Global Logistics and Supply Chain Strategies - October 2008 - (Page 52)

“the warehouse becomes less of a traditional distributor and more of a valueadded service provider.” With leaner inventories comes a need for greater visibility. Jacobs says companies are demanding more information about the location and nature of their products. In the food business, there’s a critical need for product code dates, so that suppliers can identify the precise source of contaminated goods in the event of a recall. Responsibility for keeping track of that information falls squarely on the warehouse, he says. Warehouses also must deal with the ever-changing nature of today’s consumer goods. San Francisco-based Method Products Inc. is a fast-growing maker of environmentally friendly cleaning supplies. of customer solutions and implementation with Brentwood, Tenn.-based OH Logistics. OH Logistics also must deal with varying labeling requirements, depending on the product’s ultimate destination. Target Stores carries Method’s entire product line, notes Tasner, but the company sells to many other big retailers, including Costco, Whole Foods, Safeway and Canada’s Shoppers Drug Mart. Each has its own set of labels that must accompany all shipments. Still a small company, Method relies on the OH Logistics warehouse management system known as Accuplus, a low-end application with basic functionality. The tool uses the internet to supply customers with crucial inventory data. Picking is opti- By postponing receipt, “the warehouse becomes less of a traditional distributor and more of a value-added service.” — Wilson Rothschild of Infor Founded in 2001, the company is constantly changing its product mix and experimenting with new items. Picking strategies at its four U.S. distribution centers must change accordingly. “We’re constantly reinventing ourselves,” says senior director of operations Paul Tasner. “We don’t get a chance to settle into a relationship with a third-party logistics provider and work out the kinks that one encounters over a matter of years with a mature product, and predictable turns and volumes.” At three of its four DCs, the company’s 3PL is Ozburn-Hessey Logistics. It must reevaluate pick fronts and putaway locations on a quarterly basis at the minimum, says logistics director Jason Bowman. Complicating matters is the growing use of justin-time fulfillment strategies within the consumer products industry, as suppliers struggle to improve service while minimizing inventory levels. “We have to understand the velocity of their product, and slot it appropriately to reduce travel distance [within the warehouse],” says Mike Honious, vice president mized mostly by way of calculations on Excel spreadsheets. Bowman says Method hopes eventually to graduate to a more sophisticated WMS, such as OH Logistics’ Synapse. Focus on the Workforce Information systems and picking techniques aren’t the only things under scrutiny in modern-day warehouses. Improved labor-management strategies are playing a key role in boosting efficiency. OH Logistics has initiated a program called Operational Excellence for more than 30 of its accounts nationwide. The effort involves the measurement of work tied to productivity standards, based on time studies conducted by industrial engineers. Management works closely with labor to ensure maximum performance and find new ways of enhancing productivity. “It’s not just a reporting tool,” says Honious. “It’s a whole cultural change.” Labor management is at the heart of the application acquired by DSC Logistics from RedPrairie Corp. Headquartered in Des Plaines, Ill., DSC provides a variety of sup- ply chain services to major customers around the country, including Wal-Mart Stores. It already had an internally developed WMS but needed a labor management component, says Jim Chamberlain, director of industrial engineering. Following an intensive look into all aspects of its warehouse operations, DSC acquired the RedPrairie DLx application. “We had a lot of good, bad and ugly going on,” says Chamberlain, adding that the company developed a detailed series of best practices for labor performance before installing the applicable software. Waukesha, Wis.-based RedPrairie helped out from the start. “They worked with us to determine what the best practices would be,” says Chamberlain. “We gained 500 installations’ worth of experience that they came to the table with.” DSC ended up with discrete standards for each function in the warehouse. Previously, it could only measure a worker’s performance on the basis of pallets or cases processed per hour. Now DSC knows the quantity, weight and cube of each item, the distance traveled by the worker to reach it, and the amount of horizontal versus vertical storage. “Everything that makes an order simpler or more complex is factored in,” says Chamberlain. DSC tweaks its best practices in line with actual experience. They are reviewed with managers and workers on the floor, Chamberlain says, “to get their feedback on whether there is a better mousetrap.” The company has gone live with the DLx software at 18 of its 30 facilities. The result has been an increase of around 15 percent in variable labor performance. Jim Le Tart, director of marketing with RedPrairie, says software alone won’t solve warehouse productivity problems. “The technology really only records what’s going on,” he says. “It’s the process improvement that is the focus.” The use of engineered labor standards, he adds, can improve the productivity of many warehouse operations by 20 to 30 percent. Even so, many warehouses have been slow to adopt engineered standards. One reason, Le Tart suggests, is the extensive up-front work that is required to define best practices and standards. Another is the fear that employees will rebel against the strict performance measures that are part of such systems. “Actually, the opposite is the case,” says 52 OCTOBER 2008

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Global Logistics and Supply Chain Strategies - October 2008

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