In the high-stakes distribution and fulfillment landscape, DC operators constantly seek ways to increase operational efficiency while eliminating waste.
Distribution centers continue to face labor challenges, especially retaining quality labor capable of meeting service level requirements for fulfillment accuracy and speed. How can operations overcome a shrinking talent pool and rising labor costs while reducing cost-per-piece in a competitive marketplace?
Don’t forget operational fundamentals
A lack of attention to basic essentials plagues many warehouses. Focusing on operational best practices such as workspace sanitation, slotting upkeep, preventive maintenance and ongoing training builds a foundation for optimized throughput and service quality. The path to correcting fundamentals starts with a daily walk. Observing processes in action and evaluating the how and why of each task highlights opportunities for immediate improvement and can start further investigation into major process enhancements.
Avoid process islands - keep the entire operation in mind
In an effort to satisfy growing demand for a variety of specialized value-added services, today’s DCs host myriad process islands, splintering operations and making it difficult for managers to maintain a comprehensive view of all processes. This causes difficulty in determining staff requirements, measuring productivity and monitoring output to ensure sustained progress from each process that works in harmony with the overall flow path from receiving to shipping. The lesson? Don’t just focus on a single process without considering its effect on the overall operation.
Emphasize workplace relationships as much as the work itself
In addition to basics like safety, lighting, airflow, proper tools and ergonomics, desirable workplaces are built on relationships. The relationship between manager and employee establishes trust and communication vital to operational success. Relationships between associates provide opportunities for mentoring, boosting morale and establishing a culture of success that permeates the operation. Ultimately, empowering staff with the direct, meaningful relationship between their work and the customer’s shopping experience improves job satisfaction and reinforces the importance of performance and quality measures.
For more information on overcoming operational challenges and increasing efficiency in distribution centers, read the Intelligrated Operational efficiency white paper.
Take a step back to December 2013. During the last shopping weekend before Christmas, e-commerce sales jumped 37 percent from the year before, challenging retailers and carriers to meet delivery expectations. Fifteen percent of online shoppers who ordered items by retailers’ specified cutoff dates did not receive their packages by Christmas Eve.
To increase capacity during peaks, fulfillment operations commonly employ seasonal labor to cope with increased order volumes. However, determining the right amount of additional labor and getting the most out of staff is challenging. Labor management software (LMS) can forecast workforce requirements, track performance and control labor costs while fostering a culture that incentivizes productivity, self-management and continuous improvement.
See below for five ways LMS benefits operations during peak season:
1. Increase overall productivity and performance
Automated labor tracking frees supervisors to invest time in the workforce and manage for a higher level of productivity. LMS tracking enables operations to evaluate employees and temps in relation to their peers, experience in their current position and other performance benchmarks. Furthermore, labor management systems integrate with mobile devices such as tablets and smart phones to provide actionable tracking information on the floor. This enables supervisors to reconcile on-floor observations with current and historical performance data to address issues in real time.
2. Bolster retention
Driven by LMS, a robust performance management program increases employee retention and job satisfaction. By implementing a structure of accountability that rewards high-performing employees through financial and non-monetary incentives, operations can get more out of their existing skilled workforce and reduce the need for temporary labor.
3. Identify low performing employees earlier
Operations can put new employees on a training curve within the LMS that provides a better understanding of work content and establishes appropriate performance expectations based on time in the facility and projected improvement. Rather than waiting months to determine an employee’s strengths and weaknesses, operations can gauge employee progress and provide coaching, or reassign personnel to alternative functions.
4. Identify training needs
Extensive performance data enables operations to identify high-performing employees and those who require extra attention, leading to process improvements and increased productivity. Supervisors can observe outstanding associates and glean key tactics to implement with the rest of the workforce.
5. Understand staff activity through accurate performance and on-standard percentage data
With fulfillment operations under intense pressure to meet shipping deadlines and satisfy customer expectations, having too little labor is far worse than overstaffing. However, the costs of overstaffing add up over time and discourage maximum productivity from each employee. LMS provides accurate performance and on-standard percentage information that illuminates how staff uses their time. This enables operations to avoid wasted staff with better labor forecasting at a more granular level.
In practice, a fulfillment operation may operate with a permanent staff of 10 employees supplemented by a contract with a temp agency for up to 25 temporary staff members. Using point of sale data, management knows it must complete 15,000 picks the following day. Given the quantity and product mix, LMS forecasting dictates the operation requires 12 pickers and one support employee. The historical tracking and forecasting functionality allows operations to flex workforce based on incoming work, ensuring sufficient staff to meet productivity goals while reducing wasted labor.
