Coping With Today's Warehousing Challenges

John Karolefski
Created:

Third-party logistics providers and experts weigh in on the changing role of the warehouse-and how food companies are adapting.


  • Consistent operating processes as well as procedures;
  • Labor standards based on standard operating procedures;
  • An open channel of communication of standards and performance;
  • Classroom and on-the-job training of standards and performance;
  • Continuous improvement teams focused on day-to-day operations.

Keeping Up With Technology

Ackerman: Voice recognition technology is the most important technology gain that we've seen in the last quarter century. You have to go back to bar coding to have anything like it. There are a few reasons why I am enthusiastic.

One is a clear, demonstrated payback, usually less than a year, for most installations.

The payback is in greater productivity. We have a public warehouse client in Columbus that installed voice recognition for one of its customers. The installation was done a year ago. In the first full month they could track, there was a 10 percent productivity gain.

I'm sure they haven't hit their stride yet because people are still learning. So the productivity gain was virtually immediate and I'm sure will improve.

One of its greatest virtues is in a cold storage warehouse where you have to wear gloves. You don't need a pencil or have to take your gloves off. It's hands free. You just talk and listen.

Voice-recognition is not for everybody. It won't be justified in a low-volume operation because there's not enough volume to pay for it. It gets cumbersome in a situation where the SKU numbers are extremely long and you have to do a lot of talking. So it won't cure everything, but it's pretty close. I have yet to hear any significant negatives.

Performance Metric Monitoring Can Reduce Distribution Costs

In today's competitive business environment, according to Thompson Brockmann, a director at Tompkins Associates Inc., there is continuous pressure for warehouses and distribution centers to increase flexibility while minimizing the costs of distribution.

At the same time, operations are growing. Organizations must carefully plan their investments in distribution centers, equipment and systems, to meet long-term requirements that include being responsive to changes.

Performance metric monitoring is a key tool in the successful implementation of best practices that can be used to reduce distribution costs while increasing flexibility.

With performance metric monitoring, an organization can:

  • Identify improvement opportunities.
  • Quantify and prioritize improvement opportunities.
  • Track changes and their results.
  • Quickly flag changes in business to remain flexible.

It is critical that the organization choose metrics that truly reflect the success of the operation because this can help identify areas for improvement. Most often, organizations use metrics to track operational productivity, inventory accuracy and customer satisfaction. Using multiple criteria for tracking these common and readily measurable benchmarks, they can track the cause and effect of improvement initiatives and changes in the business environment.

Members of the Supply Chain Consortium support the importance of performance metric monitoring to distribution operations. They report the following usage and significance of key performance indicators:

Performance Category
Key Performance Indicator
Percent of Members Using
Importance (Scale of 5)
Inventory
Inventory Accuracy
72%
4.6
Customer Satisfaction
Order Accuracy
63%
5.0
Labor Productivity
Shipping Efficiency
61%
4.7

Ultimately, minimizing costs of distribution and efficiently reacting to changes in business is a strategic goal for any operation. With the proper performance metric tools and processes, distribution centers can continually improve their operations while meeting their business requirements.


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