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  First Thoughts

    Dan Gilmore


    Supply Chain Digest

May 5, 2017

Supply Chain Comment: Trip Report: WERC 2017

Summaries of the Best Presentations at this Year's Conference in Ft. Worth


I am just back from two good days at the annual conference of the Warehouse Education and Research Council (WERC) at the Ft. Worth convention center - the 40th such event.

If you haven't been, WERC is a boutique sort of conference, with 800 or so attendees, but with many of its members very passionate about WERC and its missions.

As the name implies, the event focuses on 4-wall distribution center matters like no other conference really does, but there are other subjects covered as well, such as a whole track dedicated to transportation issues.

You can find my video review - quite good, if I do say so myself - right here: WERC 2017 Video Review and Comment

Gilmore Says....

The evidence at Peckham and all the others that have gone down this path is that disabled workers have lower much rates of turnover and absences, can be just as productive and offer many other benefits.

What do you say?

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I'll start here with a presentation on "the power of one piece flow in distribution" - basically how Lean principles can be applied in the DC.

Speaker Jason Morin of XPO Logistics started off with an envelope folding exercise that showed the inefficiencies in many batch operations, well understood in manufacturing but less well so in distribution.

Morin then gave a number of real world examples about how this applies in the DC. For example, a company that batched the 4 or 5 steps required to receive and putaway a pallet. After incoming pallets from a shipment were staged, all say 10 of them would first be check in, then counted, then QA checked, etc. Turns out just as with envelop stuffing, doing all the needed steps to a pallet one at a time is much faster - and has the added advantage of making the first pallet available for putaway much quicker versus having to wait for all 10 to be fully processed.

Morin noted that just like in manufacturing, piles of WIP inventory are generally a sign there is opportunity, whether that is stacks of pre-built cartons in the VAS area or staging lanes on inbound docks packed with pallets.

He was less sure in applying Lean to picking operations - the area I have been most unclear on - and Morin said he had less experience here. This actually gets very complex, and can involve such competing theories as whether so-called waveless picking is better than wave-based order release, even though you might lose some travel time efficiencies from less order batching. But this presentation opened my eyes to some real DC opportunities with Lean thinking.

Next was a very interesting presentation on DC theft by Barry Brandman of NJ-based Danbee Investigations.

Theft is a huge and growing problem, he said, in part because the internet has made sales of stolen goods so much easier than in the past, when it had to be done locally. Now thieves have a global market to tap.

A number of examples were cited, including one DC worker who made $200,000 selling stolen goods that had original value of more like $800,000. That's big time.

Brandman said usual tactics such as guards, alarms, video cameras are in reality not very effective. Guards really can't do much, alarms are limited and not working right more often than not, and cameras are only effective if someone reviews the hundreds of hours of recordings each week - which of course no one does. Employees know this.

A big issue is collusion usually between drivers and employees inside the DC. Brandman also said there is a 10-80-10 rule. 10% of employees are honest and won't steal. 10% are bad guys actively looking for opportunities, and the vast preponderance - 80% - are not inclined to theft but can turn as circumstances develop.

For example, Brandman cited one example where 2-3 DC workers were aware another employee and a driver were committing theft. When this went on for months and management was doing nothing, those other employees began to wonder why they shouldn't get on this high money gravy train, and they indeed went over to the dark side.

What to do? A real security audit by someone that knows what he or she is doing is a good place to start, Brandman said, maybe with some self-interest but I think he is likely correct. If issues are suspected, undercover surveillance - including embedded fake employees - has often been successful. And you have to make it easy and anonymous - a key point - for employees to report illegal activity.

An overall so-so panel discussion on "taming the warehouse beast" suffered from a lack of focus and organization, but nevertheless it contained some worthwhile insights, a few of which I note below.

Catherine Cooper of consulting firm World Connections said that with the continued growth of temp workers in DCs, companies need to do a review and see how "temp friendly" their processes and systems really are - and if they do so will usually find there is a lot more that could be done to improve and speed temp on-boarding.

Norm Saenz of consulting firm St. Onge said the biggest trend he is seeing in distribution is use of put walls for ecommerce fulfillment. In these systems, pickers place goods on one side of a sort of cubby hole structure, guided by a light system, and then when individual orders are ready they are grabbed and processed by packers on the other side of the wall.

