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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

April 17, 2013

Re-evaluation & Training Are Keys To Achieving Peak DC Performance

Processing Peak Volumes Requires Smooth Running Systems and a Well Trained Staff

Holste Says:

Many of them (DCs) are "making do" with material handling systems and order fulfillment processing methods that predate the E-commerce ordering explosion.
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For many retailers fourth quarter sales represents 50% or more of their total annual sales volume. If it doesn’t go well, and they don’t hit their numbers, it could spell doom for the business. This of course, puts a great deal of stress on supply chain logistics systems to respond. At the center of all this activity are the DCs. With just 6 months left before the start of the holiday selling/shipping season, an appropriate concern is how to improve performance over last year.

For some DCs, which have been forced to reduce their workforce and make do with the equipment and systems they have, peak periods may be more challenging than they normally would be. Many of them are “making do” with material handling systems and order fulfillment processing methods that predate the E-commerce ordering explosion.

As a result, many such companies are concerned as to how they can get through this year’s peak shipping season without disappointing customers or exhausting their already over stretched workforce.

Typically, companies hire additional temporary help to cover peak periods. Past experience combined with the current sales forecast provides the basis for determining how many temps will be needed. However, other factors can enter into the equation, such as; worker experience and job skills, language and/or communication issues, and whether or not they are, or can become, acclimated to the DC environment. Some will leave after receiving their first paycheck, while others will hang-on for a few weeks before dropping out. The turnover can be as high as 60% to 70%.

Training is Key to Having a Successful Peak Season

Given this high turnover rate for temps, training may seem like a waste of time. Still, the better trained they are, the fewer you will need.

The following are a few practical suggestions for hiring and training temps we collected from interviews with DC managers who are faced with this challenge every year:

  • People referred by current full-time employees generally make the best workers. Have an incentive program in-place to encourage participation.

  • Having a policy that offers opportunity for full-time employment for the best performers is a strong incentive. This is especially true given the on-going high unemployment rate.

  • Start the hiring process well ahead of the peak period. Since DC volume is relative low at that time (the quite before the storm), there can be some flexibility as to how labor is applied. Take some of those surplus hours to maximize training time.

  • Start by training the trainers. The ones who catch-on fast are your best resources for training others.

  • It’s a good idea to have a few bilingual trainers.

  • Quality checks on the temps are essential for weeding out problems and identifying any additional training needs.

  • Train on the simplest tasks first, but allow time to cross-train on tougher tasks. When things get crazy, you will need all-hands-on-deck, and you'll be glad you did!

  • Consider offering performance and attendance cash incentives for meeting and/or exceeding pre-established goals.

Additionally, you might try some of these functional ideas:

  • For the more complex tasks - staff with a team consisting of an experienced full-timer paired with a temp. The temp will get accustomed to doing the job quickly and safely.

  • Some processes, like gift-wrapping and personalizing, are in much heavier demand during the Holiday Season. Consider an assembly line approach with short, well-defined work processes. Be careful to keep the line balanced and smooth running. And, make sure that there are experienced full-timers in place for quality control.

  • Take advantage of the increase in single-line orders of very popular items. Wherever possible Pick & Pack these directly into shipping containers.

Final Thoughts

Workers that perform below standard during normal volume periods are a nuisance. However, during peak periods they can drag down the performance of the entire operation, idling down-stream workers, delaying shipments, and causing excessive overtime to complete the day’s work. But if the problem is systemic, replacing these workers will probably not improve performance.

There is still time to have an outside industry expert or consultant audit the basic order fulfillment and shipping operations and correct processes that are a drag on performance.

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