2011 Conference: Banking on Our Future
Best Practices in Warehouse and Inventory Management Barbara Gehlen Second Harvest Food Bank of Santa Clara and San Mateo Counties September 20, 2011
Second Harvest Food Bank Overview • Services two counties: Santa Clara and San Mateo • Distributed over 46 million pounds of food in FY2011 • Fed an average of 240 thousand individuals per month • 2 Distribution facilities: – Santa Clara – 60K sf. (50K sf. warehouse) – San Mateo – 22K sf. (18K sf. Warehouse)
• • •
Product mix: 75% donated and 25% purchased Produce represents 20 million pounds of food distributed Programs include Brown Bag, Family Harvest, Mobile Pantry, Produce Mobile, KidsNow
Total Pounds Distributed 5 Year Trend 50 45
Millions
46.10
FY 10
FY 11
39.84
40 35
46.28
35.44 31.72
30 25 20 15 10 5 0 FY 07
FY 08
FY 09
FY 10 includes Stimulus Program
Warehouse Management Best Practices: • • • • •
Housekeeping Receiving Storage Shipping Safety
Warehouse Management •
Housekeeping – –
Sanitation Pest Control • •
•
Interior and exterior traps with weekly monitoring by outside service High speed exterior doors to keep pests out and reduce loss of heat and/or cold
Receiving – –
All incoming products are recorded on Incoming Inventory form Products are inspected, counted, weighed and tagged before put away •
Temperatures taken on incoming trucks and product
Incoming Inventory Date Truck Time In:
Order # Out:
Item #
Description
Reciever: Start:
All Frozen and Refrigerated Temperature Reading =
End: Pack Size
Expriration Date
Quantit y
Warehouse Management •
Storage – – – –
Cooler: 2700 sf – 260 pallet positions Freezer: 2700 sf – 230 pallet positions (push back rack in Santa Clara) Dry: 2360 pallet positions Temperature Log Form
Temperature Log Date Freezer Storage Cooler Distribution Cooler Warehouse
1 2 1 2 1 2 1 2
Warehouse Management •
Shipping – All orders are verified prior to loading onto trucks – 15 refrigerated trucks ranging from 28 ft to 53 ft. – All trucks are cleaned and safety checked
Warehouse Management •
Safety – Warehouse • • • • • • •
Racks are bolted to cement ground with protectors, wire mesh shelving and netting In ground scales: Calibrated Quarterly Enclosed lighting fixtures Cooler/Freezer have Plastic strip doors for efficiency Material safety data sheet (MSDS) Training – Forklift certification and Material handling In house mechanic
– Food Handling • Products are stored based on requirement, ie. cooler, freezer or dry • Salvage is segregated away from inventory • All plastic bins are washed with high pressure hot water • Training – ServSafe certification
Warehouse Management Highlights •
Grew 45% in 5 years by: – – – –
• • • • • •
Changing the receiving and shipping processes; 2nd shift added Increasing the number of vehicles from 7 to 15 Cross training employees Measuring productivity for each warehouse specialist
Virtual warehouse Reduce garbage (food waste) by utilizing pig farmers Scale has auto-wrap for both safety and efficiency High speed roll up doors to reduce loss of heat/cold and keep pest out Solar panels installed in 2010 decreasing electricity bill by 50% Back up generator and command center for emergency
Inventory Management Best Practices: • Inventory Flow • Inventory Accuracy • Inventory Turns
Inventory Management •
Inventory Flow – Manages the movement of food between locations and programs – Calendars for incoming product and outgoing deliveries – Operations/Inventory/Food Resources/Services/Volunteer Services work handin-hand to get the right products to the right people – Online ordering/ Menu creation (push)
Inventory Management Incoming Produce Calendar Date
Day
1
9/1/11
Thu
2
9/2/11
Fri
3
9/3/11
Sat
4
9/4/11
Sun
5
9/5/11
Mon
6
9/6/11
Tue
Delivery
Pears (28 lg totes) Stone Fruit CANCELLED Potatoes (480 sacks) Onions (850 sacks) Potatoes (840 Sacks)
LABOR DAY Ag Against Hunger Cabbage (32 lg totes) Onions (600 sacks) Stone Fruit (34 bins) Celery (960 trays)
PO / DO# 21422 21428 21406 21419 21519
21462 21478 21498 21527
Excel spreadsheet with vlookup function to populate calendar
Inventory Management •
Inventory Accuracy – Inventory Management System – Ceres 2009 – Bar coding: Both Pallet tags and rack locations – Management • • • •
