For Warehousing & Distribution, It’s a Battle for Time
Distribution centers operate on thin profit margins, so competitive advantage often boils down to little things
One of America’s groundbreaking marketers, John Wanamaker, once famously said “half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
Those who run warehouses, factories and other industrial facilities are hopefully not quite as in the dark about our expenses as Wanamaker was when it came to his ad budget, but there is definitely room for improvement when it comes to understanding hidden costs and fruitful expenditures.
For most of us, the coin of the warehouse is time and how it is expended.
Time is the currency in warehouses and distribution centers
For warehousing & distribution operations, Wanamaker’s ad budget conundrum translates to time. How much time do we spend executing an order, to replenish inventory, to deal with mis-picks, to package a carton for shipping? Most of the cost of these operations involve the expenditure of time. How can you do more in less time? How can you avoid adding a third shift? How can you ship more in less time, pick more accurately with fewer hands, or restock without disrupting operations?
Distribution centers operate on thin profit margins, so competitive advantage often boils down to the little things. How can you shave minutes off a particular process? How can you reduce your largest costs — labor, energy, inventory — without damaging customer service, order accuracy, or causing problems?
Areas of where time can typically be trimmed include:
- Packing/loading areas
- Putaway/replenishment/stocking operations
- Picking areas
- Inventory control
Large time and cost savings can be achieved by cutting mere seconds in everyday workflow operations, and that in a distribution center with 8 hour shifts and at fifty workers, 3,000 hours are lost a year due to unproductive workflow processes.
The takeaway? Workflow is where the hidden costs are in most every operation
Workflow is where the most gains are available. Even trimming a few minutes, or even seconds from a repetitive operation can be worth the time and effort it takes to create the time savings. Inefficiency doesn’t manifest itself easily, so companies should continuously and thoroughly evaluate their operations and work processes to reclaim lost time.
People often utilize systems such as Lean or 5S to do this self-evaluation. But there are also simpler workflow evaluation methods that don’t require a broader change of operating philosophy. Sometimes improvements lay in facility layout, where excess walking is reduced.
Many focus on the personnel side of the question, and that’s something we must do. But we can also look at the atmosphere around the people, the equipment they use, the way we ask them to use it, and the ergonomics of the job.
Scott Stone Cisco-Eagle's Director of Marketing. He has over 25 years of experience in the industry.