Drive Measurable Results With Data Utilization
According to recent estimates, within the next 12 months, 75 percent of shoppers expect all brands to offer same-day delivery. Despite these escalating e-commerce challenges, many distribution centers (DCs) continue to run with little to no reliance on available operational data. As an industry, we are facing a true challenge.
Can we afford to run distribution centers only on intuition and feel? Can we continue to ignore operational data and expect better outcomes?
The topic of data utilization is among the most critical issues facing modern DCs. With slim profit margins and soaring consumer expectations, operators simply cannot afford to run warehouses on gut feelings. Simply put, our industry can no longer ignore operational data and expect better outcomes.
But many companies in our sector seem content to continue with the status quo, i.e., running their operations without a second thought about what’s really taking place within the four DC walls — while ignoring potential insights that could be available at their fingertips.
Understand the operational impacts
In other industries, such as the energy sector, data utilization has been built into the culture for more than a decade. From power plant output to oil platform production, these companies analyze every bit of data to squeeze even the smallest scraps of efficiency out of a process.
But DC leaders can be much more skeptical about the operational impacts of data. A production manager recently learned that they were only running their automated sortation system at 30 percent capacity, to which he replied: “Why would that matter, as long as we meet our daily targets within two shifts?”
Similarly, a DC maintenance manager recently asked, “Why put a $100 sensor on a $500 motor?” And a supply chain V.P. offered this objection: “Can you tell me the true downtime in a building?” Of course, the answer was: “Yes!”
In each scenario, these DC stakeholders didn’t understand how data-driven, actionable insights could deliver measurable, profitable results, such as:
- Run one shift instead of two
- Add a sensor on the motor to prevent downtime
- Gain visibility into DC operations to optimize your enterprise
The big e-commerce players are already using data to drive productivity because they don’t have the luxury of excess capacity in their systems, especially during peak seasons. But for smaller operations, the notions of continually collecting data and applying automated analytics to it are new.
And the idea of acting on those insights in real time, during production, is simply not part of their playbook. To reap the full benefits of data analytics, the industry may need a culture shift.
Establish a data culture
For those operations that become early adopters, they can quickly catch up to (or surpass) their competitors by adopting the available technologies, but only if they can change their organizational cultures as well.
This process begins with transparency: giving everyone in the company access to the same data so they can solve the same problems. It also requires a level of trust across departmental silos that is founded on surfacing issues for resolution instead of recrimination.
It means defining and understanding your critical business outcomes, and then aligning everyone in the organization to them. Keep in mind that these outcomes can vary greatly among companies in this sector. But this simply means everyone must understand what has value and what does not.
Like any new technology or process, introducing the use of data in a transparent and automated way will require some degree of change management in order to engrain it into standard procedures and ultimately, leverage it effectively.
Adopting available technologies
At Honeywell Intelligrated, we’re creating the tools to help companies embrace data utilization. We’ve developed a foundational platform that we call The Connected Distribution Center. It aggregates and analyzes operational data — and most importantly, delivers insights designed to achieve real business outcomes.
Featuring a suite of robust software and hardware, our connected offerings allow DC operators to collect, visualize and analyze their operational data — not merely for the sake of accumulating data, but because it delivers actionable insights to improve productivity. With our tools, you can start small and scale up, or go all-in to meet your business outcomes. But the most important thing is that you just get started.