At some point, no matter how well managed the DC operations are, small inefficiencies begin to build-in. Left unchecked over time the accumulated affect degrades throughput capacity, lowers productivity, and reduces margin – all systematic of a operation in decline.
Holste Says... |
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| Companies that practice a continuous improvement strategy can expect their operations to perform at peak levels for an extended period. |
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Management can guard against this type of loss 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) or other peripheral operations should be ignored. However, they tend to be short-term operations which are closely supervised, whereas core operations are on-going and tend to be less scrutinized.
Based on interviews with industry experts and DC operations managers, we have assembled the following suggestion to help maintain peak performance:
- Doing SKU and activity profiling annually 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 spreadsheet-based warehouse inventory monitoring system 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 SCD 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.
DC system operations can and do become “sluggish” over time. While the above suggestions are not meant to be a cure all, companies that practice a continuous improvement strategy can expect their operations to perform at peak levels for an extended period.
Final Thoughts
Companies 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 outside independent industry professional perform an evaluation of core operations.
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