Design ambition

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 by15-20%?

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

Dock-to-stock time Why not go for “gate-to-stock” time instead, and 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 ASN 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 cross-dock this receipt? Or, at a minimum, can we by-pass reserve storage and put it directly into the forward pick slot? 30-50% of the labor in a distribution center is not devoted to picking, but to the tasks supporting 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 and 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.

Employe 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 material handling systems and information systems to support them.

How do you make this happen? It’s 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!

ABOUT THE AUTHOR

James M. Apple, Jr. is a Director in The Progress Group. Prior to co-founding The Progress Group in 1991, he was a Partner with Coopers & Lybrand's SysteCon division. During 1992-1995 he served as a Senior Systems Advisor with Vanderlande Industries, a major conveyor and systems provider in Europe.

Jim is an internationally recognized thought leader in the area of facility design and integrated distribution systems. His contributions to the improvement of distribution practices have been recognized by his receipt of the prestigious Reed-Apple Award, which is given for lifetime contributions to the advancement of the material handling profession. Jim has also received the Institute of Industrial Engineers' Facilities Planning and Design Award. He has written numerous articles and handbook chapters on warehousing and logistics operations and is a popular speaker on logistics seminar and conference programs.

Prior to SysteCon, Jim worked as an Industrial Engineer with IBM, was Supervisor of Facilities Planning for the Oldsmobile Division of General Motors and was Executive Vice President for an automotive aftermarket parts supplier. He holds B.S. and M.S. degrees in Industrial and Systems Engineering from the Georgia Institute of Technology.