. I guess we as associates can help by realizing those cost and helping where we can, maybe paying a little more attention when we can. Again, it’s hard. We have production numbers to hit, we’re making our money. If we can improve with these two areas I’m certain we could see some more incentives. Maybe that’s an idea you could bring to your management team, if you could present them with a way to measure our improvements they very well may just share those savings through an incentive or bonus program. When I was selecting if our names weren’t on the short or misship sheet we’d get a $5 petty cash slip each night. Back then that was quite an incentive, I’d come in every night, check that sheet and go count inventory, talk to the driver and loader, I was always pretty persistent that I hadn’t errored! Sometimes I found it or proved my innocence and sometimes I just had to accept it. There’s no perfect system or WMS or warehouse maintenance system that can eliminate errors, yet anyway, but I’m sure we’ll all agree we could probably try a little harder!

I almost forgot about damages, that’s another expense we can help attack. I’m sure we all see that staging area where we place damages at the end of the shift. Again, it’s just that we’re working, maybe we take a corner too tight and graze the upright or stacking, I was probably the world’s worst stacker, anyway, if we’ve stacked a bit loose and have a tower stack fall over and damage a couple of cases, bam again, expense we maybe could have avoided. And let’s not get into the cost of rack or building damages. Those overhead doors aren’t cheap either!

I was thinking a few minutes ago, when we were talking about running over shrink wrap and cardboard. I wanted to point out the safety aspect of it. If you’ve never had a set of bearings lock up on you when you’re in motion, be thankful. I hate to admit it but once the load wheels were so wrapped up in plastic it locked up and nearly threw me off my machine, and I’ve seen the same thing happen to a forklift a couple of times! Not a safe situation at all! And things like that are incidents too, could even be near misses and could count as a Safety incident. We may expose ourselves to retraining or be hit with a couple of Safety points as well. I know we will if there’s ever any rack damage or one of those overhead doors are involved.

A bit of preaching today, but I’m sure we all understand the opportunities. If you have any ideals or could share what your facility does to combat shorts and errors or damages please email us, [e-mail] so we can share them with the group. Talk about getting noticed by your management team, if you can help reduce those types of expenses you’ll get more than a handshake! And please join in with our discussions on Facebook and Twitter, you can find us @whseandops on both, and we’d love it if you could like our Warehouse Equipment Operators Group on facebook as well.

We hope you stop by again next week, and until them let’s all gather up that cardboard and shrink wrap, maybe pick up those pieces of pallets on the floor and be Safe on our Equipment!