Hanesbrands closing DCs

Apparel manufacturer/marketer Hanesbrands, whose catalogs include Champion and One Hanes Place, wasted little time following through on its pledge to cut costs. On Oct. 13, eight days after it spun off from Sara Lee Corp., Winston-Salem, NC-based Hanesbrands announced plans to shut down a distribution center in Weston, FL, and to consolidate two warehouses in Winston-Salem into a third facility in nearby Rural Hall, NC. The 267,000-sq.-ft. Florida facility is expected to close by March 2007; 79 jobs will be lost. The 446,000-sq.-ft. Rural Hill facility, meanwhile, will be upgraded to handle the additional workflow.

Survey says…ops salaries up slightly

If you’re a vice president of logistics, you may be earning more than your operations co-workers but you may have received a smaller raise, at least according to 2006 Warehousing Sales and Wages guide from the Warehousing and Education Research Council (WERC). This year the average salary of a vice president of logistics was $151,250, says WERC, up 2% from $147,625 in 2004. But directors of logistics had it worse: Their average salary declined slightly, from $138,500 in 2004 to $138,000. Lower-level warehouse employees fared somewhat better in terms of pay increases. The average warehouse worker’s pay increased 4.8% from two years ago, while customer service representatives saw an average increase of 4.7%, shipping/receiving clerks 4.5%, forklift operators 4.2%, and order filler/pickers 3.5%.

Growth of imports from China soars

The increase of imports from China outpaced that of imports from any of the United States’ 223 other trading partners. According to a study by Atlanta-based research firm Colography Group, in terms of sheer weight imports from China rose more than 19% last year, to 129.6 billion pounds. The value of those imports climbed more than 24%, to $235.2 billion. By contrast, total U.S. import tonnage, including from China, rose by 4.2%. Import value increased 15.1%, largely due to the run-up in petroleum prices.


Office Depot eliminates 250 jobs

Boca Raton, FL-based Office Depot will eliminate about 250 contact center jobs over the next four months, according to spokesperson Melissa Perlman. The office supplies cataloger/retailer will “redeploy” the displaced employees in other parts of the company, she says. Last April, Office Depot cut 100 contact center jobs. The move reflects shifting priorities for the company, whose titles include the Office Depot Big Book and the Office Depot Furniture Book. In the past year the marketer has increased its sales $1.2 billion as it renewed focus on international sales and acquired smaller companies.

Amazon launches fulfillment division

Amazon.com in September launched Fulfillment by Amazon, a pick, pack, and ship service. Businesses that sell via Amazon can send their products to one of the Seattle-based behemoth’s fulfillment centers. Amazon will store those products and fulfill consumers’ orders. The company will also manage customer returns and refunds for participating businesses. Amazon charges the sellers a handling fee of $0.50 per item plus $0.40 per pound and a storage fee of $0.45 per cubic foot per month. Amazon is also allowing consumers who are members of its preferred shipper program, Amazon Prime, to enjoy the same benefits on purchases, including free two-day shipping, from Fulfillment by Amazon sellers as they do on Amazon.com purchases.

Godiva Chocolatier gears up for direct

Due to growth in its direct business, Godiva Chocolatier signed a six-year extension with Huntersville, NC-based fulfillment provider Accretive Commerce to support its catalog, Internet, and corporate businesses. Accretive will manage customer care, fulfillment, account management, and IT. Godiva, which ships about 600,000 orders a year, is expected to make investments in technology, process engineering, and infrastructure, including development of a temperature-controlled fulfillment facility.


Nordstrom expands Cedar Rapids DC

Nordstrom plans to expand its Cedar Rapids, IA, fulfillment and contact centers, which coincides with the Seattle-based merchant’s updating of its direct business’s inventory systems. Pending approvals, Nordstrom’s multimillion-dollar expansion will nearly double the square footage of the facility, adding 258,000 sq. ft. to the current 320,000 sq. ft. The expansion will create room for more than 500 additional jobs in both the fulfillment and contact centers; it marks the second expansion for the company in Cedar Rapids since opening there in 1997. The project is contingent upon the Airport Commission’s approval of land option changes, as well as Cedar Rapids City Council’s approval of funding through tax increment financing.

