Many years ago, when I started a position as Operations Manager for a warehouse, I would ask myself questions, such as:
- Why is this material in the incorrect storage bin?
- Why are we picking materials this way?
- How are we so far behind in closing transactions?
- How are we losing so many materials?
- How are we physically out of storage bins when SAP shows many available?
The simple answer was our business rules did not reflect our business behaviors. We outgrew our configuration and as a result, our master data was working against us as opposed to automating processes. This was a snowball that started off rolling slowly and as our business continued to evolve, so did our inefficiencies and manual intervention and the snowball sped up rolling uncontrollably.
Our business expanded its vertical in the window treatment and blinds sector and began procuring 8’ and 12’ commercial blinds opposed to 4’ mini blinds. All our storage bins where 4’ wide and this growing pain created a daily issue in the warehouse where the 12’ and 8’ blinds were being systematically driven to our standard 4’ storage bins. The put away associates were confirming the quantity to the bin although it was physically impossible and would place/hide the blinds anywhere they could find space. If the outbound associates were able to locate the blinds (Most times through word of mouth outside the system), they would place these larger blinds onto or in the middle of the pallet, damaging the blinds or other materials.
This not only resulted in lost and damaged inventory, and delayed orders, but the bigger issue was we were physically out of available bins when SAP showed we had plenty. We put ourselves in a position where we could not trust the data in our system. We became overcapacity and gridlocked due to poor planning and lack of knowledge of SAP’s capabilities.
Adapting to SAP Best Practices
Change is necessary for growth and just because something worked in the past or had always been done a certain way, does not mean it’s the best solution for the current state. For the horror story above, we quickly needed education and had to change our processes, strategy, and master data to have SAP once again work for us and automate our warehouse processes.
Through our root cause analysis, it was determined the following changes were needed:
- Different sizes and larger storage bins
- Ability to have the system determine a different bin based on the quantity and size of the material
- Control of the material flow for specific or larger materials and the ability to allocate them to the correct bin size
- A way to segregate specific materials for picking
This was all accomplished through standard SAP best practices utilizing functionality such as palletization data, picking areas, material and storage bin capacities, etc. These changes not only automated the processes, put trust back into SAP, but significantly reduced labor hours, and increased throughput by 32% in the first year.
If you’re not achieving desired results in your SAP investment, start by educating users on SAP best practices, aligning your business behaviors to your business rules, and optimizing your supply chain.
In an effort to reduce spending and increase service we need to know what is being bought, how it is being bought and what changes can be made in order to reduce cost, increase on-time delivery and project future spending. By looking and investigating this we will identify ways of achieving these objectives and increasing operational efficiency in the supply chain. Read this white paper, Reduce Purchasing Spend 10-15% While Maintaining a High Material Availability, that will touch on similar issues discussed in this story.
