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The Five Most Common Mistakes When Planning a Distribution Center by TriFactor's Craig Bertorello and featured in Supply & Demand Chain Executive (online).  

 

Seven Factors to Consider When Choosing an Order Picking System by TriFactor's Richard Gillespie and featured in Industrial Distribution (online).

 

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TriFactor Home > TriFactor Learning Center > White Papers > Lessons from the Busy Season

Busy Season Lessons

5 Things Your Busy Season Can Teach You

By John T. Phelan, Jr., P.E.

For most distributors, especially in the retail industry, preparing for the busy season is well underway.  With the holidays fast approaching, breaking out the checklist in order to stay ahead of the demand is priority number one for many DC managers.   Even though process improvement is typically done during slower times, the full cycle of preparing for and then executing the busy season’s tasks offers a wealth of opportunity for learning and understanding areas to focus on being a better distributor.  Here are five gifts the holiday season can offer DC managers:

Gift 1 - Determine bottlenecks in your system.

When I was a plebe at the Naval Academy a while back, one of the first things that we had to memorize was a poem called The Laws of the Navy. I remember spending a lot of time in push up position with my platoon, repeating the 5th law which states (from memory) “On the strength of one link in the cable, dependeth the might of the chain, who knows when though mayest be tested? So live that though bearest the strain!”  How does this relate to a distribution center? It’s simple; the DC’s throughput is only as high as the slowest part of the process just like a chain is as strong as its weakest link. So during the height of the busy season, take a hard look at the processes or equipment that is slowing the downstream processes and equipment and then document it.  It might be easy things, like outdated automatic tapers or checkweigh scales. Or it might be more difficult areas, such as Value Added Services (VAS) and packstations that cannot provide the same output as the input.  In any event, it is best to know and understand the weak points so that they can be addressed during the slower seasons and thus improved upon for the next go-around.

Gift 2 - Determine your pick rate benchmark.

Almost every time we are called in to evaluate the justification for a new pick module or new picking technology such as voice picking or pick to light, we base a lot of the efficiencies and pick rates on mutually agreed educated guesses and industry standards. This is often times close, but there is always some gray area or level of subjectivity which can degrade the believability of the ROI.  What better time than when the distribution center is bustling with activity and the associates are operating at maximum utilization to capture the pick rate data and establish a benchmark?  This data would then be 100% objective and therefore, difficult to dispute, especially when formulating justification for newer picking technology.  Not only that, when the vendor for the new picking technology states that you’ll see 30% improvement in your pick rates, you will have actual historical data to judge that vendor’s promises.

Gift 3 - Determine your order accuracy benchmark.

Very similar to Gift 2, pick rate benchmark, it is best to evaluate order accuracy when the distribution center is operating at full throttle.  Because during slower months, order pickers don’t have to perform as quickly and thus are less prone to making mistakes.  The challenge with capturing an order accuracy benchmark during the busiest time is that it takes a lot of time to verify accuracy.  For most distributors, a 100% verification process is simply too slow and inefficient.  So either a random sampling must be done or using a technology such as inline high speed checkweigh scales that communicates with the order management system to confirm the expected weight of the contents of the specific box or tote with the actual weight.  This is obviously a little more sophisticated, but it certainly is a means to accurately and effectively capture the data and use as a benchmark for justifying a new picking technology that is meant to improve picking accuracy.

Gift 4 - Determine your required storage capacity.

As the busy season draws near, most distributors ramp up on their on hand inventory.  When this happens, if there are not enough storage locations utilizing available vertical height such as pallet rack, shelving, mezzanines, etc., then the products wind up on the ground somewhere.  When this happens, a lot of inefficiencies are immediately created.  Pallets get captured by each other so there is double handling in order find and get to the right pallets on the floor.  Clear paths for forklifts or other equipment are hindered, which becomes not only a loss of efficiency but also a potential safety hazard.  Inventory accuracy is diminished since the inventory management system does not have storage locations for specific items that were received but put away in non-standard locations.  If this is the case, look around for available vertical space to utilize for storage.  It is a very inexpensive way to becoming more efficient and organized.

Gift 5 - Determine your customer satisfaction.

This is probably the best gift that the holidays can offer.  Whether your distribution channels are direct to consumer (ecommerce), direct to store or other wholesale channel, your customers keep the “busi” in business.  If at their peak demand for your product, which translates to your peak supply, you might be focusing on internal issues and challenges to get you through the season.  Don’t forget to periodically look outside your four walls and ask the customer how you are doing and what improvements do you need to make in order to keep them happy.  Just the action of reaching out to them and considering their level of satisfaction would mean a lot.  Even better, they might have something very valuable for you that you might easily incorporate into your operations.

Although these gifts translate to a little more work during a period when the value of time is the highest, the payoff could be worth it.  Identifying and addressing bottlenecks will make next year’s busy season that much easier.  Establishing performance benchmarks is the first task in process improvement since measurement is the only true way to grade productivity.  And finally, getting customer feedback is critical to keeping customers, and that is the gift that keeps on giving! 

John T. Phelan, Jr., P.E. is Chief Operating Officer of TriFactor, LLC, a material handling systems integrator based in Lakeland, Fla. He can be contacted at 863-577-2243 or jjphelan@trifactor.com. For more information visit www.trifactor.com.