Warehousing and distribution are suddenly in the spotlight as critical elements of the direct commerce formula. Responsibility for distribution requires proactive and performance-oriented managers. When you’re up to your armpits in alligators, it’s hard to remember that your original objective was to drain the swamp. But in today’s competitive operating environment, you’ve got to be both an alligator wrestler and a sharp-witted escape artist.
Warehouse managers are often just the longest-tenured and/or hardest-working veterans of the warehouse. These days, a distribution center manager needs to be a well-rounded and strategically minded person. The best hires I’ve ever made were not necessarily the best qualified – if judged by their resumes alone – they just had “the right stuff.” They were able to keep a strategic focus while still effectively directing day-to-day operations.
It’s not for me Direct commerce operations managers must intuitively understand and focus on all of the tasks listed below:
Performance tracking. You simply can’t know how well your operation is performing without a dashboard of key indicators. At a minimum, the fundamental measurements for any operation to track include:
n direct labor cost per order,
n orders per labor hour by function,
n daily carryover,
n accuracy rate, and
n time to ship.
Any manager worth his or her salt must have these indicators in mind at all times. One of my pet peeves is a manager who responds to an inquiry about these indicators by saying, “I can get that for you.” They miss the point – it’s not for me, it’s for them. What separates pros from amateurs is their ability to identify and collect the necessary information.
Production management. Production management defines the workload, determines staffing requirements, tracks performance, and adjusts the staffing model or operating plan accordingly. The measurements listed above become the tools that effective managers depend on to manage production requirements, tracking the required statistics to know how a projected order volume breaks down by function. Managers define staffing requirements by dividing each department’s anticipated workload by the productivity standards actually being achieved in that area. A strong manager can identify backlogs when they begin to build and reallocate resources before the problem becomes serious.
Benchmarking. The best managers perpetually compare their operation to others and set new goals. True benchmarking means staying in touch with everything going on in the industry in terms of service standards, methods, systems, automation, and training.
Slotting and profiling. An effective distribution manager must ensure that every item is located in the right place and in the right-sized picking bin. Pick frequency and bin capacity – one week’s supply of an item – should determine location. Savvy location also minimizes the distances pickers travel. Top managers keep dedicated staff to monitor and adjust location assignments constantly.
Facility configuration. A manager should configure the facility to support current volumes and work characteristics, with a layout that allows effective workflow and uses fixtures and equipment options appropriately. The only way to monitor just how full the facility really is and to identify expansion requirements before it’s too late is to measure actual utilization of space through the number and percentage of available picking and reserve locations.
Order handling. Picking, packing, and shipping are the center of the distribution universe in direct commerce. This is where most of the labor is used. Different methods make sense for different types of orders and volume levels. A top manager must constantly evaluate picking methods, batching criteria, and automation to keep these processes as streamlined as possible.
Systems and technology. More and more advances in the distribution center depend on some sort of systems support. Every operation should be actively investigating to see whether and when implementing new technologies would make sense. Most managers in small to medium-sized operations have been encouraged to be ultra cost-conscious, and they therefore tend to be less likely to recognize opportunities for payback. Today’s leaders know when and where to look for new solutions, and they know how to justify them based on potential savings or performance improvement.
Leadership and organization. The best managers have the quality of being in touch with what’s happening on the floor without having to do it all themselves. They can build an operation that carries out these processes through joint effort and delegation. The best managers of the most advanced operations rarely break a sweat, because they have the ability to build an organization that is self-sustaining. Be careful if a candidate has a record of marathon hours and heroic efforts. While representative of high integrity and commitment, these might also be symptoms of weaker organizational skills.
The best of intentions The single most common failure we see in almost every operation we visit is that managers are unable to break out of the day-to-day battles and move the operation forward. They usually know what they need to do, but just never get around to it. The operation becomes stagnant.
Any results that occur just from showing up with good intentions are simply an accident. You don’t get a paradise like Oz without a wizard behind the curtain watching the dials and pulling the levers.