60 seconds with... Mike Martinez, ConAgra Foods

Mike Martinez on how to turn a DC into a revenue generator.

By Staff -- Modern Materials Handling, 1/1/2005

It's really a two-step process that starts with meeting customer requirements. We have to fill orders to the right quantities, without damage and on time. If we miss, DC costs increase. Customers can deduct money on orders that are shorted or damaged. In those cases, we have to pay for transportation back to the DC, sort any damage, put the inventory away and pick it all over again.

So, the first step is to get it right the first time and eliminate extraneous costs. Then you need to find ways to become more efficient while ensuring that orders are serviced accurately.

Reviewing ConAgra Foods' distribution infrastructure and practices to make them as efficient and effective as possible is an ongoing process and a top priority of mine. The big-picture objective is to reduce fixed costs across the distribution network by increasing throughput. But you cannot ignore smaller opportunities that deliver much bigger savings when they add up. This frees up cash for the company that can be reinvested for marketing or R&D, for instance. And as you boost customer service, you're going to have more happy customers which will generate more revenue for the company.