Introduction Distributor bosses are best at sales but most troubled by management. Today, for all distributors with sales over 60 million, the importance of management has severely constrained further sales growth. Especially warehouse management, which troubles many major distributors. They have tried many methods, yet inventory is still inaccurate, delivery is not timely, and hiring more people does not lead to obvious improvement. Today, I will provide some ideas for major distributors on how to operate warehouses efficiently, hoping to help them. 1. Storage locations must be assigned to specific individuals Whether your warehouse is a flat warehouse or a high-bay warehouse, the storage locations for goods must be assigned to one specific person, not multiple people. That is, the storage and retrieval of a batch of goods should be done by one person, not multiple people. However, the actual operation of distributors is that during inbound and outbound, work is assigned based on "documents" rather than "storage locations." For example, when an order needs picking (order fulfillment) for outbound, one person is responsible for picking all the items on the order and placing them in a designated area, and then another person conducts a review. This picking method is the most common. Of course, there are also methods like "pick-to-light" and "wave picking," but these methods have a hidden drawback: all warehouse personnel come into contact with all products, ultimately resulting in that when inventory is inaccurate, no one can be held responsible. If no one can be held responsible, then real assessment is impossible. Over time, no one will be accountable for inventory accuracy (except the boss). If inventory cannot be assessed to a specific person, the inventory will never be accurate. Therefore, linking inventory to a specific person is the most critical breakthrough for solving inventory accuracy. How to link inventory to a specific person? It is to reform the "document-based" work into "storage location (or area)-based" work, a "storage location contract system." That is, one person manages 300-500 SKUs, and a warehouse area is allocated to that person. The inbound and outbound of goods stored in this area are handled by one person, i.e., warehouse area contracting, and product contracting within the area. 2. Conduct weekly inventory accuracy competitions If a person is only responsible for the inbound and outbound of goods in their own area, then when inventory in that area is inaccurate, they have no excuse. Moreover, with a weekly PK model, the person responsible for the area with the lowest accuracy faces immense pressure, because no one wants to be at the bottom all the time. Under normal circumstances, if accuracy is 100%, then 1/10,000 to 5/10,000 of the weekly outbound volume of that area should be given as a reward. Similarly, if inventory is inaccurate, fines should be imposed. Rewards and penalties make employees feel it is fair. 3. Picking (order fulfillment) must be fast As consumers change, the shipment volume per SKU per store is generally decreasing. Originally, orders were placed by full cases, but now it has gradually evolved into broken-case picking. This is due to market reasons, and no one can change it. Even if your customer relationship is good and you get stores to order a few more cases, they will still return them. Rather than having many returns later, it is better to order less each time and increase the frequency of replenishment. This meets store needs, reduces returns, and increases service frequency. Of course, you might ask: won't increasing delivery frequency increase logistics costs? This is the part where distributors need to transform and upgrade, and I will not go into depth here. In short, broken-case picking will increase in the future, and the efficiency of picking determines our business volume. A dedicated broken-case area is needed. If your company's broken-case volume reaches more than 50% and the number of SKUs exceeds 2000, then first, you need a dedicated broken-case area, i.e., full cases and broken cases should be separated. If there are many broken cases and they are still mixed with full cases, then workers will have to walk very long distances in the warehouse, leading to long working hours and high physical exertion. Therefore, setting up a dedicated broken-case area can greatly reduce the time for picking broken cases. Of course, some might say that using a combination of batch picking (pick-to-light) and order splitting (wave picking) can also improve efficiency, but this method is not suitable for distributors with many SKUs, nor is it suitable for the future of B2B. When picking an order, you should not walk back and forth. That is, the first item on the picking list should be the item where you start walking, and as you walk inward, you follow the order from top to bottom. This is also to reduce unnecessary walking. Replenishment must be timely. Generally, replenishment is done when picking is not working (at noon, evening). The quantity of replenishment needs to be comprehensively analyzed through backend data, which should meet the day's picking volume but not overfill the broken-case area to hinder walking. The timeliness and accuracy of replenishment quantity determine the speed of picking and the order completion rate. 4. Product storage locations must be scientific Place fast-moving products as close to the starting point as possible. Which products move fast needs to be analyzed based on backend data. Adjust the storage location order of products based on the analysis results. It is recommended to adjust the product order once a month. In recent years, artificial intelligence has been hot. Artificial intelligence does not necessarily mean installing a robotic arm in the warehouse, but it can include adding electronic labels (to quickly guide personnel to find goods), smart weighing carts (to prevent personnel from picking wrong goods), mobile PDAs (for paperless picking), etc. Through hardware assistance, improve personnel work efficiency. In the future, warehouses of distributors will definitely have fewer people, and artificial intelligence will become more and more advanced. Artificial intelligence is the transformation of distributors from "internet" warehouses to "internet of things" warehouses. Therefore, in the current environment, investing in some artificial intelligence equipment is also a correct improvement method that leads the times. I have surveyed many major distributors with sales over 100 million. In fact, they are not worried about having no business in the future, because human service with emotion can never be achieved by machines. As long as they do a good job in service and create value for stores, business will get better and better. What major distributors are most troubled by now is how the backend can serve the frontend stores faster. If a major distributor is compared to a person, a major distributor not worrying about business is like a person not worrying about food. In this case, if this person wants to eat more and more (scale getting bigger), what is tested is not his mouth but his digestive system. Warehouse logistics is the human digestive system. The faster the digestion, the more one can eat! Source: Efficient Operation of Distributors -END-