Having great quality in your warehouse operations makes everything run more smoothly. Records are correct, orders are in full, shorts and damages are minimal… it’s a dream.
On the other hand, having poor quality means that your team is always fixing problems, searching for inventory, and firefighting daily. Nobody wants that. It’s stressful and creates unhappy employees and unhappy customers.
So how do you get to having great quality? Here are my top tips for getting to a better place.
What is quality? Quality can be thought of as the degree to which the actual work produces the intended result. This can take many forms. In manufacturing it can be measured in the amount of scrap or rework required. In software engineering it can be measured in bugs during testing. In the warehouse, quality is often measured in how virtual inventory records match the physical state of the inventory.
Having best-of-class quality performance means having best-of-class quality operations. It’s not enough to tell employees to “pay more attention” if the operation, incentives, and processes don’t support high accuracy and quality outcomes. So many of my quality tips are focused on creating the conditions for great quality. Then it’s possible to focus on the “tactical” items like which particular cycle counting process is best or scanner display sizes. But if you focus on the ‘tactical’ items without having full operational alignment to quality then you’ll run into a wall.
Also, most of these tips assume majority human handling, maybe with conveyor transport and sorting. This is still the majority of warehouse setups today, but that is changing fast. If you’re in an automated or robotic setting, managing the inputs to the system is critical, but the robots have higher quality once the items are in the system.
So let’s get to it.
1. Start Pulling
Pushing inventory through the warehouse is the number one cause of quality problems. Why is this? The prioritization of production puts tremendous stress on systems that aren’t designed to handle it. When the message is “receive to the plan at any cost” or “hit your picking goals or you’ll lose your job”, people will find a way to make it happen. It just tends to be a short-term solution that turns into a long-term problem.
But it requires management support to create pull systems through the warehouse. The supervisors and operations managers can do some of the work.
But if the production plan is someone else pushing product into the warehouse, the site will fail. There will simply be too much stress to keep stuffing inventory where it shouldn’t go or cutting corners to produce on outbound. The result will be poor inventory accuracy and tons of errors and rework on outbound processes.
To fix this, the site will need management to support implementing a pull system. And the site will need help from outside the four walls to ensure that the ultimate production signal comes from outbound orders and is buffered by capacity.
2. Push quality upstream
Many, even most, warehouse quality problems are caused by accuracy or other issues that are pushed downstream from another process.
For example, packers can’t pack orders from mispicks. In turn, pickers can’t pick inventory that wasn’t put away correctly. Stowers can’t put away inventory that wasn’t received or staged correctly. And so on.
While some quality errors happen in the moment in the process, the majority are from an existing state. Fix the incorrect state and you will fix the problems. And if you fix the problems, you fix the 10x effect.
So to improve inventory accuracy and reduce problem-solving in your warehouse, focus on driving quality from the top of the process chain. This flip side of the popular mantra “don’t pass defects downstream.”
3. Audit your processes
It’s ok to acknowledge that not every process is perfect. But it’s vital to understand which processes, and how much imperfection there is. Do this by putting an audit program into place. This is not a whole-warehouse audit, which is itself a useful exercise. This is referring more to ongoing checks of the outputs of each warehouse process.
Good process candidates for audits include receiving, putaway, picking, and loading. Do this by having an employee select a targeted amount of units for checking on a regular basis. Capture how many problems or variances are observed and how many good units there are. That’s all it takes to conduct audits.
For example, you may audit picks by having an employee select a certain number of random totes from a picking conveyor line, checking that each tote’s inventory is accurate, and recording the results. Putaway audits can be done by having an employee follow putaway tasks soon after they were completed and checking for accuracy.
Good programs will have established record keeping and analysis procedures. The data is much more helpful if you can retain and reference it over time. Another feature to keep in mind is that audits are a form of sampling. This means you can focus your efforts on high-defect-rate processes and low-defect processes audit counts can be reduced.
The real trick for audit programs is finding the headcount for tracking and sustaining the audit program. But even a pilot program will help you understand your cost of poor quality and justify the investment.
4. Measure quality and research defects
Ok, the warehouse is doing audits. Great! There is a ton of data available. What should you do with it?
Even beyond the raw error rates (which are already valuable), audits can shed light on what type of defects the operation is encountering. Categorizing these will help zero in on improvement areas. “If you can see it, you can hit it” is as true in the warehouse as it is on the range. Capture your data, research the defects, identify common types or causes, and watch the lightbulbs turn on.
5. Recognize & reward quality
Everyone focuses on rates, rates, rates, prod prod prod. How often are employees recognized for their quality? Answer: Not very often. Usually what employees hear about quality is “you made a mistake, make sure you pay attention.”
This is because quality is harder to track to an individual’s performance than productivity or efficiency. But if you can measure quality performance at an individual level (see that audit program data capture plan again!) you have a tremendous tool for supporting and recognizing the team’s quality.
