short takes

Hire top warehouse talent, avoid e-fulfillment bloopers, ward off pesky hackers

Heads Count The last thing you want to read is yet another study that talks about the labor crunch. But check out a new report from the Warehousing Education and Research Council that offers a refreshingly different take on the subject, providing an inside look at how warehouse operations tackle the situation. “Hiring Practices for Entry-Level Personnel,” published in December 2000, offers information on turnover rates, recruiting methods, skills that employers find most valuable, and perhaps most important, the adverse consequences (increased workload and operating expenses, poor productivity, and weak morale, among others) of not filling vacant positions.

In July 2000, WERC mailed 820 questionnaires to a random sample of manufacturers, wholesalers, distributors, third-party logistics providers, retailers, and government/utility companies of various sizes in industries such as consumer goods, food, paper and printing, automotive, office products, computers, and electronics. The survey drew 180 responses.

Respondents are not particularly satisfied with their efforts to attract high-quality candidates; on a five-point scale, 38.5% indicate a “3,” and 22.9% say they are “very dissatisfied” with entry-level warehouse workers hired in the last 12 months. Dependability is by far the most desired skill – and also the one most frequently lacking. (As the researchers put it, rather redundantly, “It is extremely difficult to operate a warehouse efficiently if half the personnel do not come to work!”) Of 164 respondents, 129, or 78.7%, rank dependability as one of the top three skills they seek, and almost 30% rate it as the most important skill. About a third of respondents, 32.9%, mention dependability as the quality most usually absent among applicants for entry-level warehouse jobs.

The Internet has made considerable inroads into business processes, but traditional ways of finding employees are still your best bet. Of the 78.1% of respondents who place newspaper ads, 33.9% say they are the most fruitful recruiting method; of the 59.6% who use employment agencies, 30.5% consider them most effective. Other old standbys are employee recommendations (68.5%) and word of mouth (49.4%).

Cheapskate employers, listen up: According to the survey, the number one factor for hooking qualified candidates is competitive pay. Nearly two-thirds of the respondents – and an overwhelming 90.5% in the automotive industry – say salary is the star attraction, followed by benefits (56.4%) and company reputation (54.2%). In the benefits area, look to the unorthodox to woo talent. Health, dental, and life insurance packages are widespread, but perks like profit sharing, tuition reimbursement, optical insurance, and pension plans are less common in the warehousing business and may tip the scales in your favor. With demand for entry-level hires expected to rise (17.1% of respondents predict a “drastic” increase) in the next 12 months, gaining the slightest edge can make a difference.

For more information, contact WERC at 1100 Jorie Boulevard, Suite 170, Oak Brook, IL 60523-4413; phone: (630) 990-0001; fax: (630) 990-0256; e-mail: wercoffice@werc.org; Web site: www.werc.org.

short takes

Steppin’ Out You can never be too rich or too thin – or, it seems, outsource too much. For those who believed the fad would pass, a new report, “Outsourcing Index 2000,” provides ample food for second thought. Outsourcing is growing faster than the U. S. economy (15% a year versus 3.5%), notes the study, conducted by The Outsourcing Institute and Dun & Bradstreet. “What was once considered a limited activity is now a part of normal business practices,” according to the report, which projects the outsourcing market to expand from $295 billion to about $340 billion in the next 12 months. Smaller companies ($10 million to $15 million in sales) are also getting into the act, expecting to up their spending on outside services by 25% or more by this fall.

As companies integrate outside service providers into their businesses, they are farming out functions previously regarded as sacrosanct, such as customer service and human resources; spending on employee outsourcing will jump 20% in the next year. Information technology accounts for more than a fifth of all outsourcing expenses, with e-commerce functions such as Internet services beginning to supplant traditional IT development and support.

Increasing globalization is another prominent trend. Ten percent of all outsourcing expenses go to services purchased overseas, and about 5% of all U.S. companies use service providers based in other countries.

