Performing a Holiday Season Fulfillment Center Post Mortem—Part II

This is the second of a two-part article. The first article dealt with conducting a post mortem review of the Christmas 2005 peak season. To read the first part of the story, click here

By now you and your peak-season fulfillment center review team have no doubt met to perform the post mortem. During this process, you probably created a list of what went right, what went wrong, and what to change.

If you’re upset that your list of what went wrong seems at least as long as your list of what went right, take a deep breath, and let’s look at some issues other direct marketers had on their list of problems and the actions they took to correct these issues.

At one company—let’s call it Acme Catalog–the list of what needed fixing was rather long. After much discussion, the team decided to address the issue of temporary help. They realized that finding and keeping qualified temporary help would drastically improve their chances of having a more productive Christmas season in the upcoming year.

Their review of the temporary help disclosed the following:

* Turnover of workers increased training time and decreased productivity. Only 39% of Acme’s temps lasted the entire season. Another 23% lasted just two to four weeks, and 17% stayed for less than three days.

* Absenteeism was highest on Mondays; as Acme’s DC was closed on Sundays, Mondays were the busiest days in terms of processing orders.

* Productivity varied from worker to worker and it took too long for many workers to reach the productivity levels budgeted.

* Workers would be hired as order pickers only to find they could not pick efficiently. The same was true for packers. This required constant movement from one function to another.

* The company had hired only a few workers who were stars.

* There was no motivation for workers to stay the entire Christmas season.

Reviewing the above list, the Acme review team decided they wanted to reduce temporary worker turnover, increase the number of workers staying until the end of the season, and hire only temporary workers that meet their standards. The team identified this as crucial to making the peak season successful. They knew without qualified workers, they would fall behind in processing and once behind it would be very difficult to catch up.

Like most other companies, Acme used a temporary agency to recruit and hire for the peak holiday season. Reviewing the process and documentation provided to the agency, the team discovered that they had failed to provide the temporary agency adequate job descriptions and requirements, desirable worker profiles, and worker key traits. Additionally, once workers were hired Acme failed to monitor the quality and productivity of their work, provide feedback to them how well they were doing, coach them how to improve, and reward them for their accomplishments.

The team worked with the temporary agency to develop and implement job descriptions and worker profiles. They also devised a math test, a number matching test, and a dependability test to use to screen potential workers. In addition, they created a one-page expectation sheet to give prospective worker that includes quality, productivity, and attendance expectations as well as work rules. The expectation sheet informs the worker was the company expects of them prior to accepting the position.

With the added company needs and worker requirements, the temporary agency knew what Acme wanted. The temporary agency was now held accountable for a poor hire, defined as a worker who did not last two days: Acme would not pay for any workers who stayed fewer than two days.

Acme also updated its temporary worker orientation program. It now included an introductory video of the facility, videos on picking and packing, and a first-day handout explaining expectations and procedures.

To better monitor and reward performance, Acme implemented two-day and one-week employee reviews to determine if the temps were meeting quality and productivity expectations. At the reviews, determinations were made to counsel, relocate, or ask to leave.

The company implemented an an attendance incentive bonus program as well. Workers earned an additional $0.50 an hour for each hour worked to be paid out only at the end of the season. To receive this attendance bonus workers had to work until the end of the season. In addition, weekly drawings were held awarding workers for perfect attendance. The following year went smoother. The extra time planning paid back in dividends, a more productive Christmas season. To continue the momentum, Acme adopted a continuing and neverending improvement attitude. As I write this article, Acme is working on improving the upcoming Christmas peak season, repeating the same process. One constraint it wants to change is its dependency on a temporary agency.

One thing’s for sure: Once you remove one constraint, another will take its place. Another thing’s for sure: Christmas will come the same time next year, and you will not be able to move the date because you are not ready. What kind of Christmas season in the fulfillment center will you have in 2006?

Wayne Teres is president of Framingham, MA-based operations consultancy Teres Consulting.