Warehousing is a critical component of beverage alcohol wholesaling, and there’s a host of unique challenges when warehousing beverage products.
To better understand these challenges, and how warehouses are improving their systems with efficiencies and new technologies, I recently spoke with Patrick Kerns, General Manager of retail for Exel, a warehousing contractor for the New Hampshire Liquor Commission.
Beverage Wholesaler: What are some of the biggest challenges facing beverage alcohol warehouses?
Patrick Kerns: When you’re in the retail business, you have to adjust very quickly to volume demands because your sales window is small. Orders that drop tonight will be shipped in two hours. That can be anywhere from 3,000-13,000 cases.
BW: How do you handle that volume fluctuation?
PK: You have to know your trends. That means keeping up with seasonality. We have basically two big pushes for wine and spirits each year. These are summer, because New Hampshire is such a big resort state, and the winter holidays through the end of the year.
You have to staff for that volume. And you need to inventory even as you’re in the middle of it. After all, a bottle must be on the retail shelves for a consumer to buy it.
We also keep a close eye on historical data. Our management system, the Manhattan Associates inventory tracking system, records everything. We’ll look at the data, tracking the historical trends back about two-to-three years. That’s when you start to see trends. Usually those are around where the holidays fall, when the weather turns, and we’ll plan around that. You’ve got to get good at this.
BW: What are some of the efficiencies you’ve located with slotting?
PK: With slotting, you want to locate the highest-moving inventory and move it to the most efficient part of the building. That way, the pickers don’t have to move as far to pick up these high-volume orders.
We’ll slot by seasons. We’ll get familiar with what the summer beverages are. The holiday season really means champagnes. We’ll re-slot the whole warehouse to set the product up for efficient picking multiple times per year.
BW: What about picking efficiencies?
PK: We voice-pick. It’s fairly efficient. The individual wears a headset and talks into it. All the orders are loaded into our system, which tells the operator where to go and what quantity to pick. The operator will verify the orders with their voice. It’s inventory in real-time. Updating and replenishment are more efficient.
BW: What’s next for warehousing technology?
PK: They’re coming up with all kinds of new technology. Vision picking is coming. I saw that recently at a DHL meeting. The individual is wearing glasses with a scanner in them. You can scan the barcode in the location of the product. But that technology is still being refined.
Any business has to be constantly looking at new ways to improve their processes and make them more efficient. The customers want the product when they want it, and you had better get it to them quickly.
BW: How do you handle individual bottle picks?
PK: We’ve recently consolidated that so retailers no longer have to order by the case. They can order by the bottle now. It took a lot of planning and efficiency on our part. We’ve blended the bottle and case pick together so that the case picker can also bottle pick. It’s a different command in our voice system. In the past you had to go to the RF gun, but we recently modified it to a voice command.
BW: How do you maintain accuracy of inventory?
PK: What really helps is accurate scheduling with vendors. When they want to come in they have to schedule it appropriately. After all, the faster you put it away, the faster you can put it out.
We really work with vendors (especially the big ones) to make sure we have a set number of orders per day, as opposed to vendors coming in at random. We do 100% live unloading and spread out the time of the delivery trucks so that they can really flow into the building. That helps with accuracy. The more accurate your inventory, the better your efficiency.
BW: How do you make the most of the warehouse staff?
PK: We have a good team here. We’ve built a culture of people who want to do a good job. All of them are committed to customer service. We really try to promote that here. We talk about it all the time. We remind all the staff that they’re part of it, the customer service.
I always say that associates are your biggest asset. And if they care about what they’re doing then they’ll do it well, accurately and with efficiency. You can have the most accurate system in the world, but at the end of the day it’s still being handled by humans.
Which is why it’s also important that you always listen to your associates. Because they’re the ones who do all the work. They can give ideas to you about how to make the systems they work with even better.
At the end of the day the most important thing is to truly understand what the customer expectations are. Then you can build your processes around those expectations and put them in place and make sure you are meeting customer expectations.