When determining who your priority customers are, there are a number of unique factors to consider:

• Are they the customers who have been with you the longest?
• Are they the customers who rely on you as their primary supplier?
• Are they the customers who are the heart of your business?

You already know that serving these customers well will pay off by improving your future sales and improving your word-of-mouth reputation. However, in order to truly serve your customers efficiently, you will need to ensure your warehouse operation covers all the basics, including utilizing color priorities and pick lists.

Begin By Determining What Priority Means to You

When it comes to customers, each one is valuable to the success of the company, and it is important to treat each customer as such. However, the term "priority customer" indicates not so much a value statement, but a necessity statement regarding the delivery of that customer's order within a certain process or time frame. What qualifies as a priority customer will differ for each warehouse and is based on any number of unique identifying factors.

Once you have determined what qualifies as "priority" for your warehouse, in order to effectively and promptly serve the needs of those customers, it is helpful to assign special colors to those orders as they come in. These colors indicate that those orders are top priority so that when your material handlers see one of these color-coded lists come up, they will know that it must be picked and packed first. While you could create a deeply detailed color-coding system, it is actually better to keep it simple. Using no more than two or three special color codes will allow your material handlers to do their job more efficiently, and with fewer mistakes.

Although color priorities and pick lists are considered basic activities for modern warehouse management, many companies still either don't use this technique or only use it with a limited number of customers. Using a well-defined color priority system in tandem with your pick lists can maximize warehouse efficiency across the board and better service your customers at the same time.

For Example...

An auto parts distributor recently expanded his warehouse space due to an increase in new customers. By taking on more customers, the distributor became responsible for providing more material and filling more orders, all with the same speed and accuracy.

Although this influx of customers was good news for business growth, it also had an unexpected side effect: Customers who had been using the distributor for years found that their orders were being shipped later and later. These loyal customers became frustrated, and the number of complaints began to increase dramatically. The situation became so out of hand that one of the company's most valuable longtime customers threatened to take his business elsewhere.

The supply chain manager had to find a solution quickly. Although there was already a plan in the works for implementing a new WMS, that improvement would not be implemented for a few more months... so, it was a simple color coding solution that proved to save the day!

Putting the Solution Into Action

After identifying what "priority" meant to his business, the supply chain manager selected the top 25 customers who had spent the most money with them over the past two years (with their most recent order having been submitted within the last two months). When any of these customers' orders appeared on the computer screen, the pick list was printed on bright yellow paper. The material handlers were then instructed to always pick the yellow lists first.

After the new priority color coding and pick lists system was implemented, the warehouse efficiency drastically improved, and the number of complaints eased off. In fact, the customer who had threatened to go elsewhere was one of the first to remark on the turnaround.

This simple color coding and picking solution got this business through the bottleneck between the sudden increase in orders and the implementation of the new efficiency improvements. What might it do for you?