Transportation exec gets political

A transportation industry executive is making a Congressional push to unseat a 30-year career politician. Michael Erickson, the president of Portland, OR-based AFMS Transportation Management Group, is running in Oregon’s Fifth Congressional District as the Republican challenger to Democratic incumbent Darlene Hooley. Erickson says his run is largely in response to Washington’s ineffectiveness: “There’s too much partisan politics, too much bickering, and not enough solutions. Change will only come when new people with fresh, innovative ideas are elected to Congress.” If elected, Erickson says, he wants to eliminate waste, cut costs, and meet people’s needs more effectively. An enticing platform for any industry — particularly operations.

Ready for wireless voice-recognition?

Pittsburgh-based software supplier Vocollect has upgraded its wireless voice recognition headset for use in areas such as the distribution center. Instead of relying on paper lists or a handheld device’s display screen for instructions, a workforce management system uses speech prompts to dictate tasks. Say a pallet needs to be moved from the staging area of the warehouse. A worker, taking a voice-directed cue from the system into his headset, moves the pallet to the appropriate area and then speaks a phrase such as “task complete” into the headset.


The DCs of Madison County

The novel The Bridges of Madison County may have put Madison County, IA, on the map, but Madison County, IL, is gaining attention for being a hotbed for distribution centers. Just east of St. Louis, the county is home to the Gateway Commerce Center, a $250 million, 7.5 million-sq.-ft DC. Another facility, owned by Panattoni Development Co., is under development on a 600-acre site a few miles away near Edwardsville, IL. Clayco, which has built facilities for Coldwater Creek and Touch of Class, has a DC in the works in nearby Dupo, IL. What’s the draw? Illinois has relatively inexpensive land and affordable real estate taxes. Madison County, with access to four major Interstates and three major rivers, is within a day’s drive of 60% of the U.S. population. Just don’t look for the covered bridges.

Survey unveils facility standards

A survey of 100 retail and related companies by Raleigh, NC-based supply chain consultancy Tompkins Associates reveals some interesting facts about distribution center operations and configuration, as well as best practices.

For instance, 63% of all products are still stored by way of floor bulk and single-deep pallet racks; 43% of the businesses have moved to highly automated operations, while only 14% remain highly manual; 46% of cross-dock labeling is done by suppliers; 55% of inbound orders are planned against advanced shipping notices; and 60% of operations have a sorter to support either picking or shipping.

Overall, the survey found that customer demand, technology leaps, product mix, transportation costs, and even management styles drive changes in distribution centers.

New LCL service from China

APL Logistics and Conway Freight have launched OceanGuaranteedSM, a service providing less-than-container-load (LCL) shipments from China to the U.S. The program will provide “port to door” guaranteed service from Hong Kong, Shanghai, and Shenzhen to all continental U.S. destinations served by Con-way. Pricing will be calculated on a per-kilo rate, based on delivery from the Chinese ports to 11 delivery zones in the U.S.


How Calyx & Corolla packs ’em in

When shipping “live” product such as plants, packaging is crucial. That’s why flowers merchant Calyx & Corolla more than a year ago developed Weather Wrap packaging to protect its flora from the elements. Calyx & Corolla, part of Shelburne, VT-based Vermont Teddy Bear Co., describes the Weather Wrap as giving “flowers superior insulation by maintaining temperature in hot or cold while cushioning your flowers during shipping.” No more limp lilies or crushed carnations, which makes the customers — and the cataloger — happy.

A smarter, costlier RFID

We’ve all heard about the power of RFID; we’ve also heard how few merchants are investing in it. So we don’t expect marketers to race to adapt RFID “smart tags” — intelligent barcodes that can “talk” to a networked system to track every product through the supply chain, according to Raleigh, NC-based consultancy Tompkins Associates. The full incremental cost of a typical smart tag is about $0.65-$0.70 per carton, with equipment costs amortized over three years, says Tompkins principal Paul Faber. But smart tags help reduce out-of-stocks and shrinkage, he adds, which reduces the cost of moving product through the supply chain.

