Based on statistics from my studies, receiving and put away consume 24 percent of the cost in the average healthcare distribution center. Below are some best practices for controlling that cost.
Implement ASNs An ASN (automatic shipment notice for inbound receipt) notifies the distribution center of a pending delivery and is usually sent in an electronic data interchange transmission. This improves inventory accuracy and greatly reduces receiving costs. Cost reduction estimates are in the 40–50 percent range.
Fast put away Best-practice distribution centers put away product quickly to avoid unproductive congestion and enhance security. Companies should measure “dock-to-stock” time to help facilitate this process. Goods should be placed in the best locations to minimize the travel distance and time of distribution center personnel.
Returns More companies should pay attention to returns. Instead, reverse logistics is often treated as an afterthought and managed in a highly disorganized manner. When it comes to handling returns, many companies leave a lot of money on the table.
Costs must be carefully balanced against customer convenience. A return may be a second opportunity for your company to succeed at delivering a product to a dissatisfied customer, or it may be connected to remanufacturing or refurbishing. Opportunities exist to streamline and save on reverse logistics. A little attention here can pay big dividends.
Cross docking Cross docking is the process of receiving product and shipping the product out the same day without putting it into storage. Since picking and put away consume most of the cost in a typical warehouse operation, productivity skyrockets if those two activities can be eliminated. As firms look to make the next big advance in distribution center productivity, cross docking merits a very close look.