We were contacted by a mixed merchant owner who was experiencing significant issues with their stockholding. Issues ranged from stock shrinkage and damage through to time taken for goods receipting of supplier deliveries, as well as the time taken to pick and load customer deliveries.
Solution delivered:
After talking initially with the owners to understand their concerns, we spent time with their Finance Director to understand the extent of the problem, and the data available to help us measure and monitor shrinkage.
Our team then spent time in the warehouse, understanding the existing goods receipting and picking processes, including how and when stock is checked and entered onto the ERP system, and by whom. This included liaising with the yard teams, seeing how they complete pick lists and load vehicles, focusing particularly on how and where stock is located.
The merchant’s stocktaking processes were also reviewed (both manual and ERP generated) to understand how annual stocktakes are undertaken, and what capability exists for perpetual physical inventory (PPI) checks to be undertaken on a more regular basis.
Our recommendations centred around how the stock was identified and managed, with it becoming clear that bin locations and dual bin location methods were not being used. As a result, it was paramount that the warehouse teams were supported with product and warehouse management training.
In addition, we found that significant stock damages were being incurred, due in part to where stock was located, but there was also a need for refresher forklift training centred around the control and use of forklifts and efficient loading procedures.
Our final recommendations centred around the stock management elements of the ERP system, with bin locations being introduced and PPI checks implemented on fast-moving items to ensure stock collections were accurate. As a byproduct, warehouse teams were trained on how to book stock in and terminals were provided within the warehouse, to ensure that stock and back orders/credits were recognised at the time of delivery. This helped to maximise both stock level accuracy and cashflow, allowing negative stock controls to be implemented.
Results achieved:
Following the implementation of our recommendations above, the owners saw a significant reduction in stock shrinkage, improved accuracy of stock levels, and pick rates for deliveries and credits raised to suppliers for short or damaged goods delivered also improved.
In addition, the time it took the merchant to undertake the annual stocktake and the overall level of stock loss on the day of the count was reduced. Engagement from the warehouse team improved, too, following an investment in their training and development that helped them understand how important their team’s performance was to the overall company performance.
If you would like to talk to us, informally and in confidence, to understand how we can help you and develop your business, please contact info@moorgatemanagement.com or call Chris Maityard on 07767 291379.