Leveraging "Teach"nology: Improving DC Productivity through Personnel Observation & Coaching

By: Brian Ehlenberg

As a supply chain systems implementation professional, I know the value of applying the right technology to increase efficiency.  However, I also know how common it is for companies to overlook or under-utilize their workforce in the quest to make their operations more productive. Given how pervasive technology is throughout supply chain operations, we sometimes forget that people are often the source of untapped savings. We tend to forget that taking the time to improve our people, leveraging our “teach”nology, can create significant gains with little capital expenditure.

Recently, one of my clients in the foodservice business reaped strong rewards with a “low-tech, high-teach” initiative. Faced with an underperforming distribution center, the client brought in a new DC management team, giving them a clear mandate for improvement and an 18-month timeline for accomplishing it.

The new management team immediately installed an observation and coaching program whereby the supervisors conducted two coaching observations, and a follow-up interview, every day with each associate.  By the 18-month deadline, with no changes to the DC processes, material handling, information technology or layout, the facility achieved a 40% productivity improvement. The only change implemented by the new management was a regimen of disciplined and regular observation, coaching and follow-up. As a result, the operation rose from the bottom of the DC network productivity scale to the top five. With their gains solidified, management was able to reduce the coaching sessions to one per day while maintaining their improved productivity.

What does it take to implement an observation and coaching program that “sticks”?

The first key is for your coaching supervisor to take the time to fully understand the “best practice” for the process being reviewed. It’s important for the coach to observe the process on the floor, in the associate’s work environment, preferably during peak activity.  Flow charts and whiteboards don’t cut it for truly understanding the process. As important, all work should be observed for at least a complete cycle.  If the cycle times are short, it’s helpful to observe multiple cycles.

Along with truly understanding the process, the coach must be able to effectively communicate deviations from best practice in a positive manner. The best way to accomplish this communication is through a review session off the floor, immediately following the observation. This session should be conducted privately in a quiet setting with no distractions. Done properly, the review should take no more than 15 minutes. For optimal results, the coach should begin by pointing out one or two positive behaviors he/she witnessed during the observation. Next the coach can point out any gaps in the process best-practice, along with any suggestions for improvements. Finally, the associate should be given the opportunity to provide feedback and make recommendations for any process or environment changes that may help him/her improve performance. Be sure to provide the associate with a copy of the feedback report for future reference.

Without question a properly executed observation and coaching program requires a significant investment of time, but this commitment will pay off in associate and DC performance improvements.  And as a side benefit, you will likely see more effective communication – and a stronger working relationship - between your associates and supervisors.

What’s Next for SaaS and On-Premise TMS Providers

By: John Blanchard, Vice President of Transportation

SaaS TMS solutions have reached the point of sustainable viability in recent years.  In fact, an argument could be made that sales of SaaS solutions have been propping up the Transportation Management System market in general. As we support our clients in the evaluation and selection of TMS solutions, we no longer see strong bias against SaaS solutions. Rather, it is increasingly common to hear things like “we don’t really have a preference” or “we just want the best TMS for our business”. The application delivery model has now become secondary to features, functions and value. To gauge the impact of SaaS technology, consider the efforts and investment of the Tier 1, traditionally on-premise TMS vendors to provide SaaS options for their customers.
When it comes to a SaaS deployment, the “pure” SaaS players enjoy an architectural head start over the traditional on-premise vendors that designed their solutions to be primarily single tenant. While it could be argued that, for some industries and functional requirements, the legacy on-premise solutions have advantages in breadth and depth of functionality, which gap is easier the close: technology or functionality? In my opinion, it’s the functionality gap.
As hardware and internet bandwidth become more powerful, inexpensive and ubiquitous, functionality like complex optimization is no longer as difficult for SaaS vendors to support.  These vendors are focused on closing the functionality/flexibility gap and are steadily broadening and deepening their offerings.  There are no inherent limitations to their ability to develop and implement deeper functionality. The most daunting challenge the SaaS providers face is maintaining the multi-tenant, single instance concept that underlies the collaborative potential of their solutions.
Traditionally on-premise solutions, on the other hand, face challenges when it comes to developing true SaaS solutions.  In many cases their solution architecture was originally developed without consideration for SaaS needs.  This often means that the core code and database is not optimized for true SaaS performance and relies heavily on local processing and large, dedicated hardware stacks.  Revamping the fundamental data structures, communication protocols, APIs and other key components is an additional hurdle that pure SaaS vendors do not have to clear.
The great news for the TMS buyer is that this fervent competition of ideas will ultimately result in solutions that combine the best of both worlds, providing real options and strategic flexibility.

Parcel Manifesting: To Pre or Not To Pre?

By: Wendy Groff, Senior Associate.

