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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

March 20, 2013

When It Comes To Customer Satisfaction – There Is No Such Thing As Over Achieving!

A 99.9% Order Accuracy Rate Still Disappoints One Customer in a Hundred

Systematically increasing customer order processing accuracy and speed will net an immediate competitive advantage regardless of business conditions.

In the short-term companies can improve their performance by understanding that real improvement is a combination of deploying highly accurate order processing methods in addition to efficient management of the direct workforce and support personnel. By identifying and eliminating unnecessary processing steps, bottlenecks, and other such delays that may have crept-in over time, real gains can be realized.

Because perfection is worth striving for, consider what processes you need to put in place to hit 100% order accuracy on the first pass; no costly inspections or redo’s allowed.

Holste Says:

By identifying and eliminating unnecessary processing steps, bottlenecks, and other such delays that may have crept-in over time, real gains can be realized.
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While every DC is unique, many of the basic operations are very similar. The following are just a few interesting examples of how some of the top performing distributors create a competitive advantage:

  • Dock-to-stock time: Why not go for "gate-to-stock" time instead. Aim to reduce the total time that it takes to spot a trailer, unload the pallets or cartons and transport them to a storage location. Use the advanced shipping notice (ASN) data to setup the receiving process while the shipment is still in route.

  • Touches: Put up signs promoting "OHIO" – no not the state (Only Handle It Once). Why? Because it encourages one to ask, can we crossdock this receipt? Or, at a minimum, can we by-pass reserve storage and put it directly into the forward pick slot? In many DCs something like 30% to 50% of the labor is devoted to supporting picking operations – that’s adds up to a lot of overhead.

  • Space utilization versus productivity: In a typical DC warehouse, product occupies only 25% of the available building cubic space, even when its consider it to be full. The rest is aisles, dock space and otherwise unused air space. The key to understanding the relationship between space and productivity is to keep track of both over time.

  • Employee satisfaction: Top performing companies know that deploying efficient processes, along with some automation where practical, is important to the achievement of high levels of order fulfillment accuracy and productivity. But processes do not run by themselves. It takes trained and motivated employees to make them effective. Seek and adopt methods that can reduce training times to hours instead of days or even weeks? Create a work environment that is ergonomically, functionally, and socially friendly enough to keep costly turnover to a minimum?

What’s it Going To Cost?

This is the big question; how much can you spend to reach your improvement objectives? To some extent it will depend on business activity, cash flow, and future investment prospects. But regardless of the economic realities, start out small by going after the “low-hanging fruit”. Focus initially on improving customer satisfaction. By building a string of small, but high profile successes, chances of getting more complex projects approved that typically require a larger investment, will be more likely.

Individual projects may or may not provide an acceptable ROI on a standalone basis. However, if you could achieve all of your projects at one time, you might easily reduce DC labor by 20% while optimizing storage, increasing throughput capacity and customer order accuracy. Therefore, be sure to document the before and after metrics for each project.


How can you Increase your Chances of Success?

The following are a few suggestions from our readers and industry advisors:

  • Form a team of people who know your business well, but are not “wedded” to current processes.

  • Support the team with some outside expert resources who can stimulate your thinking and bring experience from other industries.

  • Get your team together for a few intense work sessions. Don't worry about being too ambitious. That's the whole idea.

  • Get management to challenge your recommendations. Be careful though – when realizing the full potential they may get excited and push for quick results.

Final Thoughts

Going forward companies must be able to quickly adjust to changes in their customers’ buying patterns and business strategies. Inefficient processes and systems can slowdown operations and inhibit the ability to quickly make appropriate changes - putting the business at some considerable risk. Avoiding this predicament is in most cases a matter of staying current with logistics technologies and slightly ahead of consumer trends – no easy tasks.


Recent Feedback

Useful tips , crisp and comprehensive. The best part would support to keep costly turnover at a minimum. Added to the fact that internal customer satisfaction would lead to total customer satisfaction as you had said. Customer satisfaction does not mean 99.9% but always there is room for improvement.

V Murali Kumar Nandiga
Head Logistics
Ksense Technology Pvt Ltd
Mar, 29 2013