15-Minute Warehouse Logistics

Within the last five years, our company has enjoyed excellent growth.  A lot of our growth can be attributed to expanded market as well as a more national presence in the Philippines.  This growth however also meant an inventory level our humble office could not quite adequately handle. 

Over the last few years, we've tried several setups to balance operational efficiency and customer service.  We still maintain our sales and administrative office here in Mayon.  But we've gone through several warehouses and process changes along the way.

At first, we only just had most of the bulky items moved to our main warehouse.  We still have a lot of items in our smaller stockroom here.  In our computer system, we maintained two separate inventory levels for both facilities.  Unfortunately, this system made physical inventory counting difficult.  Worse, a lot of our transactions require stocks from both facilities.  This made fixing the paperworks difficult and needlessly complex.

So we decided to setup our one true warehouse.  Everything should come out from there.   This way, we only maintained inventory level in one facility.  All our transactions would be under one facility.  It sounded simple and mechanic.  But one constant reaction we got was the dissatisfied look from our walk-in customers as they waited for items from our 15-minute away warehouse.  Walk-in sales is not big percentage-wise, but each one interacts with our office people more closely than most agent and call-in bookings.

Last year, we changed things a bit to improve our response time and hopefully our customer service.  It's actually much more complicated, but that's what you get when you try to put more intelligence into the system.  We would now maintain two facilities again: our Main warehouse and our Walk-in "warehouse".  Our Walk-in warehouse should be a very small representation of the top 30 SKUs most ordered by Walk-in/Pickup clients.  For each SKU, there would be only 1 unit, except for a couple of SKUs people order by 3s or 4s.  Every week, we refresh this lineup to refill the blanks.  Ideally, the Walk-in items are visually countable in just a couple of seconds.  We're not there yet, however, due to space reasons.  Our main warehouse contains the rest of our inventory.  This system requires that we differentiate walk-in and pick-up sales from booked sales.  All booked sales should get their items from the Main warehouse.  For any one sale transaction, items should only come from one facility.

We made another optimization soon after that.  We moved small items and spare parts back to our diminutive Mayon office.  Now that almost sounded like we went back to square one.  The difference was that we did not add another facility.  We still only have Main and Walk-In.  Only this time, we partitioned Main to Warehouse and Mayon.  Any one SKU under Main will either be in Warehouse or Mayon, but not both.  Our pick list now denotes the location of the SKU under the Main warehouse. 

This current setup improves on our customer response time.  It also helps our Service department because spare parts are now closer at hand.  Due to space reasons, counting is still a challenge.  But the enforcement of only one location per SKU diminishes this problem somewhat.

Over time, as we continue to optimize our processes, there will be more changes to improve how we can serve our customers better.