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Rider Says:
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Whether
you like it or not, you
are in the people business,
which is sometimes the
most challenging aspect
of operations.
What
do you say? Send
us your comments here
|
Everyone
wants to improve operations,
but most companies have multiple
areas for improvement. Here
are 10 areas to consider, most
of which require little investment
other than time and focus.
1.
Improve Communication
Supply
chain communication across your
network can make the difference
on whether you achieve a good
result or bad. Consider these
two examples:
Example
1: Merchandising takes advantage
of an opportunity buy and purchases
two truck loads of a supposedly
hot toy for the fall. But Merchandising
forgets to communicate the delivery
of this SKU, which will be six
months in advance of the season.
This particular SKU requires
substantial space in the distribution
center. The result: a last minute
reaction by operations requiring
substantial overtime. This lack
of communication added cost
and turbulence in the day-to-day
operation that could have been
avoided.
Today,
there are still many times operational
silos that promote lack of communication
and create efficient processes.
Example
2: In a less than full case
order picking module, the order
pickers are constantly waiting
for product, causing lost productivity.
The replenishers have been traditionally
trained by a Standard Operating
Procedure (SOP). The associate
starts at the first of an aisle
and works their way down. If
there was communication to the
replenishers that 20% of the
stock is responsible for 80%
of the movement, they could
then start replenishing the
faster moving products first,
reducing the order filler “no
stock” situation dramatically.
How is your stock report communicated?
2.
Invest More in Training
Another
common problem is under investment
in the amount and quality of
training. The typical large
distribution center has 40%
turnover rate per year. Depending
on geographic location it could
be more. A good training program
is essential and could increase
productivity 10-20%. Why? Training
and validation of training assures
that all associates understand
the “steps for success”.
Training
and training aids are critical
and should be developed by a
person that deeply understands
the process, not by a Human
Resource person that would flunk
a validation because they just
read out of the manual and truly
don’t understand the process.
Training
materials are sometimes furnished
by the software vendor or material
handling equipment vendor. Be
aware that these are rarely
if ever sufficient. A customized
training program should blend
your operational processes with
the vendor’s generic features.
This training should be done
at least every six months and
a validation test of the training
given to each participant to
ensure that the main points
are learned. Remember that different
people learn in different ways
and that typically there needs
to be an average of six repetitions
for training to be fully absorbed.
3.
Understand your Operation
In-Depth
To
really understand your operation,
start with process flow mapping.
This will initially require
a lot of time, but once built
it is then comparatively easy
to maintain over time.
Once
you have your process map flow
the next step is to audit the
process. Are these steps actually
occurring in the warehouse?
Have the associates created
work arounds? If so, is the
new process better and should
your current process be changed?
Now
look at each component. Is there
a new and efficient way of accomplishing
this task? How can you reduce
walk time or touches out of
each component? Would an investment
in new material handling equipment
or software reap big returns
in any step?
Next,
map the processes to key performance
indicators (KPIs). Evaluate
your metrics compared to others
in like industries. What gets
measured gets improved!
Looking
into the future how would you
need to re-engineer to make
breakthrough improvements (double
volumes, double productivity,
etc.)
4.
Recognize that You are in the
“People Business”
Whether
you like it or not, you are
in the people business, which
is sometimes the most challenging
aspect of operations.
If you hire well and you create
a culture of passionate teams,
your company and logistics operations
can excel.
People
spend a good portion of their
lives at their jobs. They are
either engaged and enjoy what
they do, or they hate going
to work everyday. Treat
your associates fairly and with
respect. Affirm positive actions
and you will reap big results.
Affirmation is low hanging fruit
and should be a process that
is spread among the entire management
team. It doesn’t cost
much, but unfortunately most
companies don’t understand
the inherent value. Sam Walton
was a person that understood
passion. Before each shift he
led a cheer. His goal was to
create a team of passionate
individuals that had a common
goal. Know the associates names
and reward good performance.
Celebrate success!
Realize
that your people are responsible
for your success or failure
and will often times support
a great leader in the toughest
times. Be a servant leader with
a horizontal team that supports
and defends each other.
When
you get those “A”
players in any level of your
organization develop a plan
to keep them and grow them for
a succession of all stars.
Assure
you have clarity of expectations.