Ecometry injunction denied

A Florida court on June 20 denied an injunction in a copyright infringement suit brought by Delray Beach, FL-based catalog management systems provider Ecometry Corp. against Uniondale, NY-based rival Profit Center Software (PCS). Ecometry alleged that PCS engaged in copyright infringement by gaining unlawful access to Ecometry’s MACS software source code and using it to introduce competing software. Ecometry had filed the suit on Jan. 25. PCS is owned by Port Washington, NY-based manufacturer/marketer Systemax. Undeterred, Ecometry is proceeding with its lawsuit. “The only thing that’s been denied here is the injunction,” says Ecometry president/CEO John Marrah.


Sigma Micro to acquire Quark Commerce

Indianapolis-based software provider Sigma Micro agreed to acquire the intellectual property of Quark Commerce software from Denver-based Quark. Under the deal, Sigma Micro will acquire the application code and supporting documentation, hire key product personnel, and support the current users of Quark Commerce software. Quark Commerce, now known as the Sigma Commerce Suite, helps customers manage the flow of information regarding orders, inventory, and shipments between platforms and databases. The suite is built on a Microsoft platform and will leverage the .NET work that Sigma Micro has already completed.

Crate & Barrel on the move

Northbrook, IL-based housewares and furniture merchant Crate & Barrel is adding 200,000 sq. ft. to the distribution center that houses its furniture offerings. The Crate & Barrel campus in Naperville, IL, sits on 23.5 acres. The facility — which handles the company’s shipments spanning the country from Colorado through Ohio — also accommodates the Land of Nod children’s furniture business and CB2, which sells home furnishings targeting young adults.

West Marine’s DC gets vocal

Boating supplies cataloger/retailer West Marine is using voice-enabled technology in its Hagerstown, MD, distribution center. The system — VoiceLogistics Express from Lawrenceville, NJ-based Voxware — helps West Marine enhance picking accuracy and productivity and get temporary workers up to speed. (About 30% of West Marine’s workforce is temporary.) Voxware guarantees verification of where the worker is in the warehouse; what is about to be picked and in what location; how many to pick; and where to put them. This information is available exactly when and where it’s needed by the worker and is accurately verified.


Who ya gonna call?

Is your distribution center so loud that you can’t hear yourself think? Behold the NoiseBuster from Fort Pierce, FL-based Pro Tech Communications. This electronic noise cancellation (ENC) headset protects workers against low-frequency noise consisting of powerful sound waves that can travel great distances and can’t be absorbed by conventional passive materials. Noises generated by engines, fans, motors, and other similar devices are typically dominated by low frequencies that cannot be stopped by passive earmuffs. The NoiseBuster ENC Earmuff is powered with a battery that provides 65 hours of use.

A kinder, gentler, forklift

Do your forklift operators sometimes mistake your distribution center for the bumper cars in an amusement park? Your packages and warehouse equipment can take a beating if overzealous forklift drivers are constantly tapping them. Fork-Kushions from Alsip, IL-based Kastalon protect your packages and provides a level of extra protection from marring and denting by encasing the truck’s forks with polyurethane bumpers. Fork-Kushions are mounted directly to the upright face of the fork using specially designed permanent mounting brackets.

Interlake Material Handling sold

Merger and acquisition activity isn’t limited to the likes of marketers such as Home Depot and Redcats USA. On April 21, Interlake Material Handling was purchased by United Fixtures Co. The transaction is valued at $44.1 million, plus the assumption of Interlake’s pension liability. The combination of Interlake and United Fixtures creates by far the largest player in the North American racking industry. Interlake is a manufacturer of industrial racking for retail, distribution, and warehouse applications in North America. United Fixtures is a portfolio company of investment management firm Wynnchurch Capital.


Musician’s Friend expands

Musician’s Friend, the catalog/Web subsidiary of Westlake Village, CA-based Guitar Center, will break ground on a 702,000-sq.-ft. fulfillment center in Kansas City, MO, later this month. The new facility will replace its current 250,000-sq.-ft. facility, also in Kansas City. The musical instruments and equipment merchant is expected to employ more than 500 workers when the facility is completed in 2007. Musician’s Friend, which mails more than 18 million catalogs, had $311.3 million in direct sales in 2004.