For more information, contact The Outsourcing Institute, 500 N. Broadway, Suite 141, Jericho, NY 11753; phone: (516) 681-0066; Web site: www.outsourcing.com.

short takes

When Worlds Collide If you’re at all involved in e-commerce, chances are that you’ll need to negotiate with foreign customers or set up operations abroad – tricky ventures even for those with considerable experience working internationally. For a comprehensive list of who’s who and what’s what in the U. S.’ s top 25 trading partners, check out the “Global Expansion Toolkit” published in the August 2000 issue of Export Today’s Global Business magazine. Countries featured include standards such as China and Mexico, plus emerging economies like India, Singapore, Saudi Arabia, and Venezuela. Containing phone, fax, e-mail, and Internet contact information for dozens of private and government organizations, the Toolkit is a rare find. Equally valuable are the listings of U. S. state offices that help with investment and export promotion, because these often will be your first point of contact.

For more information, contact Trade Comunications, Inc., 733 15th Street, NW, Suite 1100, Washington, DC 20005; phone: (202) 737-1060; fax: (202) 783-5966; Web site: www.globalbusinessmag.com.

short takes

Customers First Like just about every other industry today, the third-party logistics (3PL) business has become keenly aware of the importance of keeping customers happy. A Tompkins Associates survey of 62 CEOs of 3PL firms reports that 68% of respondents rank customer service improvement as their leading priority, placing it above such strategically important activities as focusing on the core business, developing performance measures, and reducing costs.

The study assesses those requirements that the primary decision makers at 3PL companies consider vital to form an efficient supply chain and gain a competitive advantage. Over 55% of the respondents manage companies with more than 1,000 employees and over $250 million in annual revenue. Industry segments served include electronics, retail, automotive, and groceries; the functional areas most commonly outsourced are warehousing, logistics information systems, shipment consolidation, carrier selection, order fulfillment, and product returns.

As next in importance to customer service improvement, respondents – choosing from a list of 20 activities – cite increased supply chain visibility, improved operational efficiency, employment of e-commerce solutions, and response to market and competitive influences. The Tompkins researchers point out that integration and turbulence are the two major logistics challenges that businesses face, and that dealing with these issues involves taking a holistic view of the logistics network and being able to cope with the “continuous whitewater” of change in that network.

For more information, contact Tompkins Associates at 2809 Millbrook Road, Raleigh, NC 27616; phone (919) 876-3667; or visit www.tompkins.com.

short takes

For Good Measure Effective logistics measurement separates business leaders from laggards, contend the authors of a new study conducted by the University of Tennessee for the Council of Logistics Management. Called Keeping Score: Measuring the Business Value of Logistics in the Supply Chain, the report discusses the lessons learned from the logistics measurement programs of more than 350 companies. The majority measure some logistics activities, but few track information that would reveal how they perform from the viewpoint of customers and suppliers. A large portion of the respondents to the CLM survey do not measure invoice accuracy (48%), cycle time (38%), backorders (36%), line item fill (31%), customer complaints (23%), or on-time delivery (21%), although 55% cite customer complaints as being most important to the company, and 61% accord that status to on-time delivery. Furthermore, most logistics managers focus on the performance of internal functions such as warehousing and on individual activities rather than end-to-end logistics.

The study notes that evaluating logistics performance can provide considerable benefit. At 3M, for example, a measurement program brought about a major cost reduction in logistics over five years, and helped the company improve on-time delivery by 32% in three years. Modus Media International, a large manufacturer and distributor of computer software and manuals for high-tech companies, attributes its improved profitability to comprehensive logistics measures.

However, the obstacles to successful measurement are many. They include lack of commitment from top managers, outdated assessment strategies, contradictory and confusing standards, internal reluctance to share data, and disagreements about basic logistics terminology. (For instance, to some manufacturers, an “on-time” shipment is one that leaves the plant on a specified date; to customers, “on time” means the day they take possession of the goods.)

For more information, contact the Council of Logistics Management, 2805 Butterfield Road, Suite 200, Oak Brook, IL 60523; phone: (630) 574-0985; Web site: www.clm1.org.

short takes

Cheat Sheet Did you know that using an e-commerce system can expand your average order size by as much as 30%? Or that it can help you cut per-order costs to less than $1? These and other ways to use cyber solutions to your advantage are outlined in “E-Commerce Road Map,” a booklet published by Ironside Technologies. A crib sheet for the time-challenged – or just Web-phobic – executive, this handy little guide offers a quick rundown of the questions to ask before buying e-commerce software, ways to cost justify the often substantial investment (an invaluable step-by-step example helps you do the math on the spot), and methods to determine what kind of system you should buy and what features you can’t do without.

For more information, call Ironside at (800) 495-4766 or e-mail your request to information@ironside.com.