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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

May 15, 2013

Finding Probable Cause May Be A DC Managers Biggest Challenge

DC Managers Can Relate to the "Fog-of-War" Syndrome?

Distribution centers are typically, busy, noisy and often chaotic environments to work in. DC managers are always on the lookout for problems (actual and perceived). They must be ready to make operational and/or systematic changes as may be required to “fix” a problem or satisfy new business requirement. One of the challenges they must overcome is similar to the so called “fog-of-war” syndrome that we often hear about from military leaders. Before any corrective action can be taken there must be a clear understanding of the issues.

For those who are tasked with making operational and/or systematic changes, the greatest challenge may be sorting out assumptions/presumptions from the actual cause and effect. After discussing this with several DC managers, the following situations were cited as examples:

The first example is a type of assumption that says the “suggested problem” such as: (a) inventory costs or (b) customer order response times, is technologically fixable.

Holste Says:

If you accept the presumption that the problem is in the packing operation as if it's a fact, you miss the opportunity for making broader improvements.
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Inventory costs, for example, might be caused by inflated (or inaccurate) sales projections. Or it could be there’s an unusually high rate of returns for certain items, and those returns aren’t calculated against projected inventory levels.


In the case of response times, if the company wants +95 percent of orders filled and shipped within 24 hours and it typically takes 18 to 20 hours just to get the order approved and downloaded to the DC, there’s not much you can do even with the most efficient order fulfillment system.

In these situations, all you can do is try to calmly point out opportunities for improvements in other upstream areas to make your DC operation more efficient. And, in fact, better communications between departments can lead to great improvements in efficiencies such as faster response times and more accurate sales forecasting.

The second example is a type of presumption where the suggested problem is understood as being the real problem. It’s this type of presumption that is most dangerous. It’s where presumptions are mistaken for facts.

Let’s say the presumption is that order fulfillment takes too long because the packing area is inefficient. Is this really the problem? If, say, you have six packing stations, each equipped with a hand-held scanner to verify the shipment, perhaps fixed-location or wearable scanners might improve operations by as much as 10 percent (depending on the number and type of items being packed).

But, could the process be improved more dramatically by scanning and verifying the shipment as it’s picked directly into the shipping container? In some applications, this could eliminate as much as 50 percent of the activity in packing and could significantly streamline order fulfillment. It might even allow you to assign some of your packers to picking.

If you accept the presumption that the problem is in the packing operation as if it’s a fact, you miss the opportunity for making broader improvements.

Take another example – “returns”, which in many companies can be a significant cost factor. Here the assumption/presumption might be that you need to streamline returns by allowing customers to use the Internet to generate return labels complete with bar codes. It’s true that scanning these bar codes can facilitate returning material to stock, adjusting inventory, or directing returns to an appropriate processing area in the case of defects or damage.

But, if that data isn’t available to be shared with Accounting, Sales and Marketing, it’s not being used completely or to its full potential benefit. Whether the data is shared upon receipt of the returned item or taken directly from the Internet depends on how the company operates. The point is - if you assume that the physical returns processing area is the only place you need to make improvements, you may be missing an opportunity to lower cost and improve service at all levels of the process.

Final Thoughts

The danger in the fog-of-war analogy is that by accepting assumptions and presumptions as fact it instantly narrows your vision and that can be costly. Working on solving surface issues, instead of the actual underlining problem, is akin to spinning your wheel – it will generate some heat and noise, but not much traction. But worse yet, it could lead to bad decision which could just exacerbate the situation.

Recent Feedback

Very astute Cliff, thank you. I run into this thought process quite often. The "I've seen this before so it has to be this" mentality instantly narrows focus and potentialy misses the root cause.

John Craig
Operations Manager
May, 20 2013