Logistics News: SCDigest, Warehouse Education and Research Council, Announce New Distribution Complexity Calculator
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Logistics News: SCDigest, Warehouse Education and Research Council,

Announce New Distribution Center Complexity Calculator™

 

 

Tool is Best of Its Kind to Help Companies Consider their Level of

Complexity and Potential Need for Technology Support

 

 

 

Aug. 1, 2012

How complex are your DC operations?

That isn't just an academic question. Often times the decision whether or not to invest in technology in a distribution center is based in part on its perceived complexity.

But how does a company know? Well, there is no perfect way, but in 2010 SCDigest and sister publication Distribution Digest released a beta version of an automated DC Complexity Calculator™, which calculated a score for DC complexity based on a number of factors.

We received about 200 submissions over the next few months. When we analyzed the data in aggregate, several observations arose. First, on the total score of 100 (maximum complexity) almost no company scored anywhere close to that. In fact, the average scores were coming in at about 55.

While at one level this made perfect sense - it would be extremely rare if not impossible for a company to score at the highest levels on all 20 or so attributes. But we also felt it could lead to some potential issues: executives might say "How can you tell me we have a complex distribution operation if you only scored 60 out of 100?"

So we made some minor adjustments in the scoring and questions. As a result, the ultimate score a DC received should seem more logical on a 100-point scale so that that will seem more like the "test grade" paradigm most of us natually relate too.

Second, we realized that there are two main aspects to DC complexity: (1) Scale complexity (how large the operation is, number of workers, etc.); and (2) Process complexity (how complicate a DC's processes are, for example lots of value added services and kitting, multiple handling units. etc.).

While our original calculator had attributes related to both dimensions, in this new version we have broken the questions and scores into distinct Scale, Process and then Total complexity scores, as shown in the graphic below.

 



This recognizes, for example, that a relatively smaller DC with fewer workers could still have very high process complexity and need for major technology support.

We also really wrestled with the reality that many DCs are complex because they are poorly run. We don't really have a good way to address that in this tool, and think that is more appropriate to be considered in a separate effort that looks more at best practices.

For this new DC Complexity Calculator™, we also decided to parter with the respected Warehouse Education and Research Council (WERC). Some of WERC's board members and leading general members provided us with some valuable feedback that we incorporated into this new version. The calculator itself is also available on both the SCDigest and WERC web sites.

Finally, the new calculator has a new and much improved user interface versus the spreadsheet-like approach we had previously that we are confident users will like.

Before using the calculator, a few important notes:

1. We encourage you to first read the Introduction and How to Use sections.

2. All individual company data will of course be kept totally confidential. Over time, we will be aggregating the data across all respondents and seeing if there is any insight in the numbers from across distribution centers. Maybe more importantly, as the data set builds, we will be able to give users a comparison of their scores across all respondents and respondents in their specific industries.

3. The first question asks if this is for a real DC, or whether the user is just "test driving" the tool. Please answer this question correctly. We are happy for test drivers or those just interested in looking at what we have done, but don't want to include that data in the analysis database. Please help us keep the data clean!

4. Remember, this is just one useful data point. Every situation is unique. But we are pretty sure this is the best effort to date that has been made to quantify DC complexity.

With that, you can find the link to the calculato here: SCDigest-WERC DC Complexity Calculator.

Finally, we do have a spreadhseet version of this. If you would like a copy of that to modify the attributes for your own use only, you can request one here: Request Spreadsheet Version of Calculator.

We are happy for any suggestions for improvement at the Feedback button below, which we will consider for a future version 2.0 of this tool.

 

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