Mushrooming in Warehouse

I do not know a single person in my area who would not take a basket in his or her hand at least once in their life, a pocket knife in the pocket and did not go in the woods for a mushroom picking adventure. Walking in the woods, making way to the best places where they are "guaranteed to grow", is a noble pastime that Karel Čapek himself has written about. However, there are places where mycological passion should be forbidden.

I recently walked with the high-level managers of their company's production and storage facilities. They were right to be proud of. The company is developing dynamically, taking care of its employees and investing in new production technologies. Although it is an engineering production, cleanliness and order would not have to be ashamed of many food operations. When the tour was almost over, we stopped by one of the many shelves with material stored. I admit that the question that I have asked has occurred to me several times during the field trip. Now, however, came the right moment: "Excuse me ... what is here on this palette?" I pointed without hesitation to an unlabeled pallet in an unlabeled bin, thoroughly anonymized with cardboard, without any visible identification. One of the performers responded swiftly and sincerely, in a somewhat apologetic tone: "You know, we're kind of mushrooming here sometimes!"


This situation is not unique. Many manufacturing companies focus on supporting key processes, sales and production, which of course is logical. Sooner or later, however, there will be a moment when the amount of movement of material and semi-finished products within the company reaches a level that cannot be managed simply by extending staff coverage. Significant organizational changes need to be made as these processes become limiting in further development.

The best group of warehouse workers with the growth of warehouse and production space reaches a state where their "reserve" they stop "gathering" at their favourite places and begin to wander around the warehouse halls like in the forest. They are looking for the right crate, pallet or barrel that is currently needed in production. And not only warehousers move around warehouses. Even quality controllers, with their measuring devices, must regularly go to the areas with intensive storage. They take test samples, release freshly received material for further processing, or retain semi-finished products that have failed in previous manufacturing operations. They can also be considered as experienced mushroom pickers. On the other hand, buyers or retailers who go less frequently from their offices to the warehouse operations require an experienced guide in the "forest" of shelves and storage areas.

The result of this state is that in warehouses not only mushrooming but mainly waiting. The operator at the machine remains for the warehouse worker to bring the material or semi-finished product for processing. The warehouse worker waits for the quality controller to release the required material or stock. The Quality Controller is waiting to verify that the buyer has received the correct receipt and all the actors mentioned above are waiting for the seller and the shipping department to satisfy the customer's order in the required time finally. The first seemingly most logical step towards a successful solution is a massive increase in storage capacity so that the currently available stock at all times covers production needs. This solution works and production and sales directors are meeting their goals. Only after some time, the fact that this development was not entirely free emerges. Negatives are usually first highlighted by the economic department, which will see an increase in total storage costs. The value of stocks of materials, semi-finished products and work in progress is increasing. Also, this is not just an internal problem for the company, as banks lending operational loans can negatively assess this.

The experienced team of mushrooming staff can cope with the situation of unnecessary warehouse space under certain conditions. The problem multiplies at the moment when it is necessary to meet the specific requirements of the customer demanding detailed monitoring of the movement of materials and semi-finished products during production, continuous quality control, not only during production but also during storage.

Moreover, the processes mentioned above in engineering production are no longer only in the automotive customer segment. Similar requirements are becoming increasingly common among ordinary customers today. The mere knowledge of employees can no longer ensure detailed monitoring of production batches (lots, melts) and serial numbers of specific components, organizational measures and records kept through paper documents.

The second way how to manage the situation and manage it in the long term is so-called address storage. This is associated with the consistent marking of all materials, semi-finished products and products with registration plates with detailed information. It is necessary to mark all sections, shelves, shelves and storage areas with unique identifiers, to prepare a large number of tags and dispatch forms, which are then filled in by operators in production and warehouses. As a theory, it works great until there is a collision with the everyday operational reality. Indeed, address storage is necessary, not a sufficient condition, and this way of recording works optimally only for a specific time. If supported by the subsequent re-entry into the information system, it will suffice a little longer. This is because such a solution is very sensitive to natural human error or communication noise between individual employees or entire departments. Through such records, we never know the state of the current warehouse or production. We can only find out what they were in a more or less distant past since the individual data collected from production, warehouses, purchasing or shipping does not have to cover the same time, which can negatively affect processes at different levels.

In my practice as a consultant, I have also met an opinion that equipping warehouse workers or production workers with mobile terminals for real-time collection of information would be sufficient, but problematic. Potential users could see this as another complication of their work, which is a fundamental mistake. It all depends on how good the enterprise information system is to which mobile terminals will deploy data collection.

The basis of successful implementation of data collection in real-time through mobile terminals is a high-quality information system supporting all key and managing company processes. There are many ERP products on the market that specialize in manufacturing or warehouse processes. Some companies prefer a heterogeneous environment made up of multiple subsystems from different vendors that optimally cover their needs in each area. Such a solution has several advantages but also pitfalls. They only work well if the company builds a strong internal IT department that assumes the role of a system integrator. It analyzes changes in business processes continuously, defines change requirements, coordinates communication between subcontractors and last but not least performs testing. It is not easy to build such a department, it is not cheap, and it is not fast. The facts mentioned above show, there is a third way of "not mushrooming" in warehouses and during production. Before an internal decision is made to control the movement of material and semi-finished products in real-time, first evaluate that your information system is ready to do so. The desired effect will only be achieved if the information collected in this way reaches the necessary recipients at the same speed as they were acquired.

I met many sales officers who were forced to run into production several times a day. They verified that the production order was completed to confirm the shipping date for the customer. I met buyers who, according to the calculated plan, without the possibility of feedback on the current state of the warehouse, ordered a specific material until it was almost nowhere to fold, not to mention the operational planning of production itself.

If your system is unable to do this, consider changing it. Today, many sophisticated business systems are available on the market that is capable and ready to cover the processes described above, capable of avoiding critical situations that may jeopardize the operation of production and warehouses in the company. If you are looking for such a system, do not hesitate to contact our Brno company NAVISYS, our consultants will be happy to help you with this selection.

Adam Jakeš

Application Consultant

NAVISYS s.r.o.