As your customers place smaller, more frequent orders, your small parcel volume is going up. How do you handle this volume efficiently and accurately? A good place to start is to determine when to manifest: before or after picking? In today’s blog we review the pros and cons of these alternatives.

Pre-Manifesting 

Pre-Manifesting means printing order-specific documents (packing lists, labels, etc.) prior to releasing the order for picking.  These documents may print at the time of allocation or when a picker requests work. Pre-Manifesting is typically used when item dimensions are accurate and an optimal pick and pack flow can be designed to enable the picker to retrieve packing materials and documentation. Pre-Manifesting is usually not a good idea when heavy post-picking activity is required, such as repacking, inspection or special handling.

To successfully implement Pre-Manifesting, you must consider several factors.  If printed at the time of allocation who will manage the collating of documents and assure timely delivery to the floor?  If documents are printed when the picker requests work, do you have enough printers available on the floor? Are the printers located properly?  Can picking containers and packaging be stored in a convenient location?

Pros:

• More efficient throughput
• No double handling
• Elimination of pack stations
• Resource cost reduction

Cons:

• Paperwork management
• Possible additional hardware cost
• Order accuracy may be impacted
• Labor impact on picker
• Paperwork must be reprinted in the event of pick shortages or box size substitution
• Doesn’t work well for export orders because some key information, e.g., Country of Origin, may not be known prior to picking

Post-Manifesting 

Post-Manifesting involves completing the packing and manifesting steps after an order is picked.  This option is generally used in distribution environments where item dimensions are non-existent or inaccurate, or where there is significant post-picking activity required (repackaging, order consolidation, inspection, frequent order changes, etc.) that is problematic for a picker to perform.

Successfully implementing Post-Manifesting requires reviewing your picking requirements and facility layout.  Some key questions to ask: What types of pack stations will I require (pack only, inspection, labeling, etc.)?  For each pack station type, what percent of my product will need to flow through the station?  How many stations will I need for each pack type based on average pack rate? What is the appropriate sizing and placement of each pack station?  Can I minimize packer handling through the use of automation such as an in-line scale, print & apply system, conveyor, etc.?

Pros:

• Accurate item dimensions
• Improved picking and order accuracy
• Reduced picking time
• Allows for inclusion of inserts post-picking
• Facilitates serial number capture when picking higher quantities

Cons:

• Additional labor cost
• Packing station space requirement
• Additional pack station costs

Pre- and Post-manifesting are not mutually exclusive, of course. For instance, Pre-Manifesting may be used in areas where product is stored in shippable containers while Post-Manifesting is used throughout the remainder of the warehouse. Regardless of the direction you choose, the first step is to review the trade-offs of each option carefully to make an informed decision on which option is best for your operations.

Need help implementing a parcel manifesting system? Contact us at (201) 940-7311.

Taking Control of Inbound Transportation: Change You Can Take to the Bank

By: John Blanchard

Freight costs appear to be on a never-ending upward trend.  Manufacturers, retailers, wholesalers, 3PLs and just about everyone else is feeling the negative effects of rising logistics costs.  But while most companies recognize the importance of optimizing outbound freight spend, many shippers are falling short when it comes to driving costs out of their inbound transportation.

Depending on the industry and business model, up to 35% of transportation costs are associated with inbound freight. Taking control of your inbound transportation can have a significant impact on supply chain costs.  Why aren’t more companies owning and optimizing their inbound freight? For some firms, the obstacles to moving from prepaid to collect appear daunting:

• Uncertainty around the product and transportation buying power needed to successfully make changes.
• Lack of support within the Transportation department.
• Entrenched Purchasing or Procurement departments that are unwilling to unbundle product and freight costs.
• Lack of a clear business case outlining the business case for an inbound transportation initiative.
• A physical logistics network that isn’t optimally configured to take advantage of inbound opportunities.
• Potential change to your core transportation providers.
• Lack of systems designed to support planning and execution of sometimes complex moves like backhauls, continuous moves or consolidation.

While there’s no doubt that taking control of inbound transportation brings complexity and risk, the path to realizing the potential cost savings can be cleared through inter-departmental communication of the opportunity / business case as well as carefully considered change management. Here are a few tips for successfully managing the cross-functional change required:

• Initiate dialogue with your counterparts in Purchasing and Merchandising to find out if you have willing partners. 
• Work collaboratively with all stakeholders and executives to understand what could be in it for them, creating an incentive to participate.
• Leverage corporate-wide initiatives to reduce costs.
• Develop an air-tight business case highlighting potential savings and the detailed changes needed to realize them.
• Take the time to understand the dynamics among key internal players and constituencies.
• Craft a communication plan to support the project and leverage it consistently.
• Consider best practices in change management as well as inbound conversion.
• Fully understand all foundational requirements like technology before attempting a complex inbound conversion.

