Expert Insight: Guest Contribution
  By Susan Rider, President, Ryder & Associates  
  May 17 , 2007  

The Top 10 Must Do’s for Logistics Operational Excellence


Is Operational Excellence an Illusive Dream?  Here are Ten Steps that will help you Achieve this Goal without Spending a Lot of Money

Rider Says:
Whether you like it or not, you are in the people business, which is sometimes the most challenging aspect of operations.

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Everyone wants to improve operations, but most companies have multiple areas for improvement. Here are 10 areas to consider, most of which require little investment other than time and focus.

1. Improve Communication

Supply chain communication across your network can make the difference on whether you achieve a good result or bad. Consider these two examples:  

Example 1: Merchandising takes advantage of an opportunity buy and purchases two truck loads of a supposedly hot toy for the fall. But Merchandising forgets to communicate the delivery of this SKU, which will be six months in advance of the season. This particular SKU requires substantial space in the distribution center. The result: a last minute reaction by operations requiring substantial overtime. This lack of communication added cost and turbulence in the day-to-day operation that could have been avoided.

Today, there are still many times operational silos that promote lack of communication and create efficient processes.

Example 2: In a less than full case order picking module, the order pickers are constantly waiting for product, causing lost productivity. The replenishers have been traditionally trained by a Standard Operating Procedure (SOP).  The associate starts at the first of an aisle and works their way down. If there was communication to the replenishers that 20% of the stock is responsible for 80% of the movement, they could then start replenishing the faster moving products first, reducing the order filler “no stock” situation dramatically. How is your stock report communicated?

2. Invest More in Training

Another common problem is under investment in the amount and quality of training. The typical large distribution center has 40% turnover rate per year. Depending on geographic location it could be more. A good training program is essential and could increase productivity 10-20%. Why? Training and validation of training assures that all associates understand the “steps for success”.

Training and training aids are critical and should be developed by a person that deeply understands the process, not by a Human Resource person that would flunk a validation because they just read out of the manual and truly don’t understand the process.

Training materials are sometimes furnished by the software vendor or material handling equipment vendor. Be aware that these are rarely if ever sufficient. A customized training program should blend your operational processes with the vendor’s generic features. This training should be done at least every six months and a validation test of the training given to each participant to ensure that the main points are learned. Remember that different people learn in different ways and that typically there needs to be an average of six repetitions for training to be fully absorbed.

3. Understand your Operation In-Depth

To really understand your operation, start with process flow mapping. This will initially require a lot of time, but once built it is then comparatively easy to maintain over time. 

Once you have your process map flow the next step is to audit the process. Are these steps actually occurring in the warehouse? Have the associates created work arounds? If so, is the new process better and should your current process be changed?

Now look at each component. Is there a new and efficient way of accomplishing this task? How can you reduce walk time or touches out of each component? Would an investment in new material handling equipment or software reap big returns in any step?

Next, map the processes to key performance indicators (KPIs). Evaluate your metrics compared to others in like industries. What gets measured gets improved!

Looking into the future how would you need to re-engineer to make breakthrough improvements (double volumes, double productivity, etc.)

4. Recognize that You are in the “People Business”

Whether you like it or not, you are in the people business, which is sometimes the most challenging aspect of operations. If you hire well and you create a culture of passionate teams, your company and logistics operations can excel.

People spend a good portion of their lives at their jobs. They are either engaged and enjoy what they do, or they hate going to work everyday.  Treat your associates fairly and with respect. Affirm positive actions and you will reap big results.  Affirmation is low hanging fruit and should be a process that is spread among the entire management team. It doesn’t cost much, but unfortunately most companies don’t understand the inherent value. Sam Walton was a person that understood passion. Before each shift he led a cheer. His goal was to create a team of passionate individuals that had a common goal. Know the associates names and reward good performance.  Celebrate success!

Realize that your people are responsible for your success or failure and will often times support a great leader in the toughest times. Be a servant leader with a horizontal team that supports and defends each other.

When you get those “A” players in any level of your organization develop a plan to keep them and grow them for a succession of all stars.

