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Cliff Holste

Supply Chain Digest
Material Handling Editor

Logistics News - Sorting It Out

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.

February 14, 2018

Sorting It Out: Poor System Performance May Be the Accumulated Affect of Many Small Problems


Avoiding the ‘Death by 1,000 Cuts’ Syndrome

 

At some point in the evolution of the typical order fulfillment operation, no matter how well managed, small inefficiencies begin to creep-in. Like a thief in the night, they go unnoticed by busy managers, supervisors, and associates. Over time the accumulated affect degrades throughput capacity, lowers productivity and reduces margin. The idiom ‘death by a thousand cuts’ refers to anything that is a slow process in which a multitude of small, bad things happen which ultimately culminate in the demise of the operation.

 

Operations managers can guard against this type of tangential loss by keeping performance productivity records up-to-date and by implementing a continuous improvement program that is focused on core operations such as, Receiving, Putaway, Storage, Picking and Shipping. This is not to suggest that value added services (VAS) should be ignored. However, customer specific VAS is often a relatively short-term setup and closely supervised. Whereas, core operation are on-going and tend to be taken for granted.

 

Based on interviews with logistics executives and operations managers, we have assembled the following suggestion for preventing core operations from degrading:


Holste Says...

Shippers looking to improve their core operations should analyze which ones are in need of a tune-up and focus on those initially.

What do you say?

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  •  Do SKU and Activity profiling annually. This relatively simple operation can often show important changes in the business, and support improvements in layout, slotting, software configuration, and other processes.

  • If you are still using a manual inventory monitoring method, look hard at a plan to migrate to a Warehouse Management System (WMS). Deploying a WMS may be the single most important tool capable of providing measurable gains across all of the core operations.

  • Develop an in-house preventative maintenance program. Make sure that qualified maintenance personnel are available for all shifts and they can quickly respond to trouble spots. Electronic systems are available that can send out alert messages whenever a fault occurs.

  • Develop a comprehensive employee training program to allow for a more agile operation. By cross-training your employees in multiple disciplines, you will be better able to respond to peak throughput periods.

  • Make rapid customer order processing a top priority. Best-in-class operations fulfill and ship customer orders typically in less than 24 hrs.

  • Focus on enhancing visibility to support better communications up and down the supply chain. Provide a company-wide view of real-time performance data, such as: on-hand inventory levels; status of vendor backorder SKU’s; individual customer order shipping status; labor productivity status; etc. This can be accomplished by deploying a Warehouse Control System (WCS) that can be accessed via the internet.

  • Upgrade your current WMS if older than 5 years. Companies operating an older WMS often do not know what functionality they are missing out on that could drive improved throughput and productivity or enable more efficient support for seasonal fluctuations or customer demands for VAS.

  • Consider upgrading to Multi-Modal technologies (search Google and Supply Chain Digest for articles on this topic)

  • Evaluate emerging best practices for automation. Material handling providers are constantly introducing new technologies, system designs, equipment, controls and software that enhance the performance of DC core operations. You can learn about the new advancements by searching Supply Chain Digest for automation topics, and by attending industry related trade shows and conferences throughout the year.

  • Pay close attention to workplace safety issues. This will improve employee morale and productivity while lowering the cost of insurance premiums.

Final Thoughts

 

Shippers looking to improve their core operations should analyze which ones are in need of a tune-up and focus on those initially. However, given how scarce internal resources can be, it may be more expedient to have an independent industry professional perform an evaluation (audit) of core operations. However, first it would be a good idea to review two recent SCD articles: “Understanding the “Value” of the Distribution Center Audit” & “Guidelines For Achieving A Successful Audit”.


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