By taking a cross-company approach, clearly articulating the business case, and carefully managing change, your company can realize reduced inbound transportation costs and gain a competitive advantage.

Need help with inbound transportation planning? Contact us! (201) 940-7311.

5 Ways to Improve Order Picking Productivity

By Marc Wulfraat, President, MWPVL

Challenge: Doing more with less in a distribution operation by improving order picking productivity.

Sound familiar? In the face of flat or declining growth rates, the pressure is on for companies to reduce operating expenses to protect margins. Supply chain executives are faced with the challenge of reducing labor costs, but at the same time, customers are placing more orders with smaller quantities. Customers are also under pressure to lower costs by reducing inventory levels and this translates into more cost to serve for your business.

Thus the business challenge is how to do more with less within the distribution operation. To this end, there are usually opportunities to increase efficiency depending on a company's starting point. Since 50+% of warehouse labor resources are typically involved in picking, packing and shipping outbound orders, it usually makes sense to focus on these operations first. Now may be the time to revisit some basic first principles to maximizing warehouse efficiency. With this entry, we focus on 5 ways to improve picking operations.

1.       Mixing multiple SKUs in the same bin location reduces picking productivity. We have done time and motion studies that prove that there is a definite time penalty associated to mixing multiple SKUs into the same bin location. We see this in many warehouses where a bin location may represent a shelf level that contains 5 - 10 SKU pick facings. The operator is directed to the shelf level and then needs to search through the different SKUs to find the item to be picked. Not only does this reduce accuracy, it also slows the operator down by as much as 15+ seconds per pick transaction. Having a discrete pick location for every SKU is rule #1.

2.       Reducing travel time improves order picking productivity. This is why batch and cluster order picking strategies are used in warehouses. It is also why some companies invest into conveyor systems. Travel time can easily account for 50% or more of order picking hours. By combining orders into a single travel instance the time spent travelling is greatly reduced. The smaller the order, the better the opportunity to combine multiple orders into a single travel instance.

3.       Conventional order picking productivity improves when it is at ground level. The statement that it costs more to pick vertically than it does to pick horizontally is a generally accepted principle that has been demonstrated through benchmarking efforts over the years. The reality is that some companies lack the real estate at ground level to provide pick facings for all SKUs hence they need to pick vertically like it or not. Parts distribution centers are typical of this situation. In these cases, assign the slowest velocity items to be picked from vertical locations and the keep the fastest velocity items at floor level to minimize the penalty associated with vertical picking.

4.       Order picking productivity improves with "hit" density. If an operator picks from one out of every 100 pick locations then this will be slower than if the operator picks from one out of every 10 pick locations. Higher pick density = higher pick productivity. Thus it may make sense to set up hot zones in the warehouse to concentrate the SKUs that generate the majority of picking activity. Some warehouse operations have ABC velocity definitions so that the fastest moving "A" SKUs are positioned together within designated wider operating aisles to reduce congestion. By increasing the pick density of the "A" items, travel time is reduced and the opportunity to speed up the picking process is greatly improved.

5.       Warehouse efficiency is improved when items are assigned to the correct storage media. Imagine if all operators have wet paint on their hands, then the optimized warehouse has the minimal number of finger prints on the boxes. Each set of finger prints costs money. Taking finger prints off the boxes means the warehouse has been set up to minimize product handling. The first basic principle to be adhered to is that items should be stored in the appropriate storage media. Having slow moving SKUs in pallet racks may be as wasteful as having fast moving SKUs in shelving bins. We make this decision based on a variable called cube movement velocity which measures the volume of movement for each SKU. The cube movement velocity = movement in units x cubic dimensions of the unit. Measuring this metric for every SKU provides an important way to ensure that products are being handled within the most appropriate storage media. High cube movement belongs in racking and low cube movement can be assigned to smaller storage media formats.

Need help with order picking productivity or warehousing management? Contact us today! (201) 940-7311

What Do All Successful Labor Management System Implementations Have in Common?

By: Brian Ehlenberg

Perhaps the hottest application right now in the world of Supply Chain Execution software is Labor Management, aka Workforce Management. When combined with accurate Engineered Labor Standards, these tools can drive strong ROI through significant productivity improvements. The irony is that while demand for LMS is strong, the primary reasons why these projects succeed or fail are commonly overlooked.

Many organizations fall into the trap of thinking that a LMS will provide a significant increase in productivity by simply installing the software and having it manage operator performance.  The reality is a labor management system doesn't manage your labor force – you do. In fact, the very name of these solutions is misleading. A more accurate term would be “Management Enablement Solution.”

LMS projects have three main components: Software, Engineered Labor Standards, and Operator/Management Interaction. What do all highly successful LMS implementations have in common? Answer: the operator/management interaction is the foundation of the project.

