Inaccuracies in the distribution center can dramatically affect costs, profits and business expansion opportunities. On the surface, inventory and operational inaccuracies are directly connected to internal costs such as labor and warehouse space utilization. But in addition to those factors, inaccuracies trigger significant pain points that affect a company’s ability to compete, including supply chain disruptions, deficient customer service and the inability to address market trends such as SKU proliferation, retail compliance and escalating transportation costs.
According to Bill DeWitt, Boyd distribution manager, “Our distribution accuracy really picked up in the early ‘90s, when we implemented Intek Integration Technologies’ Warehouse Librarian system. At that time, we were faced with a multimillion dollar warehouse expansion to gain the storage space we needed to run our distribution center efficiently. However, with this system and its advanced slot management capabilities, we were able to postpone the warehouse expansion for several years.”
DeWitt says that his company measures accuracy based on shipments going out and errors being reported back and recorded according to sales routes. “We have numerous routes that receive shipments weekly.” He adds, “The route salesman is responsible for that freight and checks everything in. The salesman is charged for the shipment on his inventory and it has to balance.”
DeWitt reports Boyd Coffee Co. today has 99.8% accuracy of shipments based on reported errors. He adds that the software has enabled the distribution center to add both space utilization and labor efficiencies, saving on internal costs. In the 1990s, the company had some issues tracking inventory due to warehouse congestion, but now the system keeps track of everything.
“Today it is much easier for us to know where everything is located,” he says. “I can run a report in less than 15 seconds and I can tell you where every pallet of a certain code is in the warehouse. If it is a location report, it will give me the received ID and the location of any SKU. And now that we have additional space to accommodate our growth, the efficiency has grown amazingly.”
As the need to control internal distribution center costs-labor and space-increases, so do other market trends that create both internal and external challenges. Many distribution centers are confronted with SKU proliferation, for example.
Boyd uses the software as an inventory controller, and it helps maintain a high integrity. “We rely on it to send that information up to the host system, which is the controller of the actual inventory,” says DeWitt. If you don’t maintain the checks and balances, the system can get away from you. But we take the trouble and have the systems to do that, and our inventory program is virtually flawless.”
For more information:
Stan McLean, Intek Integration Technologies, 425-455-9935, ext. 1117, firstname.lastname@example.org