FedEx Freight raises rates

Less-than-truckload (LTL) parcel carrier FedEx Freight raised its rates 5.95% on April 24. This general rate increase applies only to FedEx Freight, a subsidiary of Federal Express. The increase will apply to interstate and intrastate traffic and to selected shipments between the United States, Mexico, and Canada. Various additional adjustments will include minimum and access charges as well as additional adjustments in select service areas. Factors contributing to the general rate increase include increasing highway tolls and access fees and more expensive, environmentally-responsible equipment.

Expect to see more home-based agents

Research firm IDC predicts that the number of home-based agents will triple from 112,000 in 2005 to 300,000 by 2010. Art Hall, vice president of sales and customer care operations for Alpharetta, GA-based financial services firm NetBank, cites technology enhancements and increasing oil prices as macroeconomic drivers that make working from home attractive. But if you hire home-based contact center agents, keep in mind the need to protect and manage the data from hackers. Also, home-based agents require different management strategies than those working from your contact center and may suffer from a lack of focus while working at home, or what Hall calls “the Oprah factor.”


Should disaster strike

Nashville, TN-based supply chain solutions provider Fortna in early March completed its implementation of a disaster recovery plan that provides data and e-mail redundancy for business operations. This increases stability for its internal IT infrastructure and safeguards its data from unforeseeable situations. Fortna’s IT staff configured an off-site redundant data center with data mirroring that processed and stored in its central data center. This allows Fortna to continue to deliver projects and support its clients without re-creation time or interruption of schedule. In case of disaster, Fortna can switch over to the off-site datacenter and immediately access all business and support data and maintain the full e-mail functionality normally available through the central data center.

Bean’s code green

Generally speaking, this winter didn’t produce record snowfall amounts in the Northeast, but Freeport ME-based outdoor gear, apparel and home goods mailer L.L. Bean is prepared for the worst. In cases of severe weather, Bean declares a “code green” day, meaning everyone who can get to Freeport is asked to do so. Employees are put to work in areas where they have been trained to fill in, such as restocking the retail store, helping out in the distribution center, or taking phone orders. The code-green policy helped out in February, when Bean endured a pair of winter snowstorms that pounded coastal Freeport.

Block & Co. pallets seeing a shrink

To save its workers the time and effort of wrapping a pallet in plastic, Wheeling, IL-based money-handling supplies merchant Block & Co. last year purchased two stretch wrapper machines that shrink-wrap pallets going to retail stores. According to Joel Sopoci, manager of distribution center operations, the machines do the work of three men. The stretch wrappers, from Louisville, KY-based Lantech, cost about $17,000 each.


Datavantage buys CommercialWare

Natick, MA-based CommercialWare was sold on Feb. 1 for $13.2 million to Cleveland-based Datavantage, a subsidiary of Micros Systems. Datavantage supports retailers with store systems, business analytics, and marketing applications; CommercialWare’s applications link all aspects of the transaction lifecycle through point-of-sale, back-office, order management, fulfillment, and customer service. CommercialWare subsidiary OrderMotion is not part of the deal. Ernie Schell, president of Ventnor, NJ-based operations consultancy Marketing Systems Analysis, says CommercialWare’s installed base should not notice any difference in the near term. “As for the future, CommercialWare’s original direct marketing order management system, CWDirect, will be the most valuable part of the acquisition.”

Chilly DC? Try an air rotation system

Heating a distribution center during a cold winter can be expensive. Because warm air rises, much of that heat is lost through the roof. Steve Harris, a principal in Lincoln VT-based operations consultancy Harris and Harris Consulting, says that air rotation systems are the least expensive way to heat a DC. The system draws in cool air at floor level and releases it higher up in the facility to mix with the hot air. This creates an airflow pattern that forces warm air back to the floor level and distributes heat evenly throughout the DC. Facilities can supplement the air rotation system with destratification fans, which help push the warm air down toward the floor. A good rule of thumb, Harris says, is to place one destratification fan for every four light fixtures.

