Intermec study shows distribution centers lose nearly 3,000 hours a year on unproductive workflows

Research tends to either confirm hypotheses or reveal surprises. In the case of a recent study conducted by Vanson Bourne on behalf of Intermec, it was a little of both.

The survey base of 250 supply chain, warehouse and distribution managers reported that within the last six months alone 79% of them have been tasked with finding an average 19% cost savings from existing operations, which was no surprise. But despite this mounting pressure, 30% of respondents said they had not conducted a review of workflow processes in the past year. For some, it had been more than three years.

“That was definitely surprising,” said Bruce Stubbs, Intermec industry marketing director for distribution center operations. “These organizations are certainly more reactive than proactive.”

A look at the motivations for workflow process reviews further reinforces that point. Managers who have not held a review in the past year say that only compliance (28%) or poor performance (27%) would prompt them to do so today. The latter point is in stark contrast to those companies that have recently conducted a review and implemented process improvements as a result, who say they are mostly motivated by compliance issues (26%) and continuous improvement programs (22%). Only 9% of these proactive companies rate poor performance as a driver for their action.

Most shocking of all in a world in which every customer’s business is hard won – and even harder kept – are the 16% who say they will not review workflow processes until after a customer complaint has been received.

“When these managers are inside the four walls all day, it can be hard to see where the inefficiencies lie,” said Stubbs. “Unless something is clearly broken, it won’t necessarily come up on their radar.”
Still, many respondents were able to identify those areas most in need of a workflow process review. Packing and loading (20%), followed closely by picking and inventory control (both 18%), were the most inefficient workflows. Similarly, those who had recently conducted a review identified inventory control (53%) and picking (47%) as the two areas where cost savings could most easily be achieved.

According to the survey results, over an eight hour shift each worker loses an average of 15 minutes of productivity in an inefficient process. For a warehouse with 50 workers, this adds up to nearly 3,000 hours a year.

When asked how to improve performance across the warehouse and distribution center, the overwhelming majority of managers (89%) said they believed investment in new technology would ensure greater worker productivity. There is also increased awareness of the value of even very small improvements. Nearly two-thirds (60%) agree that “Large time and cost savings opportunities can be found in gaining back mere seconds in operations workflows.” Stubbs pointed to employee travel and hardware limitations, such as a worker in receiving who must walk back and forth to a printer for each label. In such a case, mobile printers could have an immediate and significant impact.

Other improvements might require no outlay at all. Many suppliers will gladly tour a facility with the customer to assist with process reviews, and many improvements might be supported by the existing system. Having made an investment into software or hardware, said Stubbs, the customer can maximize that investment by developing a strong relationship with the supplier. Whether by exploring task interleaving or deploying mobile printers, the study shows most customers have room to improve.

“Anyone doing anything paper-based are the companies with the lowest-hanging fruit,” said Stubbs, who also emphasized the importance of executive backing for efficiency initiatives. “With that support, managers and workers will get creative.”