LETTERS TO THE EDITOR

Productivity Measures

I read with interest the Frontline Fixes articles with regard to productivity measurement in a distribution environment in the March 2004 issue. We have struggled for years in measuring our processes at the each, case, pallet, and order line level. The problems we encountered were that even at these levels of measurement, not all units of measure were equal, especially in a distribution environment as varied as ours.

We have recently borrowed (pirated) the measurement methodology that our packaging plant has utilized with success for several years. This methodology centers on a productivity measure that is based on a calculation of standard man-hours per compensation dollar.

In this method, we have developed rates for each of the respective pick-and-put processes in our distribution center. We pull our actual production information on a daily basis, and using our pre-established rates, we calculate what we believe to be the standard man-hours needed to accomplish the given production. On a weekly basis, we take the totals and the actual payroll by department and calculate a standard hours per $1,000 compensation figure.

The week-to-week comparisons really go to show how the volatility in order volume and order composition can affect how productive we really are. From a control standpoint, we are striving twofold to (1) stabilize the overall measurement and (2) improve it by raising the overall number from week to week. This is done at the departmental level on a proactive basis in actively managing the day's production and minimizing labor waste.

We have been measuring ourselves this way for about six months and the results have been very interesting. I would be remiss if I didn't credit a large portion of the development of this project to our lean operations analyst, Katha Mayland, and our operations supervisor, John Tracy. We are very much in infancy with regard to this process, but with further development at our facilities, the future looks promising.
Jim Douglas
Warren Distribution

Offshore Outsourcing

Our business is heavily dependent on foreign companies and products. We would be deeply affected should protectionist policies be put in place. I believe it is shortsighted to look at one particular sector of the economy, such as manufacturing, and bemoan the normal progression of labor to the most efficient production location. Those of us in the fulfillment industry actually benefit when products are produced in overseas markets. The demand for our services increases, and the opportunity to grow is real. My company has been creating jobs to get foreign-manufactured low-cost products to the American consumer. The men and women in our business don't seem to mind getting paid to operate forklifts and assemble orders. The dollars in their paychecks are just as green with foreign goods as they are with locally produced items.
Daniel N. Lucht
ProPack Inc.

We currently have three offshore business partners. They are essentially entry-level positions in data entry, but they do a good job. Lately we have noticed a certain amount of reluctance among our clients to send work overseas. My guess is that this is some spillover from the campaign rhetoric. In Wisconsin, a good portion of the manufacturing jobs have left, but that cannot be attributed solely to offshore — or maybe it can. But those jobs are gone for good and a politician is not going to bring them back.
Rich Hamilton
OnCourse Information Services

I would have to go with Senator Dodd on his bill to limit federal monies for outsourcing contracts. It is important that the government motivate business to fulfill needs here in America. Federal money is American people and American business. The harder question is [that of] penalties on companies who outsource in the private arena.
John Brick
Big Horn Music Services

I honestly think that protectionism is by far one of the most unhelpful and just plain dumb actions we can take as a powerful capitalist nation. This entire argument is ridiculous given the fact that outsourcing overseas from the U.S. has been going on for decades and should continue. I believe it is anti-capitalist to even fathom that we would restrict governmental contracts, of all things, to companies that do not use overseas workers.

We are a nation of innovators (leaders), not unimaginative doers (followers). The last thing we need to do is build walls and start with protectionist attitudes. If someone else in the global economy can do it better, faster, cheaper, so be it! It's called capitalism for a reason.

Although some will certainly argue the point of capitalism, it's a changing, fluctuating state, not a stagnant process. Globalization changes the way capitalism works. We should definitely not build walls but accept this fact and compete as we always have. Thanks for starting the discussion in this venue, and we hope to hear some constructive feedback.
Jeff Sosville
eBags.com

Although I object to the issue of offshore outsourcing, I object even more to the government telling us what we can and what we cannot do. The government is already into our businesses more frequently than is necessary. Why not look for more attractive, incentive-based means to cause businesses to employ domestically? There are numerous counterproductive forces, imposed by the boards of directors of many companies, that basically become the survival strategies of managers — either find ways to cut costs or we will find others that will. Consequently, those forces cause many managers to look for any means to save money, even if it costs jobs in our own country, as long as it is not their own. Regardless, the government has no right to tell us how to run our business. They need to look introspectively for the elimination of waste within their own organizations.
Edward R. (Ed) Danner II
Kable Fulfillment

We absolutely support Sen. Chris Dodd's bill. We think it's criminal that federal monies are being used to indirectly fund the offshore outsourcing of the jobs of American workers … the same people who, by the way, pay the taxes.
DW Stevenson
DW Stevenson & Associates

---

Address letters to: Letters to the Editor, Operations & Fulfillment Magazine, 11 River Bend Dr. South, P.O. Box 4949, Stamford, CT 06907. Send e-mails to: barnn@primediabusiness.com. Published letters do not necessarily reflect the opinions of O+F and may be edited for length and clarity.