Inventory Management and Realizing the Full Potential of Engineered Labor Standards in Distribution Centers

Inventory management is often talked about as a way to keep track of product to reduce shrink and maximize profits. However, poor inventory management can also affect the proper implementation of discrete labor management systems such as FLEXdls or Red Prairie. These systems rely on accurate item counts, case cube measurements, slotting sizes and case weights to produce accurate engineered labor standards. If inventory management is not kept in check, the standards employees are being held to will not be accurate and companies will not realize the maximum savings possible with discrete labor management systems.

In distribution centers, forklift workers, loaders and product selectors make up the majority of labor in the warehouse. These workers are also the most affected by inventory management. As selectors work through their pick paths, they deal with product counts, product size and product weights at each location they visit. If product counts are incorrect at locations, products may have to be shorted due insufficient inventory in the pick slot. This causes additional non-value added labor for the selector by having him return to this location at the end of his pick path.

Forklifts can also be affected by inventory management while replenishing pick locations or putting away incoming product. When replenishing pick locations, fork drivers are system directed to locations that are in need of filling. When inventory is accurate, there is no problem with this. However, once a slot’s inventory becomes inaccurate, fork drivers will be taken to location where no work is needed. This causes wasted labor and takes away from fork’s ability to create value by filling pick slots that have a legitimate need. Forks responsible for putting away incoming product rely on correct pallet sizes to be directed to appropriate locations to store that pallet. If the dimensions of a product are incorrect, a fork can be directed by the system to an empty slot that is not large enough for the put away, causing workers to search for available locations or to take the pallet to the dock to report incorrect sizes.

Inventory management stretches as far as the workers loading trucks. When pallets arrive on the dock with incorrect dimensions, they may not fit into the trucks causing excess down stacking and altering of picked pallets. For companies to realize the full potential of discrete labor standards, inventory management must be kept in check to have accurate and the most efficient standards possible.

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