Go with Your Gut If You
do Not Have Enough Data. Avoid Data Paralysis
One of the companies I worked for was
undergoing a rapid growth spurt. Sales increased 500% in one year. All the
internal systems and processes were experiencing severe growing pains.
Warehouse space was at a premium for both finished and unfinished product. An
internal plant space utilization team was formed to deal with the need for more
space. Everyone on the team had different ideas for maximizing the square
footage of the warehouse but most of it was in a two dimensional mode or length
x width of the storage. I knew from my
industrial engineering background that volume or length x width x height had to
be considered. Most of the storage utilization data we had was old and inaccurate.
It was hard to get a handle on the data. We were under tremendous pressure to
get solutions.
One of the major materials that we stored was
large corrugated cases or what we called knockdowns. They took up over 50% of
our storage space. They were stacked in
bundles of 100 three high (300 total). I was curious as to why this was done
and asked the forklift drivers if they knew why. They said that that previous
materials manager required the bundles to be in 100s, because it made it easier
for him to take inventory. This piqued my curiosity and I called our corrugated
case or knockdown supplier. They remarked that we were the only customer that
required a bundle count of 100. I did not wait for a study or more data; I went
with my gut and told them to increase the bundle count to 150 from 100.
The
forklift drivers proceeded to stack these 150 count bundles three high also.
There were no stability issues. Thus in the same square footage, we went from
300 corrugated cases to 450 corrugated cases. This was a storage space
utilization increase of 50% at no cost. This greatly decreased the amount of
new warehouse needed to support the sales growth spurt. Go with your gut if you do not have enough data. Avoid data
paralysis.
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