Not just sitting behind computers, knowing the daily warehouse activity Audited yearly by Berger/Lewis, audited bi-yearly by USDA/FA Receiving/Inventory are separate departments for Financial Controls Cycle Count: Warehouse scans, inventory reconciles
Inventory Management •
Inventory Accuracy –
Pallet Tag with storage requirement and expiration date
Inventory Management •
Inventory Accuracy –
Pallet Tag with Special Pallet
Inventory Management • Inventory Turns – FIFO/FEFO – Measure Produce turns and Non Produce – Forecasting program needs to ensure product on hand and not excess
Inventory Management 5 Year Trend – Inventory Turns 90 80 70 60 50 40 30 20 10 0 FY 07
FY 08 Produce Turn
FY 09 Non Produce Turn
FY 10 Total Turn
FY 11
SHFB References
Pat Ybarra
Maddy Smith
Director of Operations
[email protected] 408-266-8866 x277
Sr. Inventory Manager
[email protected] 408-266-8866 x265
Managing the Flow of Food
Load Balancing, Inventory and Warehouse Management for Food Banks John Curry, Consultant
Outline of Presentation
Load Balancing
Inventory Management
Procurement Allocation Planning Turns, Expiration Dates and Capacity Utilization
Warehouse Management
Managing Multiple Locations Year-End Closures ©2011 JCurry Consulting
Load Balancing: Procurement
Understand supply: costs, timing, seasonality and storage requirements Create a baseline of consistent products Develop capacities to take advantage of onetime opportunities Adapt to long-term trends
©2011 JCurry Consulting
Load Balancing: Allocation
Determine agency demand Determine distribution capacity Commit to and secure commitments for distribution levels Push the product out!
©2011 JCurry Consulting
Graph of Basic Push Distribution Model Item:
UoS
Agency
Onions
Cottage Cheese
Lbs or units per case:
50
50
24
Lbs or units per family:
2.5
2
1
Cases:
Potatoes
Onions
Cottage Cheese
100
A
5
4
4
150
B
8
6
0
200
C
10
8
Key Inputs:
Potatoes
Agency units of service (UoS) Pounds or units per case of each item Pounds or units to distribute to each UoS
Additional Possible Variables:
Family size Preference for items Frequency for distribution ©2011 JCurry Consulting
=ROUND(($D9*H$4/H$3),0)
Load Balancing: Making the Market
By balancing procurement (supply) and allocation (demand), you will achieve an equilibrium which provides a stable and consistent supply of foods to your clients This initial baseline equilibrium can be used to plan future growth and strategic changes It can only be achieved via effective inventory and warehouse management
©2011 JCurry Consulting
Inventory Management: Planning
Must know what is coming in and where it will go Track product in food bank via inventory management software Communication is key:
For large loads, must inform warehouse For odd products, must inform agency relations
©2011 JCurry Consulting
Inventory Management: Turns, Expiration Dates & Capacity Utilization
To maximize effectiveness of product and space, must turn product quickly
Push model aids in this Knowledge of expiration date extensions key
Increasing turns dramatically increases functional warehouse capacity—feed more people more food in the same space
©2011 JCurry Consulting
Expiration Date Extensions from SFFB
Warehouse Management: Managing Multiple Locations
Commercial storage:
should be used to accommodate supply peaks to maximize use of available product can also supplement for large loads or slowermoving items if main warehouse space limited
Satellite distribution:
if product demand similar, try to mirror supply automate replenishment process to achieve greater efficiency ©2011 JCurry Consulting
Warehouse Management: Year-End Closures
Some food banks meet auditors’ requirements while also continuing distribution:
Ask auditors if they are willing to count certain areas at certain times, if so, continue distribution around audit Schedule receiving around audit by moving loads a day or two in either directions Count and close less-used sections of warehouse first ©2011 JCurry Consulting
In Sum: Flow of Food
Managing food flow key to food bank’s success Utilizing procurement planning and push distribution will create supply/demand equilibrium and satisfied clients Effective inventory and warehouse management are the foundation of this balance Plan everything, and be prepared for the unplanned ©2011 JCurry Consulting
My Information
John Curry, John Curry Consulting
415-465-2491
[email protected]
©2011 JCurry Consulting