Ten Steps to Slashing DC Costs

Apr 05, 2006 9:33 PM  By

Distribution center managers are always looking for new ways to cut costs and improve performance. But simple solutions are not always obvious, so we’ve listed a few tricks of the trade. Deploying just one of the changes listed below, you could save thousands of dollars a year.

–Set Goals and Measure Results
Your people can’t improve if they don’t know what you expect. Set quantitative goals for each production area of your facility and objectively measure performance. You can start with general area goals, such as order per hour for the packing area, but ideally you want to measure performance down to the individual work function and finally to individual performance tracking.

–Cut down your walking
Find ways to reduce steps in your facility. Pick more than one small order at one time, or pick single line orders together. Arrange stock so that you walk less, and pass more pick faces (using flow racks, for example).

–Make performance fun
Give your people an incentive to achieve a particular result – and it doesn’t always have to be cash. For example, award movie tickets to the team if they achieve a difficult milestone on a heavy order day.

–Compress your storage
Look over your storage areas and identify opportunities to store things more compactly. Consider creating more locations where there is space, or using totes to better organize loose materials.

–Make the picker’s job easy
Make sure that your location labels are easy to read and not worn out. Highlight location information on your pick lists so that it stands out from the rest of the line information.

–Get rid of fixed work assignments
Establish methods to permit workers to “float” from one area to another based on dynamic demands. Use supervisors and team leaders to actively manage assignments.

–Make the workplace clean and bright
Don’t underestimate the value of good, bright lighting, and a clean facility.

–Solicit ideas from workers
Encourage your team to provide ideas on improving their day-to-day job performance. No one is better qualified based on experience. Provide incentives for good ideas, and recognize good ideas publicly.

–Find and Fix Bottlenecks
View your facility as if you were a stranger and look for areas where work is inefficient. For instance, you might have crowded aisles or packing areas, workers competing for a particular location or area of floor. Figure out how to overcome these problems.

–Tell a good news story every day
Complaints outnumber compliments 100 to 1. Try finding a piece of good news – a happy customer, someone who helped out in a pinch, a strong team effort, and compliment that person or group. Let your people know that they are appreciated.

Sam Flanders is president of Portsmouth, NH-based consultancy Warehouse Management Consultants