Wednesday, June 10, 2015

Project Nostalgia: Warehouse Management

All Work and No Play

Early in my development career, I got a job at an entertainment company that rented party supplies like inflatable bounce houses, inflatable slides, human gyroscopes, etc. On my first day, I was introduced to my new boss, the owner of the company, on his way out the door headed to China for 2 weeks.

I introduced myself, thanked him for the opportunity, and asked what he wanted me to work on while he was gone. "You'll figure it out," he said, "make us some money." And out the door he headed.

Once I found my office and tracked down a computer, I sat down and thought, "what the heck am I going to do here?" Having just gotten my MBA, I decided I'd take a page from my business consulting class and just "see what my lantern shows me." I walked around asking my new coworkers what the company does, what they do, and what could make their lives easier.

There were the usual gripes, manual processes, duplicate paperwork, etc. One problem in particular, however, I found particularly intriguing. It turns out that the company had an uncomfortably high refund rate because they'd show up at parties and equipment would be missing. They also would only schedule a few parties a day, despite having plenty of equipment to spare, because it took so long to prepare for an event. Similarly, they required reservations be made a week in advance.

Shopping in Your Own Warehouse

If you're like me, when you make a grocery list, you write items down in the order you think of them. Then, when you go to the store, you walk up and down the items, grabbing things from the list and crossing them off as you go. Also, if you're like me, sometimes you pass an item and you have to go back. Or, you don't notice an item that you missed and you go home without it.

If you want to try an experiment (actual or thought), commit to going to the grocery store and getting everything on your list in the order it appears on your list. You'll probably find you forget less stuff, but you do a lot more walking around the store. It's not a particularly efficient way to organize a shopping trip. If you implement this in, say, a warehouse you may issue fewer refunds but you can't increase the number of events you can service in a day.

I'm sure by now, you're imagining myriad ways to organize a list of grocery items so that, if nothing else, at least you have some consistency. You could organize them alphabetically. That way, your items on your list will follow more or less the same pattern visit to visit. That may or may not be better than in the order you thought of them (assuming you remember grocery needs that are grouped together).

Imagine, however, that you can't sort your grocery list in the order you think of it. Imagine you can't even sort the list alphabetically. In fact, your only option is to sort the items on the list in the order the item first appeared in your grocer's inventory. Imagine how nonsensical it would be trying to track down where all of your groceries were. How much you'd forget (or perhaps even leave deliberately). That's what we had.

A Guided Tour

I printed our inventory list and I walked around the warehouse writing down the exact coordinates of every product and every component we had. I also estimated the volume, weight, and stack-ability (if you will) of the item.

Hoping to get a cheap win and to prove that it could make a difference (some of the guys in the warehouse weren't interested in their inventory lists being optimized), I got a few of the guys to agree to try it out for 1 day. I entered my data into the inventory table and sorted the inventory list by aisle, bin, then level. That was it. Only took a few minutes, was easy to revert if it failed, and I could switch it based on the user.

When I got back from lunch, one of my coworkers who sat outside my office said, "hey, warehouse really wants to talk to you … they've been in and out of here constantly since you left." I thought, "oh no . . . I probably broke something and they can't print inventory lists at all now."

I headed out to the warehouse preparing my apology. I had barely walked through the door when someone said, "hey Patrick, check this out?" There were several palates stacked with boxes and party equipment distributed along the loading dock. "What's up?" I asked.

Turns out my first sorted list was such a hit that they decided to start racing each other to see who could fulfill the inventory list faster. They had not only prepared the next days events, but several days after. I know it doesn't sound like it should take that long, but this warehouse typically had 4 or 5 people preparing 10 or 15 parties a day give or take.

A Deliberate Solution

Feeling I'd created some real value, I went back to my sorting. I updated the logic so that bins were in reverse order on odd number aisles (they started at the end of aisle 1, went to 2, the back up 3, and so forth). I sorted the items so that, given close proximity, the larger or heavier items would appear in the list first so they'd be on the bottom of the cart.

In the display, I grouped the items by aisle. Once I did this, I realized I should start at the end of the first aisle that had equipment on the list, then continue on the beginning of the next aisle with equipment (rather than just naively going up and down each aisle). With the help of the warehouse team and some statistics I pulled from the historical invoice data, we also started physically grouping items based on how frequently they were pulled on the same list.

Some of them were obvious. If you ordered an inflatable, you'd likely also get a blower. People who rent tents also rent chairs. Some were less obvious. People who rented dance floors typically didn't rent inflatables but did rent a bar and concessions. Once we established that not only could we control our own inventory but that we can control our own reports, it became a game to optimize the process.

In the end, it only really took 1 person to run the entire warehouse, though we staffed 2 because people liked working together. The rest of the warehouse team got promoted. It was actually something of a coveted job to get to deliver the equipment, spend some time outside, visit with the people having the party (partying people are usually pretty happy people).

We also started booking more parties. We even booked parties same day if we had the equipment and the people available. I'm sure there are COTS products that are really good at solving this very problem, but solving a real business problem with feedback from the people who were most impacted by it and seeing measurable gains in revenue was well worth the effort. It also help build some relationships and establish a collaboration they'd never had before (I was the first developer who worked onsite).

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