December 28, 2021

Driving Rigor into Your Inventory Control Practices Helps You Win the Race

This article first appeared in Logistics Viewpoint 2021 issue. Author: Dave Haley, Customer Success Executive, Open Sky Group and excerpts from the original appear below.

“Anyone else fascinated by the TV show, “Formula 1: Drive to Survive” on Netflix? I am. And it’s not because I’m a race fan (I’m not). I am drawn to the scale of the Formula 1 racing circuit. It’s amazing. The drivers’ skills are unworldly. They are all the best in class with some better than others and everything needs to click. Kind of like managing inventory in your warehouse. The scale may not be as grand but the need for everything to work correctly is the same.”

The design of the car is critical, just like designing your inventory control process

“While there is consistency in the mechanics, some variation is allowed. Designing an inventory control process has some basic steps that can be modified based on business needs…”

Flawlessly navigating the track can cut critical seconds from the driver’s race time

“Investing time to construct an optimal flow of material in the warehouse will reduce unneeded steps… Just as a race team looks for opportunities to maximize their routing around the track, inventory management needs to be included when designing the material flow in your warehouse. Make sure all the corners are navigated, but no corners are cut.”

During a race, pit stops need to be flawlessly executed to keep the car competitive.

“The replenishment logic and smooth execution of inventory moves will keep pickers executing without waiting time. Slotting logic will keep required levels of stock in the picking locations, limiting the need to stop picking to replenish inventory needed to complete the orders. … An emergency pit stop will be needed at times and emergency replenishments will have to occur. Both need to be executed efficiently and without error. Track your emergency replenishments. Do a root cause analysis and correct the reason that drove the need to urgently replenish stock…”

The driver is in constant communication with race control, monitoring the car’s performance and giving information to help the driver best navigate the track.

“… In the end, the skill, the training, and the discipline of the driver determines the effectiveness of the excellent design, processes, and controls the team has put in place. Feedback from the driver gives the crew information on how the car is performing that may not be visible to them… Likewise, the warehouse is dependent on the operators following a process and providing feedback on better ways to execute tasks while still following the established instructions until adjustments can be made… You need the right people in those jobs that are well trained and disciplined to follow the plan all the way across the finish line.”

At the end of the Formula 1 race, the three top teams get to the podium.

“Those teams that won had the best design, managed the track the best, made the most of their pit stops, had smooth collaboration between the crew and the driver, had a well-trained associate behind the wheel with the needed skillsets, and followed the process… In a warehouse, inventory is the lifeblood. Managed properly, warehouse leaders can use inventory control as a competitive advantage in creating a best-in-class warehouse operation…”