If you had a chance to read my post last week reviewing proper ordering and receiving procedures for managing your school nutrition operation, you’ll recall that I was speaking from the perspective that the schools are in charge of managing their orders and deliveries with outside third-party vendors. This week, we’re going to take a look at what happens when the school district has a central warehouse that acts as the middle-man during the inventory ordering, receiving, and put away process.
If your district utilizes a central warehouse, chances are that decision was made to solve a problem or fill a need that had previously been unmet. Commonly, districts choose to create a central warehouse to obtain price breaks by buying larger quantities of items at once. Other reasons could include a desire for a central location to store the district’s commodity allocation, or the need for streamlining a large district’s individual site operations from a centralized hub.
Orders in a Warehouse Environment
Warehouses are unique in that they typically accommodate two very different types of orders – orders based on menus and production schedules, and those that are based on pre-determined par levels. First, let’s dive into orders made with a particular production schedule in mind.
For these types of orders, a school’s menu cycle has been created in advance, and based on that schedule, an order is generated for all the items that are needed to complete production. The central warehouse receives orders from all sites across the district and the warehouse manager consolidates those orders into a few large orders with various vendors. Keep in mind that the order should be placed with the warehouse with a minimum of 3 weeks from the actual production date to allow enough time for the warehouse to place orders with vendors, receive deliveries, and then ship goods to school locations.
For certain items, the warehouse may utilize par level ordering. Par items are goods that are used frequently, and thus are always needed in stock. Items such as paper goods and chemicals are often designated as par items.
The amount of those items that you want in stock is generally determined by the previous year’s usage and taking into consideration any large changes in the district that have occurred since then (such as the opening of a new school). When setting the par level for an item, the best practice is to take the previous year’s usage and divide that by how many delivery periods your warehouse has (whether those periods are monthly, bi-weekly, weekly, etc.). The subsequent number will function as your par level.
When the number of par items falls below a predetermined reorder point, a par level order is generated. Count the number of items in stock and subtract that from the par stock level. The result is the amount to reorder. By knowing the par stock level of an order, you will prevent over-ordering, which saves YOU and your operation money!
Receiving Orders into the Warehouse
When a vendor delivery arrives to your district’s central warehouse, where do you place all the items? Chances are you need time to assess the items delivered, check them for accuracy, and figure out the game plan for where the newly delivered items will be stored.
Most central warehouses unload items off the delivery truck and place them in a designated receiving area. More often than not, this is just an area on or very near the loading dock. It is here in the receiving area, that the items sit until they are placed in the correct and final storage location.
The largest and most complex warehouses may have receiving bins where newly delivered items are placed as they await put away. However, for our purposes here, I will not discuss that set up as it is not commonly found among school district warehouses.
Put Away Items for Storage
Once the items have been received, a spot in the warehouse must now be found to store the newly delivered items. In smaller warehouses, the process may not be very complex as the items may simply be put away on a shelf that is easy to access. However, in many central warehouses that is not the case.
Larger warehouses operate using a bin system for storage of their items. Items are assigned to a certain aisle and bin number, and then placed into their bin sorted by batch number. It is here that the items wait until they are picked for delivery to a school site.
If you use a software system to help you manage your warehouse inventory (and if you aren’t, you really should consider it), it may offer you some guidance that helps organize the put away process. The software should suggest where to store certain items based on proximity to the same items or similar items. Storing similar items near each other is advantageous for many reasons which I detail in next week’s post.
I mentioned that items should be placed into their put away bins by batch number. It is important to track your delivery batches separately for several reasons. First, tracking your batches separately helps your operation be as efficient as possible in practicing FIFO (first item in = first item out). Secondly, it is useful if your operation runs into a pricing discrepancy with a vendor. Finally, tracking batches separately is crucial because traceability becomes easier if, in the unfortunate circumstance of a recall, you find yourself scouring your inventory for affected batches.
Next week, we’ll wrap up talking about central warehouse inventory management with helpful tidbits about the picking and distribution processes. In the meantime, I want to hear from you!
Comment below and let me know if your district has a central warehouse of some kind and what you see as the advantages or disadvantages of having/not having one!