The importance of creating a warehouse assessment plan

Ensuring your warehouse operates at optimal efficiency should be top of mind for all businesses, regardless of size, scope of services, or industry. But with so many areas to cover, it can be difficult to know where to begin.

Sunil Bharadwaj, a managing partner with ImpactEazer Consulting with more than 20 years of experience in the supply chain sector, provided a roadmap for warehouse assessments during the Association for Supply Chain Management’s Connect conference in Austin, Texas.

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As Bharadwaj pointed out, when it comes to warehousing, organizations can break this down into six categories:

• Plan: demand management, planning and forecasting, sales and operations planning.
• Source: purchasing, procurement, strategic sourcing, spend analysis and inbound logistics.
• Make: production planning, operations, capacity planning, scheduling, quality, safety and maintenance.
• Deliver: warehousing, transportation, order management, customer service, distribution and last-mile delivery.
• Return: product returns, reverse logistics, recycling, refurbishment, and reuse.
• Enable: knowledge management, training, operations excellence and business excellence.

Bharadwaj said warehouse assessments should include a structured, systematic, and detailed review that encompasses end-to-end operations, processes, activities, employees, infrastructure and the systems in use. Above all, warehouse assessments need to be unbiased, impartial and honest.

The need for an assessment

There are various reasons organizations might need to perform a warehouse assessment. Changing product profiles and customer expectations, operational speed and accuracy, inventory management, delivery paradigms and returns management can be fluid and in need of review.

“These are issues we are constantly grappling with,” said Bharadwaj, adding that businesses need to consider current warehouse trends and best practices during their assessment. These trends include automation, a multi-skilled workforce, process excellence, customer focus, sustainability and risk and resilience.

Creating an assessment plan

A warehouse assessment framework starts with establishing an objective and scope. It should then include area checklists, a scoring methodology, visits from third-party logistics providers (3PLs) and stress tests, performance scores, observations, identifying areas for improvement and finally, recommendations and a way forward.

As for the areas an assessment should examine, Bharadwaj said to include inventory accuracy, put-away logic, visual management, space utilization, returns management, warehouse layout, staff productivity, warehouse management system (WMS) utilization, safety and security and customer service.

Key points

As Bharadwaj highlighted, clarifying the objectives of a warehouse assessment is key to its success. This begins with creating a focused checklist and questionnaires prior to the assessment that address all aspects of the warehouse’s operations.

“We are talking about warehouse control systems instead of just management systems,” said Bharadwaj.

Allowing time for site visits and walkthroughs, taking videos of inbound and outbound activities, discussing the findings and establishing solutions to what needs to be addressed are all steps to creating a successful warehouse assessment.