Assure you have clarity of expectations. Failure is not always an individuals fault but the failure of a manager to clearly state the expectations and the reason for the expectation.

5. Focus on Internal Customer Service

Many think when we talk about customer service we are only talking about external customers. Every department needs to know who their customer is and communicate with them. Understand their needs, and how these support teams you can help improve productivity. For instance, IT, Maintenance, Human Resources are suppliers to Operations. If IT doesn’t support with good systems or a fault tolerance plan, operations will fail. If maintenance doesn’t maintain a sorter and it goes down, Operations fails.

Order pickers support shipping. If order pickers do not finish a wave on time, shipping is back logged. You get the picture. Develop a team of Customer Service “Pros” and you will increase productivity without adding cost.

6. Really Drill Down on Order Fulfillment Processes

How can you increase throughput or reduce head count? First, know what you do today by mapping your processes, as discussed above. Second, identify the methodology of your picking processes, i.e., strict packing, serpentine, cluster, etc. Is there a better way? Third, do an analysis of your storage media (shelving, carton flow rack, push back rack, a frame, etc). Can you increase productivity by upgrading? Is the area slotted optimally? Fourth, would technology enhance the process? What new technologies or trends have been introduced or has the cost been lowered on a previously evaluated technology?

7. Remove the Barriers to Success.

Would a company fail to remove barriers to success? Yes. This is actually a common problem. Many times the “C Level” executives are not aware that these barriers exist.  Your associates know these barriers and can easily verbalize if asked. Listen to them. They do the job eight hours a day. They know what is keeping them from performing the job efficiently.

Below are examples of simple barriers that caused big productivity losses:

  • Broken $150 printer in supervisor’s station. Supervisor was copying screen to paper.
  • No batteries for RF. The IT control freak insisted on keeping extra batteries in his office which was very far away.
  • Associates tools weren’t organized well, creating a 30 minute search at the beginning of each shift.
  • First shift didn’t set up second shift for success and vise versa.

8. Continually Raise the Bar

Challenge every department on every team to find better processes and reduction of non-value steps.  Below is an example of how raising the bar increased productivity in a break pack (less than full case) module:

A music distribution company set its standards at 400 order lines per hour. In some high density zones, it was possible to double that rate, but because the overall target was 400, order pickers slowed down. We resolved this situation by changing the rates possible by zone. Overall, it created a 30% plus increase in productivity without any investment of hardware or software. 

9. Take Advantage of Fresh Eyes!

There are consultants in the world for a reason and the right ones can add real value. One client said “We don’t know what we don’t know”. Everyday you get used to the “we’ve always done it that way”. It is hard to look outside the four walls and see other beneficial changes. You take your body, your car, your lawn mower for check ups. Why not your distribution center? Have an operation audit done by an outside consultant.

You want one that knows really knows practical operations. I often talk with companies that weren’t satisfied with a consultant engagement, and frequently it is because they hired someone whose expertise was not within the scope of the project.

Identify trusted advisors that you can use in your distribution network.

10. Stop Paving over Cow Paths!

Often, when a distribution center makes a change (new conveyor, new storage rack, new software, etc.) they focus the project on their old processes instead of reviewing new and improved ways of accomplishing a task.  This happens all the time and is especially common with acquiring and implementing new software. 

Benchmark your distribution center with others in your industry or with others that have similar operational flows. Share ideas through local association meetings or roundtables.

Constantly evaluate new technologies, new trends, and stay aware of what is going on in the field by reading publications about your industry or new tools and solutions for problem areas.

Don’t be stuck in the “we’ve always done it that way” mud. 

If it hasn’t already become apparent, operational excellence doesn’t require a lot of money! Just practical steps for success and a commitment!


Susan Rider currently has her own consulting firm specializing in Supply Chain, Operations and Marketing Consulting after a long career as an executive in the supply chain software industry.  Susan has been in this industry for over 15 years and is Past-President of WERC after serving on the board over 8 years. She also serves on the Editorial Advisory Board for Modern Material Handling, Distribution Center Management and University of Louisville Logistics School. Susan speaks frequently across the country on Logistics and Supply Chain issues.


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