Logistics News

By Cliff Holste

October 5, 2011

Logistics News: Improving Core DC Operations Is A Smart Investment

Continuous Improvement Is The Best Strategy For Growth In 2012

While every DC operation is different and unique, the functions of Receiving and Putaway, Storage and Retrieval, Picking and Shipping, are basic to all. It is therefore of the utmost importance that these operations be performed efficiently and flawlessly if the business is to be vibrant, competitive, and growth oriented. By continuously improving the performance of these core operations, companies can be confident that their dollars are being wisely invested.

The following is a list of “on-going” objectives for improving core operations:

• Increase inventory accuracy – this is at the top of the list with a goal of 100% accuracy.
• Increase inventory turns – elimination of outdated and slow moving SKUs.
• Improve order fulfillment accuracy – through the adoption of scanning and check-weighting methods.
• Improve throughput speed – through the elimination of bottlenecks and system congestion at merges.
• Improve ability to meet customer-specific requirements – adoption of flexible & adaptable processes.

Holste Says: It's likely that a combination of small improvements to core functions will quickly yield overall system benefits without the risk of setting off a domino effect that can escalate in a more complex project. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

DCs that are picking and shipping 10,000 or more cases per day should consider having an outside firm, or independent industry expert, perform an evaluation/audit/assessment every 2 to 3 years. At this volume and above even small inefficiencies, that may go unnoticed by supervisors and associates can reduce throughput and productivity. Of course, the value received from any evaluation depends on whether or not the company is prepared and ready to make the needed changes.

Regardless of whether utilizing independent outside or internal resource, the company should be prepared with data, growth projections, metrics, and examples of what has changed. In other words – you need to have an idea of “what’s wrong and what needs improving” (see – “Are Audits, Assessments & Evaluations Just an Intellectual Exercise?”).

Ideas That Will Improve Performance of Core Operations

Based on interviews with DC managers and executives, the following are ideas and/or places to look for continuous improvement:

Final Thoughts

Companies looking to improve their core operations should analyze which ones are in need of a tune-up and focus on those initially. Given the uncertainties (risks and challenges) associated with the current marketplace, it’s likely that a combination of small improvements to core functions will quickly yield overall system benefits without the risk of setting off a domino effect that can escalate in a more complex project.