Design Ambition

Tips for making your new year's resolutions for your facility come true.

By Jim Apple -- Modern Materials Handling, 12/1/2006

Is 2007 your year to plan for a new facility—or revisit the processes in the current one? If so, how high will you set your goals?

Will you just try to achieve a specific capacity based on business projections? Or, will you strive to raise productivity by 15 or 20%?

Why not shoot for the moon? Try for perfection in all of the relevant performance measures for your facility. For example:

• Dock-to-stock time. Why not go for "gate-to-stock" time instead. Aim for just the time that it takes to spot a trailer, unload the pallets or cartons and transport them to a storage location using advanced ship notice data to perform the receiving process enroute.
• Touches. In a facility in Pennsylvania, I was taken by big signs promoting "OHIO." It didn't make sense to me until someone interpreted it as "only handle it once." It forces one to ask, can we crossdock this receipt? Or, at a minimum, can we by-pass reserve storage and put it directly into the forward pick slot? Mostly, 30 to 50% of the labor in a distribution center is not devoted to picking, but to the tasks that support picking.
• Productivity. Should we try to match the best of our competitors? Or should we look for the best demonstrated practice across all industries? And don't forget that real productivity is a combination of efficiency while on task with effective utilization of all of the paid hours for both production and support personnel.
• Quality. Remember that 99.9% still disappoints one customer in a hundred if the average order is 10 lines. What processes do we need to put in place to hit 100%—on the first pass! No inspection or re-work allowed.
• Space and cube utilization. In a typical warehouse, product occupies only 10% of the available building cube, even when we consider it to be full. The key to increasing this number is choosing the right storage mode for the inventory characteristics of each product.
• Employee satisfaction. Good processes are important to the achievement of high levels of quality and productivity. But processes do not run by themselves. It takes trained and motivated employes to make them effective. Can you find ways to reduce learning time to minutes instead of weeks? Can you create a work environment that is ergonomically, financially and socially friendly enough to keep costly turnover to a minimum?

Now, for the hard part. How much can you spend to reach these goals?

In fact, if you could achieve them, you might easily reduce the labor in the warehouse by 50% and the space requirements by a third. This reduction in annual costs will pay for a substantial investment in materials handling systems and information systems to support them.

How do you make this happen? It's actually not so difficult.

• Form a team of people who know your business well, but are not anchored to the current process.
• Support the team with some outside resources who can stimulate your thinking and bring experience from other industries.
• Lock yourselves in a small room for a few weeks of intense work sessions. Don't worry about being too ambitious. That's the whole idea.
• Get management to challenge your recommendations. Be careful. They are likely to get excited and push you even harder.

I hope that you'll go for it!