PC Connection calls on Texas

Merrimack, NH-based PC Connection Sales Corp., part of the $1.4 billion PC Connection, plans to open a contact center in Addison, TX, in the Dallas metropolitan area, this month. The center will provide continued expansion of PC Connection’s managed-account telesales business. The company hopes the location — its first outside of the Northeast — will help it recruit IT sales professionals. PC Connection Sales Corp. has other contact centers in Merrimack, Keene, and Portsmouth, NH, and Marlborough, MA.


Bean to get bigger

Apparel, outdoor gear, and home goods merchant L.L. Bean plans to expand its 660,000-sq.-ft. Freeport, ME, distribution center by 50%. Spokesperson Rich Donaldson says the $32 million project should be completed by holiday 2007. This will allow the marketer to expand its mail order division as well as its retail replenishment division.

Is online service slipping?

While more holiday sales came online, a survey from Chicago-based consultancy The E-tailing Group indicates that marketers still have a way to go when it comes to online customer service.

With respect to customer service information, the secret-shopper survey found that toll-free phone numbers, which E-tailing Group president Lauren Freedman considers a “must have” feature, were present on 93% of the sites visited during the fourth quarter of 2005, compared with 95% of the previous year’s sites. The presence of a guarantee dropped to 62% from 71% in 2004. Just 88% offered 100% satisfaction in 2005 vs. 93% the previous year. The presence of FAQs dropped from 84% to 73%.

Despite an extra day on the pre-Christmas calendar, holiday shipping deadlines were earlier. Only 15% of the sites surveyed extended standard shipping cut-off dates beyond Dec. 19 compared with 23% in 2004.

“Despite double-digit sales growth, merchants must remain vigilant and keep customer service top of mind, as consumers have long memories,” Freedman says.

OfficeMax opens supersize DC

Itasca, IL-based OfficeMax has opened a 120,000-sq.-ft. distribution center. The Aurora, IL, facility is nearly three times larger than OfficeMax’s previous DC, also in Aurora. “We simply outgrew our previous location and needed to move to a larger location to maintain an efficient system of servicing our customers,” says Scott O’Farrell, general manager of OfficeMax’s Denver distribution center. The new facility serves OfficeMax’s business and retail customers in New Mexico, Colorado, and Wyoming, along with those in parts of Utah and Nebraska, delivering office supplies daily.


The right staff

Coping with chronic absenteeism or apathy among your warehouse employees? It could be that they’re simply not the right people for the job. A technique called targeted workforce location and recruiting (TWLR) works wonders in matching job requirements with suitable workers, says Ned Bauhof, a principal at logistics consulting firm St. Onge Co. in York, PA. One firm that was looking for warehousing employees mailed employment information to households analyzed by distance from the facility (no more than 12 miles), current employee profile data, and job functions. Following this $11,000 investment, which came out to $91.66 per employee hired, the company was swamped with responses from qualified candidates — so much so that it stopped other advertising campaigns after three weeks.

Growth spurt

After nearly five years of stagnation, the warehouse management system (WMS) market surged to $1.07 billion last year and could reach $1.4 billion by 2009, reports ARC Advisory Group. ARC analyst Steve Banker says that WMS spending was artificially propped up in the mid- to late 1990s by the Y2K scare and the dot-com frenzy. When the tech sector nosedived, the WMS industry followed suit and is only now starting to recover. Of particular interest are systems that are different in what Banker calls their “material handling style.” These WMS programs, he says, manage equipment that’s a snap to put together and can be reconfigured if necessary.

Weight watchers

Distribution facilities take care to place popular items in storage locations that are easy to reach but often ignore product weight considerations, notes consulting firm Lincoln Technology Corp. For maximum employee safety, the optimal zone for the heaviest items is a shelf height of 66″, say the Lincoln analysts; a height of 18″ is acceptable for light items used rarely, and a height of 42″ is adequate, although not ideal, for heavy items. Shelves or other storage equipment measuring 96″ or more in height should be reserved for light items that can be placed at the edge for easy access.


Right direction

The Supply Chain and Logistics Directory, newly released by the Council of Supply Chain Management Professionals, is a directory with a difference. Almost a third of the 90-page book is given over to an in-depth discussion of how to find, evaluate, and hire a consultant — and when you may not need one. You’ll even find tips on how to prepare a proposal and manage a project team. Consultant listings are arranged in three ways: alphabetically, by area of expertise, and by state. The book is available for $79.95 at www.cscmp.org.

