There's no question that value-added services are all the rage in warehouses and distribution centers. But that doesn't mean every manager has the same reaction to customer requirements for slowing up the order fulfillment process with added steps. Rage, here, can have a double meaning.

Some see this as an opportunity to make the DC and its operations even more valuable and customer centric. Others see it as the moral equivalent of an unwelcome guest moving in, and staying.

As Jim Tompkins of consultant Tompkins Associates says, "Warehouses are trying to reduce inventory, yet maintain responsiveness, and now must handle value-added services. It's certainly a conflict, and it comes to rest in the DC."

Furthermore, value-added services change the landscape of the facility. At those with extensive value-added operations, parts of the DC look much more like a manufacturing floor than a traditional DC. And with good reason. Value-added operations from ticketing to display building require workstations and new processes. Not to mention floor space.

With all that said, value-added services are clearly here to stay. The real issue is how do you as a DC manager deal with that reality. You will have to make some choices, if you haven't already.

The story, Value-added service game plan, offers some guidelines for success such as better forecasting and a closer partnership with suppliers. As Tompkins says, the blurred distinctions between DC and manufacturing means that you have to share more data with suppliers and customers to be both efficient and responsive. Additional tips have to do with keeping your workforce sharp on value-added services and making your operations sufficiently flexible to accommodate needed process changes.

But no matter how much you try to optimize your operations, some value-added services don't give you that option. Instead, the value-add is to improve your customer's operations at the detriment of your own. In some cases, it's a matter of making it easier for the customer to receive your shipment even if it sub-optimizes your processes.

You may even decide that value-added services aren't in the cards and pass them on to a third party. That's a legitimate option. McGraw-Hill has tried it both ways, but now builds special displays of books for classrooms at its new textbook DC in Ashland, Ohio (see By the book distribution).

"Our systems still process these items as if they were being handled by a third-party provider, except that now we act as our own 3PL operating within our building," says Gary Salters, senior vice president of order fulfillment. By his accounting, McGraw-Hill now excels at this value-added service.

One way or the other here, you, too, need to find a way to excel at value-added services. There just aren't any other options.