Wholesale & Distribution International - Fall 2017 - 9

ASKING QUESTIONS
After I brought out my team to do a facility walk-through and observe the business' operation, I asked the owner three
simple questions:
1. When was the last time his team
challenged their workflow processes to better align around how their
business was organized today, especially with the growth of eaches and
smaller orders?
2. Have you ever analyzed your actual
fork truck movement to help you understand if your slotting was set up in
an optimal manner?
3.What changes has the team made
these past two years to improve
overall worker productivity in the
order fulfillment picking process?
He said his team last really dissected their workflow processes about 24

months ago when they implemented a
new warehouse management system
within their enterprise resource planning solution. I asked him if his business
changed over the past 24 months, and of
course, it had.
Now, all the company's customers were
receiving smaller orders with greater frequency. The owner smiled and said that
virtually all his customers were being given
vendor managed inventory contract treatment, with limited contract or purchase
minimum commitments. He admitted
that his cost per line item had increased,
primarily because of the increased number of smaller order line item picks. These
smaller orders were also causing the team
to spend extra operational focus on the
waving/batch picking process and bundle
additional assignments to provide longer-duration worker assignments.
The growth of smaller orders was also
creating new issues at the outbound
staging dock, which was creating higher truck turn times and increased lost
product because of space organization
challenges. The company's overtime has
increased by 20 percent this past year to
keep up with the growth. This was an area
he thought should be prioritized in order
to provide quick results. Fortunately, our
conversations were focused on reducing
margin leakage.

LOOKING AT PROCESSES
I continued to probe the owner on the
process that impacted almost 60 percent
of his workforce - the picking process. I
asked him to tell me what they currently
did differently in this area versus before
they implemented their new WMS. He
proudly said that they upgraded to newer and faster handheld scanning devices,
but pretty much kept their existing processes intact.
I asked him if he would be interested
in increasing worker productivity by 30
percent with his new WMS and the new-

er scanning devices? Of course. I told
him to seriously look to implement voice
technology for picking. Voice solutions
had matured quite a bit over these past
few years and that his solution should be
operational within 90 days and the technology would expect to show a return on
investment in under nine months. Importantly, he did not have to be tied to
having his very expensive WMS providers
consulting services organization after he
went live, like it used to be. I strongly advised that he should add voice to the list
of solutions for his team to pursue.
Our conversation then turned back to
my question about understanding the
physical movement of the company's
fork trucks. While I was trying to get the
owner to think about the movement of his
lift trucks, I was really trying to get him to
think more broadly about the operational
layout and organization of his facility. His
truck movement was an easy way to visually understand the inefficiencies of their
facility. I was challenging him to look at
their operation and organization in the
face of today's reality - that his industrial
customers were also consumers. And as a
consumer, their expectations of service
had dramatically changed these past two
years. While two-day delivery used to be
considered a privilege, it is now almost
always expected.
At his point in our discussion, he got
what I was driving toward. I was trying to
get him to look at items that could produce quick results. None of these items
was "big bang" in nature, but they offer
valuable contributions to a more efficient
operation. What's next for you? q

INDUSTRY TRENDS

While the business attempted to keep
up with the times, its technology infrastructure investments have been targeted. Much of its investments have been
around improving the technical knowledge of its sales and support teams to
further differentiate and create a value
proposition that has been able to limit
margin shrinkage. The company has also
invested heavily in its fleet operations,
which has enabled it to greatly expand
their delivery frequency and reduce parcel costs dramatically.
Although these investments have been
helpful in stabilizing their business, my
conversation with the owner quickly
turned to "what's next?" - a question
that the business' team cannot seem to
answer in solidarity. Most of the choices
were deemed too expensive or too risky to
move forward with and the team was subsequently asked to present second round
options that offered minimal risks and
timely measurable results. He asked me to
help evaluate current operations and assist in developing a plan moving forward.

Scott Deutsch is the president of Ehrhardt +
Partner, North America, a global WMS/WCS/
voice solutions provider with more than 500
team members and 1,000-plus customers.
Scott has 20 years of sales and marketing
experience in vertical application software
companies. For more information, visit www.
epgroupna.com.

Fall 2017 www.wdimagazine.com

9


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Table of Contents for the Digital Edition of Wholesale & Distribution International - Fall 2017

Table of Contents
Wholesale & Distribution International - Fall 2017 - Cover1
Wholesale & Distribution International - Fall 2017 - Cover2
Wholesale & Distribution International - Fall 2017 - 1
Wholesale & Distribution International - Fall 2017 - Table of Contents
Wholesale & Distribution International - Fall 2017 - 3
Wholesale & Distribution International - Fall 2017 - 4
Wholesale & Distribution International - Fall 2017 - 5
Wholesale & Distribution International - Fall 2017 - 6
Wholesale & Distribution International - Fall 2017 - 7
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Wholesale & Distribution International - Fall 2017 - 9
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Wholesale & Distribution International - Fall 2017 - Cover3
Wholesale & Distribution International - Fall 2017 - Cover4
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