Online mojo

Small businesses believe they pack more punch if they have a robust Website, according to a survey of 780 small enterprises conducted by consulting firm Interland. Seventy-eight percent of the respondents who have Websites attribute their financial health and competitive advantage to the Web; 76% say their sites generate business leads; and 57% receive monthly revenue from e-commerce sales or offline purchases influenced by the site. But although 55% of respondents say simply having an online identity is most important to them, only 24% accord great importance to actually conducting Web transactions.

Clear clutter

Tired of all those overstocks gathering dust in your warehouse? There’s a great way to turn that excess inventory into profit. Check out the National Association for the Exchange of Industrial Resources (NAEIR), a Galesburg, IL-based group that not only can free you of overstocks by donating them to charity but can also provide tax relief by invoking exemption 170(e)(3). Under this clause, regular corporations can deduct the cost of the inventory donated plus half of the difference between cost and fair market value, up to twice the cost. Other enterprises such as (S) corporations, partnerships, and sole proprietors are eligible for a straight-cost deduction, which is more advantageous than selling excess merchandise to a liquidator. You can reach NAEIR at 800-562-0955 or [email protected].


Fulfilling growth Executives in the fulfillment business have reason to feel fulfilled: The Mailing & Fulfillment Service Association reports that its members’ revenues were up an average of 12.5% in 2004 from the previous year. Firms in the North Central region of the U.S. enjoyed the highest sales growth, 16.3%. Gross and net profit as a percentage of sales both climbed last year, while return on net worth rose to 19.7%, and return on assets increased to 7.4%. Other aspects of the fulfillment business that posted strong growth include per-production-employee measures of sales, gross profit, and assets. — RR

NLRA confidential

Chances are you haven’t taken a close look at your company’s confidential information policies and agreements recently. The sooner you do so the better, advises Dallas-based law firm Jackson Lewis LLP. In a recent decision by the National Labor Relations Board (NLRB) in the case of Cintas Corp. (344 NLRB No. 118), the board found that the company’s policy relating to employees’ nondisclosure of confidential information violated the National Labor Relations Act. The NLRB’s reasoning was that the wording of the policy could be interpreted as prohibiting employees from discussing the terms of their employment with co-workers or others. — RR

Surf’s down

Is your Website easy to use? It had better be if you want shoppers to stay long enough to make a purchase, according to a survey by Chicago-based Web hosting provider Hostway Corp. More than 70% of the respondents said they’re unlikely to purchase from, or even return to, a Website after encountering a “pet peeve.” And you’re unlikely to ever find out what that peeve is, since only 25% of shoppers take the trouble to tell merchants what annoys them. But common irritants include pop-up ads, the need to install extra software, dead links, confusing navigation, and slow-loading pages. You’re also better off avoiding cutesy touches: Moving text, for instance, was a pet peeve of 59% of the survey respondents. — MW


OSHA reform?

Four OSHA reform bills that the House of Representatives passed in July should make it easier for employers to comply with workplace safety rules. If the measures make it through the Senate, businesses will benefit from exceptions to rigorous enforcement of OSHA citation filing deadlines (H.R. 739), speedier case reviews (H.R. 740), interpretation and review of cases by an independent commission (H.R. 741), and more-thorough evaluations of cases by OSHA attorneys before enforcement actions are brought against businesses (H.R. 742). The legislation will be up for Senate approval this year.

Taxing proposal

Last month local governments came a step closer to getting a uniform tax system for direct merchants. Eighteen states voted to implement the Streamlined Sales and Use Tax Agreement on Oct. 1. The agreement doesn’t require direct merchants to collect and remit local sales taxes in jurisdictions in which they have no nexus, or physical presence — but some companies are expected to voluntarily comply. And the creation of a simplified system by the states could encourage Congress to pass a use-tax law that would overturn Quill v. North Dakota, the Supreme Court ruling that protects merchants from collecting taxes where they have no nexus.