How do companies create strong operator/management interaction?

1. Clearly establish the project goals at the beginning of the project, letting the operators know why the project is important and how it will proceed.
2. Involve operators in defining and documenting the optimal process (“Preferred Method”, “Best Practice”) for each task.  The operators have the most experience with the tasks, providing invaluable “real-world” perspective.
3. Invest in training supervisors in the skill and art of coaching and mentoring operators to use the Best Practices. A Supervisor should be trained to think of himself/herself as the coach of an “industrial athlete”. Supervisors should observe the operator completing a task and then provide constructive and positive feedback on opportunities to improve.
4. Establish periodic Best Practice observation for every operator and make this session part of each supervisor’s daily/weekly routine.  Coaching and mentoring observations should be part of the supervisor’s interaction with all operators, not just with those failing to meet expectations.
5. Establish an accountability plan that includes the corrective actions required when an operator fails to meet daily or weekly expectations.  This plan establishes the requirements for follow-up observations, mandatory re-training and, eventually, disciplinary action.

All successful LMS projects have incorporated the above key elements. Projects that fail either do not clearly define the goals at the onset of the project, do not involve the operators, overestimate the supervisors’ coaching and mentoring skills, or do not provide a consistent positive feedback mechanism for management to use with the operators.

Remember it’s not really a Labor Management System – it’s a Management Enablement System.

In our next blog we’ll take a closer look at the make-up of a successful LMS Coaching and Mentoring Program.

WMS in the Cloud: Is it Ready for Prime Time? – Part One

Cloud computing is nothing new. Most of us already use cloud-based consumer applications every day: Facebook, Flickr, etc. Many of us already use “front office” business applications deployed through the Cloud: CRM, HR, Accounting, http://www.blogger.com/img/blank.gifetc. Some of us are even beginning to use the Cloud to access Supply Chain Execution software like WMS, TMS, and LMS.

 

But is the Cloud ready for robust WMS deployments? When does it make sense to deploy in the Cloud versus the traditional On-Premise model?

 

With all of cost reduction and time-to-benefit advantages that Cloud computing can offer, is it only a matter of time and technology before we see Cloud-based WMS deployments in even the highest-volume DCs?

 

What about customizations? And response times for RF networks with many users? Can the Cloud handle a WMS that’s integrated with a Warehouse Control System (WCS)?

 

In Part One of this Series, we’ll lay the groundwork for answering these and other questions. We’ll review the term “Cloud Computing” and clarify the technology and trends associated with this software deployment model. In Part Two we’ll review the impact that the Cloud is having on Supply Chain Execution software: WMS, TMS, LMS, etc.

 

What is Cloud Computing?
 

·         Cloud computing is the delivery of computing as a service rather than a product, whereby shared resources, software, and information are provided to computers and other devices as a metered service over a network (typically the Internet).

·         Cloud computing is a general term for anything that involves delivering hosted services over the Internet.

·         The name cloud computing was inspired by the cloud symbol that's often used to represent the Internet in flowcharts and diagrams.

·         Cloud services are typically elastic – a user can have as much or as little of a service as they need at any given time.

·         Cloud deployment is an alternative to the On-Premise model where software is installed and run on computers on the premises of the person or organization using the software. It is generally owned and controlled by the acquiring organization and therefore provides a significant amount of flexibility regarding configuration.

Cloud computing services have three main categories:

 

Software-as-a-Service (SaaS)

 

A software deployment model in which software is owned, delivered and managed remotely by a software provider. The provider delivers software based on one set of common code and data definitions that is used by multiple customers anytime. Also known as "software on demand," SaaS is an application hosted on a remote server and accessed through the Internet. Instead of installing and maintaining software, you simply access it via the Internet, freeing yourself from complex software and hardware management. With SaaS, the software vendor will license the application to many customers as a service on demand, through a subscription, in a "pay-as-you-go" model. SaaS is multi-tenant and the vendor manages access to the application, including security, availability, and performance.

 

Platform-as-a-Services (PaaS)

 

Provides a computing platform and a solution stack as a service. SaaS offerings can be hosted through a PaaS.

 

Infrastructure-as-a-Service (IaaS)

 

A provision model in which an organization outsources the equipment used to support operations. The service provider owns the equipment and is responsible for housing, running and maintaining it. Sometimes referred to Hardware-as-a-Service (HaaS).

 

With the above concepts and definitions in place, we’re ready to review the impact of the Cloud on Supply Chain Execution software solutions. Tune in for Part Two!

 

To receive the PowerPoint presentation from our recent webinar with DC Velocity magazine: WMS in the Cloud: Is it Ready for Prime Time?, email us at in4mation@go4sight.com.