6. Every location a real location
Sometimes I see warehouses operating with “virtual-only” locations. This means that someone created a system location to move inventory to where the physical inventory wasn’t present. Perhaps it was started to let other areas be cleaned up or problem-solved.
This often turns into a bigger problem. Virtual locations become dumping grounds for issues. Inventory will never be accurate because these locations are workarounds for bigger problems.
To address this, review all your location types. Empty and delete locations that aren’t physically present. Even conveyor and system locations should have some physical analog. If locations are too big to be physically meaningful (“Shipping Dock”), then break them up into smaller locations. Don’t forget to help the associates by documenting correct procedures for problem-solving.
After this, you’ll be able to have physical and systematic concordance. And this will greatly improve your accuracy.
7. Receive Accurately
Receiving is where quality starts. Errors here get passed through the entire warehouse. So examine your receiving process and conduct receiving audits. Where the process allows mistakes, implement checks or other mechanisms to ensure accuracy. An example might be to move to blind receiving and requiring a scan of barcodes instead of visual verification and confirmation of a pre-populated field.
8. Put Away Accurately
You can’t have quality picking without quality putaway. If your inventory accuracy is low then one of the first places to look should be putaway.
Conduct put audits to get an idea of how accurate your process is. Why putaway audits specifically? Cycle counts and bin defect research will help indicate possible put errors, but often can’t positively identify putaway errors and attribute them to an employee. Any touches between the put and the check will create cause for doubt of the source of the error. But since it’s important to understand how well the putaway process is going, put audits specifically are critical.
Some specific techniques here include:
- having pre-putaway cart or product audits.
- Managing bin capacity and cube to prevent overstuffing
- Requiring location verification scanning and scanning the product into the bin
- Restricting how typed quantities can be used on putaway. It’s easy for someone to fat-finger “4” instead of a “7” on a putaway and then move to the next bin. Then you have inventory stuck on a putaway cart.
- On the flip side, someone may do the systematic putaway correctly and leave an item on the cart (or equipment), or put the item into the wrong location.
9. Pick Accurately
Picking accurately is another factor in bin and location accuracy. Pickers touch the locations more than anyone else so picking has the potential to create more errors than anyone else. How can you ensure pick accuracy?
First, use scan-location verification and require scanning confirmation of the SKU being picked. You may want to require scanning each item being picked to put one-piece-flow into process. This makes sense for some operations but does not for others.
Measure and audit or cycle count pick shorts. The goal is to develop a measurement of how many pick shorts are “true” — that is, the item was actually not present for the picker to pick–or “false”–where the picker made a mistake or skipped a bin. This can help identify other process defects and help with investigation of errors. This also lets the site develop an accuracy rate for accountability and incentive purposes.
To help pickers with accuracy, ensure location barcodes are readable so no hand-keying is required. Train pickers on how to pick difficult unit-of-measure items, such as packs of product, or move all picking to singles pick and have the order sort and consolidation process handle the total quantity.
10. Smart cycle counting
Use your cycle counters as an offensive tool, not just defensive. It is extremely difficult to fix poor bin accuracy with just cycle counting. This is because pickers and stowers (putaway) are faster, more numerous, and have higher defect rates than cycle counters. So they (usually) generate defects at a far higher rate than counters can fix.
What do we do about this?
First, use cycle counting to measure bin accuracy. This means running regular count strategies to sample and give a reading on accuracy levels. If accuracy is better, fewer counts are required to confirm this. As a side note, this is where empty bin counts are super-helpful – an empty bin is still a bin, is valid in sampling totals, and is faster to count than other locations.
Second, we can develop strategies to hone in on and fix problems efficiently. Once you research a series of inventory defects, research and identify some root causes and see if you can develop counting or process countermeasures for them.
Examples might include noticing that most defective bins were last touched by new putaway employees, so more training or different put audit strategies are needed. Maybe there is a specific bin level or bin type that have higher rates. Perhaps it’s a product type or packaging issue. Then cycle counting strategies become a game of finding counts with the highest defect yields. This gives much more “bang for the buck” on inventory labor.
Last, there may be different types of counting available to use. Perhaps some counts only require verifying the quantity in a bin, while others require scanning each piece in the bin. Use the first type for efficient triage of problems and the second for detailed inventory fixing and cause analysis.
But don’t lose sight of the ultimate point. Cycle counting to fix problems is still rework. The goal is to push the quality as far upstream as possible and void the need for it.
You’ll notice that we didn’t talk about packing, loading, managing rework, signage, or other common topics. This is because quality should come from the start of the operation and be pushed upstream as far as possible. If your putaway and picking are accurate, you’ll need far fewer auditors and problem solvers on the shipping dock. This isn’t to say those processes aren’t important or shouldn’t be checked. But it is to say that the focus should be on minimizing defect creation rather than on fixing them.
Having great quality makes a great workplace. Poor quality can turn the same operation into a stressful, never ending slog for every employee. Look at your operation from the big-picture to the step-by-step details and set the process and people conditions for great quality.