Moving day

At least two catalogers are packing up their boxes this summer. Over the July 4 weekend, Oshkosh, WI-based housewares and gifts mailer Miles Kimball Co. left a building that dates back to the 1800s to move into a 74,000-sq.-ft. office facility downtown and a 293,000-sq.-ft. production and distribution plant, also in Oshkosh. The company will sign a 10-year lease for the new space, with two expansions likely during that period. And Delray Beach, FL-based reading accessories mechant Levenger has begun moving in stages from its 160,000-sq.-ft. distribution center in Delray Beach to a 250,000-sq.-ft. facility in Memphis, TN. The move, most of which will be finished in time for this year’s holiday season, is expected to reduce the average time it takes for an order to go from the DC to its destination by about one day.


Happy returns

As you gear up for the holidays, here’s a tip on returns handling from May’s Annual Catalog Conference. Use incentives to smooth the process, said Elisa Lowry, vice president of operations at Venus Swimwear/Winter Silks, a cataloger in Jacksonville, FL. “The service level for Venus is to have all returned packages on dock processed within 48 hours,” Lowry said. “To meet this service level, each employee is held to minimum productivity standards.” The incentive pay should be in place for all returns handling jobs, as well as for supervisors and leads. “We pay the supervisor the average incentive earned by the returns processors,” she said. “By getting the supervisors involved in the incentive pay, it makes the evaluation of all employees objective.”
Margery Weinstein

Package deal

Want to encourage your customers to go green? Check out what home furnishings cataloger/retailer Crate & Barrel does. In a package one of our staffers received recently, the Northbrook, IL-based company had enclosed postcard-size notices that said, “Please Don’t Throw Away This Packing Material.” The dunnage in question, 100% recycled polystyrene Flo-Pak loose fill peanuts, can be saved for the shopper’s personal use, the notes explained, or dropped off at a local Peanut Hotline collection location. The customer can call a toll-free number listed on the card to find businesses close to home that will recycle the peanuts.

On the move

If you’re a wholesale distributor, you’re in luck. Your industry has enjoyed a long-overdue turnaround, reports Philadelphia-based Pembroke Consulting. Wholesalers and distributors raked in sales of $3.2 trillion last year, a 14% increase over their 2003 total. Next year, revenue will grow 7.7%. But expect to spend a ton of money as well. “Distribution is one of the most technology-intensive industries, accounting for one of every five dollars spent by U.S. businesses on computer hardware and software,” says Pembroke president Adam J. Fein, Ph.D. He estimates that the wholesale distribution industry will lavish more than $80 billion on computer technology by 2008.


Get engaged!

Your employees don’t have to marry their jobs, but they should be engaged with them, counsels Roger Herman of The Herman Group, a management consulting firm in Greensboro, NC. Employees who are not fully engaged with their work — as in giving it industrial-strength dedication — could be costing their companies a considerable amount of money. Herman cites a recent Gallup survey showing that “actively disengaged” workers cost the United States more than $3.6 billion a year in lost productivity. What’s more, only 23% of these disgruntled workers plan to remain with their employers for the next 12 months.

Lip service

Is yours a performance-driven company? Chances are, it says it is. But the employee “performance” it likely measures is merely the successful completion of assigned tasks rather than the quality of those tasks. An estimated 73% of companies use task completion as the only indicator of a worker’s success, reports a survey by Boston-based research firm AberdeenGroup. Fewer than half (46%) measure growth in skills or knowledge from the previous evaluation. Only the most dynamic pay attention to such criteria as employee productivity, contribution to corporate revenue, and attitudes toward work and the firm.

‘R’s take the lead

Revenue growth and customer retention top the agenda of small businesses this year, reports a study by online service provider Interland. Respondents say the three immediate threats to the success of small and midsize U.S. businesses are rising inflation (44%), the trade deficit and the collapse of the dollar’s value (40%), and energy and other supply shortages (40%). The group identifies the three greatest strengths of U.S. businesses as technological leads and strong productivity (49%), a democratic government (46%), and a flexible economy and labor force (39%). Seventy percent say e-mail is critical to their operations; only 14% don’t use e-mail in their business. Other important business tools include community relations (55%), Websites (47%), and direct mail (26%).