Memo from the Warehouse Manager
This is a conversation between the Warehouse Manager and the Boss.
Memo
To: The Boss
From: The Warehouse Manager
Date: Today
Re: Whipping the Warehouse into Shape
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Message
You’ve asked me to make sure every order is accurate, that my warehouse is organized and my guys are efficient when pulling orders. You’ve asked that my cycle counts be done daily because our inventory is always wrong.
Accounting has an accounting system, Sales has a customer relationship management system and my team has pen and paper!
We truly want to do the best job possible for you, but we need the tools to do our job to the best of our ability. Please help us to help you!
Memo
To: The Warehouse Manager
From: The Boss
Date: Today
Re: Whipping the Warehouse into Shape
______________________________________________________________________________________
Message
Your request makes sense. The main question on my mind is how will a warehouse management system impact the bottom-line? What financial impact will this type of system have on our business?
Memo
To: The Boss
From: The Warehouse Manager
Date: Today
Re: Whipping the Warehouse into Shape
________________________________________________________________________________________
Message
We will become so much more accurate and efficient. Here are some examples:
Example 1: Right now orders are printed and given to our guys to pick. If someone accidentally picks the wrong item, there is no validation process. With a barcode system the scanner would tell my guy immediately if he picked the wrong item.
Example 2: After we pick an order, the paperwork goes to Sally to be inputted into the system. Whenever she gets backed up (or is out of the office) those completed orders just sit on her desk. Because of this our inventory counts in the system are behind. This delays purchasing from reordering and leads to out of stocks.
Example 3: Our invoices get delayed for a similar reason to the inventory count. Once an order ships, the paperwork to create the invoice goes to accounting. If they get behind, a customer may not receive their invoice for up to a week after the product ships. If we could get the invoice out automatically at the time the product ships, then we could get paid sooner.
There really are tons of examples of how a warehouse management system would help us. If you would like a more detailed explanation we should probably discuss in person.
Memo
To: The Warehouse Manager
From: The Boss
Date: Today
Re: Whipping the Warehouse into Shape
____________________________________________________________________________________
Message
Your examples are very clear. I guess I was just not fully aware that was how we were doing it. As you describe it, it does seem like an old inefficient method and certainly one that will not allow us to grow.
How do we quantify the financial impact of such a system?
Memo
To: The Boss
From: The Warehouse Manager
Date: Today
Re: Whipping the Warehouse into Shape
__________________________________________________________________________________
Message
The financial impact is significant. The last company where I worked, we saw a 20 - 25% reduction in the cost to run our warehouse. We cut the number of people on the warehouse floor and in data entry. My understanding is that is a typical number.
In our case, since we are growing, we could achieve our growth targets without having to add staff in the warehouse. Not only would this save us on compensation, but you also mentioned that our workers comp rates were going up and that we were running out of parking spaces in the lot.
If I remember correctly, my last boss told me that the system ending up paying for itself after about 7 months. He was expecting it to take much longer than that.
Memo
To: The Warehouse Manager
From: The Boss
Date: Today
Re: Whipping the Warehouse into Shape
______________________________________________________________________________________
Message
I like to hear that the system pays for itself in such a short period of time. I also would have expected it to take much longer.
What about your team and their willingness or desire to learn a new system? I am concerned that we buy a new system and nobody uses it.
Memo
To: The Boss
From: The Warehouse Manager
Date: Today
Re: Whipping the Warehouse into Shape
___________________________________________________________________________________
Message
Most of the guys here have used a system in the past. They all prefer a system because it is a lot easier to use and makes them more accurate in their work. When items get returned, or back ordered, it is a real pain for all of us.
I understand your concern, but they would all be excited to have a proper system and have assured me that they will embrace it and make it worth your while.