It’s good to be blogging again after a couple months off. In my last post of this series on reexamining supply chain fundamentals, we discussed transportation.

Today I’m writing about leveraging your warehouse and distribution center operations to drive effectiveness and efficiency within the supply chain. When examining your warehouse operations, focus on three areas: flexibility, training and the use of metrics.

Flexibility

Increasingly, customers expect more from their suppliers. They want suppliers to meet their specific business needs and to do so with greater responsiveness. Here are three ideas to introduce flexibility into your operations to meet these needs:

•  Identify common customer needs that fall outside current policies. Build processes that support those needs. If you are getting a request for the same issue repeatedly, it’s not a bad idea to create—or adapt—a process so you can address it consistently. For example, we have a 2:30 cutoff time for next day deliveries, but it’s not uncommon for a customer to call later in the day due to an emergency. To meet these needs, we’ve built flexibility into our picking and shipping processes.

• Build processes that can accommodate special requests. Many of our customers make special requests that don’t fit neatly into our SOPs—for example, specifying different shelf life requirements for each chemical they purchase. Developing customer-specific work instructions has allowed Doe &Ingalls to consistently and reliably meet these requests.
• Be open minded to offering new services. Put yourself in your customers’ shoes, or take a look throughout your industry to find the unmet needs that your warehouse operations can fulfill. For example, seeing the time, space and capital constraints our customers face today, we are offering sampling, dip tube management and supplier-managed inventory—allowing customers to outsource non-strategic but resource-intensive activity.

Training

Training is especially important today for two reasons.  First, many long time employees are exiting the workforce. Often, these people were not the managers, but the go-to people for the rest of the group. And second, training has not been a focus area during the recession because of budget constraints. This means that warehouse operations are having to perform the same functions, but with fewer people.  

To prevent a lack of training from causing bottlenecks, consider these ideas. (1) Look at your existing training files and make sure the requirements are still relevant. If they are, ensure that all your employees’ records are up-to-date.  (2) Step back and look for areas where a particular function is dependent on one individual.  You can’t slow down operations while an untrained employee fumbles through tasks they have never performed, or, worse yet, avoids a task until the trained employee comes back from lunch or a vacation. I ran into this issue with an inbound hazmat shipment in 2011. The shipment was stopped in transit because the terminal had only one certified employee to complete the hazardous goods paperwork for an air shipment. (3) Look for areas to cross train your employees. Having employees learn other roles or functions within the organization ensures functions are not performed by a single employee and helps to identify areas for process improvement.   

Metrics

“What cannot be measured cannot be improved.” - Edward Deming

I’ve heard Deming’s quote since I started working in supply chain management, but I didn’t fully appreciate it until Doe & Ingalls began operating in a recessionary environment. We experienced rapid growth with the addition of our California and Massachusetts locations. And our customers’ needs and expectations were changing with the maturing biopharm industry as well as the recession.  Fortunately, VP of Distribution Services Andy Finn implemented a metrics program, giving us visibility into how these changes were affecting our operations and impacting customers. 

When reviewing your warehouse operations metrics there are a couple of things to think about.  First, consider whether the metrics are meaningful. Changes to the economy and changes to your business will cause some areas to be more important than others. Don’t be afraid to add metrics as needed. If it turns out they are not helpful, or if the data is not worth the time to collect, then remove that item from the program. Then, develop a meaningful review process where you regularly review the metrics with the appropriate stakeholders. Doing so enables you to quickly make operational efficiency and service improvements.

On my next post in this series, I will write about reverse logistics. This is often viewed as a necessary evil, but if addressed strategically, it’s an opportunity to improve supply chain operations.