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Distribution system design is a key concern when it comes to product loss. The main reason is the financial loss and critical cost concerns that come with damaged products. Lean manufacturing, or lean warehouse, is the systematic reduction of waste within a process. Managing the waste generated by handling product is one way companies can “Stay Lean”. This is a tangible area in which capital investment can yield great returns.
As an independent integrator, we work with customers from a wide range of industries. We also cover a number of functions, including order fulfillment, manufacturing and packing, shipping and pallet handling. Many customers are able to keep a consistent rate of product loss.
One ecommerce client noted that the product loss rate was kept at one percent. If a facility ships out $10,000,000 worth of product every year, one percent may not seem significant, but that’s $100,000 a year left on the table! Not all of this is recoverable due to operator-related issues or accidents. However, if you can invest a small amount of capital and consistently reduce product losses by 50%, it could result in a $50,000 profit.
Here are some tips on how to reduce and avoid product loss.
1. Operator training and involvement
Inconsistent training is not unusual for both new and veteran employees. If your employee leaves, a dollar invested in training will always be a risk, but it shows that you are serious about their position and, more importantly, that you care.
It is not necessary to make training complicated or long. It should be easy to understand, accessible, and relevant for a particular position. A simple onboarding training program or periodic operational reviews can be enough to improve productivity and reduce errors.
It is important that the management of more complex machines consider a formal training program. Working together with a system integrator to provide proper training is simple and efficient. It is possible to train your team by working with trained trainers who have experience on the installed and integrated system.
If hiring a full-time trainer is out of reach, you could consider using a consulting firm or inviting the machine manufacturer to conduct training sessions.
Visual reminders are a simple but effective way to make sure that employees remember their training. Visual reminders can be a great way to remind employees of their training. This helps reinforce items every day and keeps them thinking about the procedure. Visual reminders can include easy to read or see instructions, a list of common incidents or damage and what to do when an issue occurs or is found. Fast food restaurants are a good example of visual reminders. They show the assembly of certain meals, or remind you to add plastic cutlery and napkins. For example, visual reminders can be seen at fast food restaurants where images walk through the process of assembling certain meals or reminding customers to add napkins, plastic cutlery, etc.
2. Process Improvement:
CPI is another area related to quality. CPI is a subject that has its own programs. CPI programs must be designed for long-term success, based on data that confirms effectiveness and prioritizes priorities.
You can begin small. Create a simple, repeatable program with the goal of finishing. It is not necessary to perfect the process, but to complete it. You can always go back and make improvements.
Asking yourself the following questions about your warehouse distribution system is a great way to start thinking about continuous improvement.
- Is it possible that an employee touches the product more than necessary?
- How many employees are required to track the product manually?
- Do you have a product that has been sitting on a cart for a long time without being labeled?
- Is the product properly labeled?
- Is the product susceptible to being crushed, improperly stacked or struck during storage or transport?
These questions, and others, can help you identify when process improvement is needed to reduce issues with inaccuracy or damage. “Kaizen Supply Chain – 8 Focus Areas to Achieve and Maintain High Quality” dives deeper into the target opportunities, and creates the right conditions for a CPI method to flourish.
3. Correct Material Handling Equipment
What equipment is best for your application and how do you choose it? What criteria can you use to decide whether a particular process should be automated or not? This is a complex question that, more often than not, gets replaced with “which solution costs the least?”
In this article I will not cover all the aspects of choosing the correct equipment. However, it is important to select the best material handling system for a successful system. The importance of choosing the right material handling solution is to ensure that your product can be moved efficiently and safely. You should also consider the total cost of ownership of a system, which includes not only the upfront costs but also maintenance costs, installation fees, future modifications and other costs.
Line shaft conveyors are known as one of the most cost-effective types of conveyors in terms of initial costs. However, it is easy to overlook that the costs of the conveyors are far higher in terms of maintenance, installation and operator hours.
If you are not confident in material handling, I recommend that you contact an engineering company willing to take a closer look at your data and application.
Anyone can give you a quote when it comes to material handling integrators. You should not only choose the supplier who offers the lowest price, but also a partner to work with on the project. A partner will be able to understand your business processes and create a system which can be adapted or scaled down in order to accommodate changes or growth. When it comes to selecting the right system, and choosing the right partner, flexibility and forward-thinking are essential.
4. Reducing manual touch points
Although reducing manual touches could be viewed as a subtopic of CPI or choosing the right material handling solution for your business, a focus on “manual touches” is important because it addresses specifically product loss.
There is always a risk of damage to a product when someone touches it. It can be caused by a drop or improper storage or placement. Also, there is the risk that product will be misplaced or incorrectly packaged. It can be due to a misreading of an label or not knowing where the carton should go. Manual handling is also inefficient.
Begin by looking at the data. The pain doesn’t necessarily go away by adding a new piece of technology. You can improve efficiency by re-evaluating the process and identifying trouble spots. It can confirm the need for specific material handling solutions or reveal an opportunity to use a different approach.
After a solution for material handling is identified, it’s important to train, remind and supervise the people. Also, people do not always work the same amount of time. They need breaks and they do not work 24 hours a day. A company can reduce its basic labor costs by converting to automated material handling equipment in Melbourne. The capital saved from this transition can be used to pay for the machines or invest in skilled workers for other business areas. You also reduce product loss by removing the human factor from material handling.
5. Making a Decision to Move On
To reduce product loss, the final step is to create a plan. This article and other educational materials, as well as engineering and system integration firms, provide a wealth of information on material handling and loss prevention. It is time to act. Sit down and create a plan. Reading about it will not help you reduce product loss.
Reduce Product Loss, Improve ROI
These methods can often lead to cost-savings opportunities, which not only benefit an organization, but also the employees. Our process is designed for identifying opportunities to optimize your warehouse, factory or distribution center. If you are ready to find a solution, contact one of our experts in solution consulting today.
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