Failure is not always an individuals
fault but the failure of a manager
to clearly state the expectations
and the reason for the expectation.
5.
Focus on Internal Customer Service
Many
think when we talk about customer
service we are only talking
about external customers. Every
department needs to know who
their customer is and communicate
with them. Understand their
needs, and how these support
teams you can help improve productivity.
For instance, IT, Maintenance,
Human Resources are suppliers
to Operations. If IT doesn’t
support with good systems or
a fault tolerance plan, operations
will fail. If maintenance doesn’t
maintain a sorter and it goes
down, Operations fails.
Order
pickers support shipping. If
order pickers do not finish
a wave on time, shipping is
back logged. You get the picture.
Develop a team of Customer Service
“Pros” and you will
increase productivity without
adding cost.
6.
Really Drill Down on Order Fulfillment
Processes
How
can you increase throughput
or reduce head count? First,
know what you do today by mapping
your processes, as discussed
above. Second, identify the
methodology of your picking
processes, i.e., strict packing,
serpentine, cluster, etc. Is
there a better way? Third, do
an analysis of your storage
media (shelving, carton flow
rack, push back rack, a frame,
etc). Can you increase productivity
by upgrading? Is the area slotted
optimally? Fourth, would technology
enhance the process? What new
technologies or trends have
been introduced or has the cost
been lowered on a previously
evaluated technology?
7.
Remove the Barriers to Success.
Would
a company fail to remove barriers
to success? Yes. This is actually
a common problem. Many times
the “C Level” executives
are not aware that these barriers
exist. Your associates
know these barriers and can
easily verbalize if asked. Listen
to them. They do the job eight
hours a day. They know what
is keeping them from performing
the job efficiently.
Below
are examples of simple barriers
that caused big productivity
losses:
8.
Continually Raise the Bar
Challenge
every department on every team
to find better processes and
reduction of non-value steps.
Below is an example of how raising
the bar increased productivity
in a break pack (less than full
case) module:
A
music distribution company set
its standards at 400 order lines
per hour. In some high density
zones, it was possible to double
that rate, but because the overall
target was 400, order pickers
slowed down. We resolved this
situation by changing the rates
possible by zone. Overall, it
created a 30% plus increase
in productivity without any
investment of hardware or software.
9.
Take Advantage of Fresh Eyes!
There
are consultants in the world
for a reason and the right ones
can add real value. One client
said “We don’t know
what we don’t know”.
Everyday you get used to the
“we’ve always done
it that way”. It is hard
to look outside the four walls
and see other beneficial changes.
You take your body, your car,
your lawn mower for check ups.
Why not your distribution center?
Have an operation audit done
by an outside consultant.
You
want one that knows really knows
practical operations. I often
talk with companies that weren’t
satisfied with a consultant
engagement, and frequently it
is because they hired someone
whose expertise was not within
the scope of the project.
Identify
trusted advisors that you can
use in your distribution network.
10.
Stop Paving over Cow Paths!
Often,
when a distribution center makes
a change (new conveyor, new
storage rack, new software,
etc.) they focus the project
on their old processes instead
of reviewing new and improved
ways of accomplishing a task.
This happens all the time and
is especially common with acquiring
and implementing new software.
Benchmark
your distribution center with
others in your industry or with
others that have similar operational
flows. Share ideas through local
association meetings or roundtables.
Constantly
evaluate new technologies, new
trends, and stay aware of what
is going on in the field by
reading publications about your
industry or new tools and solutions
for problem areas.
Don’t
be stuck in the “we’ve
always done it that way”
mud.
If
it hasn’t already become
apparent, operational excellence
doesn’t require a lot
of money! Just practical steps
for success and a commitment!
Susan
Rider
currently has her own consulting
firm specializing in Supply
Chain, Operations and Marketing
Consulting after a long career
as an executive in the supply
chain software industry. Susan
has been in this industry for
over 15 years and is Past-President
of WERC after serving on the
board over 8 years. She also
serves on the Editorial Advisory
Board for Modern Material Handling,
Distribution
Center
Management and University
of Louisville
Logistics School.
Susan speaks frequently across
the country on Logistics and
Supply Chain issues.
Agree
or disgree with our expert's
perspective? What would you
add? Let us know your thoughts
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