Rapid ROI: An LMS pays off
The productivity and efficiency gains from investment in Intelligrated’s GoalPost® LMS can yield positive ROI in the first year of ownership. Factoring in an achievable productivity improvement of six percent for an operation filling an average of 5 million orders per year, GoalPost can save more than 32,600 hours of labor each year. This translates into positive ROI of more than $358,000 in the first year and a cumulative impact of more than $1.2 million over three years.
For more information, read Intelligrated’s white paper, Introducing the Fulfillment Execution System. To learn more about order fulfillment metrics to keep operations up to speed during peaks, read our blog “The holidays are almost here…How is your pick-to-light system doing?”
Related media coverage:
The New Year starts fast with Intelligrated heading to the Big Apple for NRF’s annual Convention and EXPO. This year’s show will be open Sunday for the first time ever, allowing more time for education, networking and exhibitions.
The Intelligrated booth, #4409, will feature the latest software and automated order fulfillment solutions capable of meeting the throughput, accuracy and order profile demands of e-commerce and omnichannel fulfillment.
Booth attendees can learn more about:
Fulfillment execution systems: Unlike traditional WMS solutions, fulfillment execution systems optimize fulfillment in real time, through constant analysis of order priority, inventory, labor, process and equipment information. This comprehensive software suite of warehouse management (WMS), warehouse control (WCS), order fulfillment, labor management and supply chain business intelligence software enables real-time operational decisions to maximize speed, accuracy and efficiency for fast, accurate shipments.
Picking technology: Intelligrated offers the ideal mix of picking technologies for a variety of workflows and changing business requirements as operations scale to meet seasonal demand and sustained growth. Intelligrated’s voice picking solution provides multilingual, hands-free picking commands to optimize productivity and yield more than 99.9 percent fulfillment accuracy across a range of retail applications. The intuitive system recognizes natural language for easy training and rapid user acceptance. Intelligrated also offers light-directed mobile picking carts that enable single pickers to fill multiple orders in one pass, improving throughput rates and ergonomics.
Labor management software: LMS from Intelligrated provides a coaching and training toolset, actionable reporting and user-friendly analytics to enable a better understanding of labor performance for improved retention, training and productivity.
Business intelligence software: BI provides real-time reports and analysis via mobile-friendly dashboards to empower management to make informed operational decisions for improved distribution network performance on the floor.
Intelligrated understands how to meet the competitive demands of retail distribution, thanks to experience with more than 60 of the top 100 global retailers and 50 of the top 100 internet retailers. The company’s automated order fulfillment technology and software combine with its extensive lineup of automated equipment to deliver fully-integrated systems backed by total lifecycle support.
Be sure to stop by booth #4409 to meet with Intelligrated representatives about solutions that deliver the right level of automation to meet order fulfillment demands.
To schedule a meeting at the show, email email@example.com. Multilingual booth support in Portuguese and Spanish is available.
The Deloitte Cincinnati USA 100 program salutes the outstanding achievements of the area’s privately-owned businesses, recognizing the top 100 private companies based on revenue. Intelligrated made the list for the 8th straight year, ranking 21 out of the 100 companies selected.
Deloitte begins compiling the list in the summer, surveying nearly 650 firms for sales revenue and other data. Along with the 100-company list, Deloitte and the Cincinnati Enquirer publish trends and highlights based on results from the surveys. Their findings include:
- More than 70 percent responded with reducing corporate tax rates as what the federal government can do to help mid-sized businesses grow in 2015.
- Nearly half of the companies surveyed said they are likely or very likely to acquire another company in the coming year.
The Deloitte list is the latest Ohio business accolade for Intelligrated in 2014. The company made the Cincinnati Enquirer’s Top 100 Workplaces list as a top large workplace in Greater Cincinnati and Northern Kentucky. The Cincinnati Business Courier recognized Intelligrated as an engineering finalist for its Innovation Awards and as a finalist for its Fast 55 program, which ranks the fastest-growing private companies in Greater Cincinnati. The Ohio Cooperative Education Association also honored Intelligrated with a Distinguished Employer Award, recognizing the vital role of companies who provide employment and learning opportunities for co-op students.
In the material handling and logistics industry, Intelligrated placed in Modern Materials Handling’s ranking of the top 20 worldwide materials handling system suppliers, the only U.S.-based company in the top 15. Further honors in the industry include recognition as a Top 100 Logistics IT provider by Inbound Logistics and inclusion in the Supply & Demand Chain Executive 100.
Intelligrated has grown to more than 2,600 associates worldwide and expects further growth to close 2014. The company continues to develop its presence within the United States and abroad, opening a new southwest regional operation in Texas and expanding its offices in China, Brazil and Canada.