The advantage, Saenz says, are that this approach generally allows companies to use the same inventory for both ecommerce and regular replenishment orders.

Steve Henderson of C&S Wholesale Grocers said his company, like many others, develops a list of 15-20 logistics improvement projects for a coming year, and rank orders them in terms of impact. That's commonplace. What C&S does that may be a little different is to really analyze opportunity costs, sometimes leading it to add resources to project teams to get to the savings faster when the dollars are big.

Changing gears, WERC is to be commended for just about every year having a session on use of the disabled employees in DC operations, a trend that started with Randy Lewis of Walgreen's a number of years ago now, who really got this ball rolling on this. Companies such as Lowes, Kroger and Walmart have also developed programs.

This year was a presentation from a non-profit organization called Peckham, which perhaps surprisingly in part is in the 3PL business, running six DCs with some 1.4 million square feet of space. A high percent of its employees are those with disabilities, led by about 40% with psychiatric or emotional disabilities, but many others with various physical issues, learning disorders or more.

With that worker profile, Peckham's performance metrics are top notch, as described by DC manager Byron William. As with Walgreens and the others cited above, the disabled at Peckham don't get a break on performance standards.

The touchy subject, said Shavonne Singleton-Lewis of Peckham, are so-called "accommodations" that are required to assist disabled workers in being productive. The reality the vast majority of accommodations are low cost or free, such as just offering - when you can - some schedule flexibility.

The key, both presenters said, was simply working with each associate to understand what they need to be successful. And that admittedly is a different mindset than most companies have relative to DC workers.

But the evidence at Peckham and all the others that have gone down this path is that disabled workers have lower much rates of turnover and absences, can be just as productive and offer many other benefits. The biggest barrier here is fear of the unknown - take the step today, knowing all these companies will be happy to talk with you about their learnings.

John Morris of real estate firm Cushman & Wakefield gave a good presentation on trends in DC space, and of course it remains a very hot market. Morris made the interesting comment that only about 33% of site selection projects actually turn into an acquisition - build or buy - for a variety of reasons.

Cutting to the chase, Morris offered six common mistakes to avoid in site selection processes. Here are my favorite three: (1) Narrowing the search to just a few locations too early, before all the factors are well understood; (2) Moving forward in a search without enough detail into the desired site layout of the building; (3) Lack of consensus on the exec team on the project, which leads to delays, rework, and those cancellations cited above.

The annual DC metrics report was released as usual by Dr. Karl Manrodt and gang - we'll cover that shortly. Walmart is using "micro-learning" techniques - short, frequent on-line training events - to improve safety in the DC. Pepsico is using two technologies to get real-time insight on delivery activities and identify potential late arrivals early.

Good job by WERC CEO Michael Mikitka and team again this year.

Any reaction to Gilmore's WERC trip report? Let us know your thoughts at the Feedback button below

Your Comments/Feedback


Senior Consultant, Infosys
Posted on: May, 22 2016
Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.

Mike O'Brien

Senior editor, Access Intelligence
Posted on: May, 26 2016
Surprised to see Home Depot fall off the list; thought they were winning with Sync?

Julie Leonard

Marketing Director, Inovity
Posted on: Jun, 27 2016
Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.

Carsten Baumann

Strategic Alliance Manager, Schneider Electric
Posted on: Aug, 19 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.



Jo Ann Tudtud-Navalta

Materials Management Manager, Chong Hua Hospital, Cebu City, Philippines
Posted on: Aug, 21 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".

Sandy Montalbano

Consultant, Reshoring Initiative
Posted on: Aug, 24 2016
U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring.


Transportation Manager, N/A
Posted on: Aug, 30 2016
 Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!

Ian Jansen

Posted on: Sep, 14 2016
SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP.

I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day.

I've learned that one doesn't have to remind Germany about your EDI orders.

Don Benson

Partner, Warehouse Coach
Posted on: Sep, 15 2016
Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment 


Admin, Fulfillment Logistics UK Ltd
Posted on: Oct, 02 2016
Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.

Mike Dargis

President of asset-based carrier based in the Midwest, Zip Xpress Inc. (at
Posted on: Oct, 03 2016
Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at


Inventory Specialist, Syncron
Posted on: Nov, 16 2016
Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships.


Bob McIntyre

National Account Executive, DBK Concepts LLC
Posted on: Nov, 21 2016
This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network. 



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