Get Out of Fire-Fighting Mode and Improve Your Distribution Center Operations
Industry consultant and author Jeroen van den Berg advises readers to embrace change, focus on processes, and use the right KPIs.
(Boonton, NJ, February 2, 2012) With all the talk of high-tech efficiency measures such as warehouse management systems, performance metrics, and engineered standards, it would be easy to assume that most distribution centers operate efficiently and effectively.
But such an assumption would be wrong, says Jeroen P. van den Berg, head of Dutch firm Jeroen van den Berg Consulting and author of the new book Highly Competitive Warehouse Management.
Fully half of distribution centers operate in a chaotic state that van den Berg considers fire-fighting mode.
The typical warehouse sets no goals, keeps track of no performance metrics, and simply lurches from one crisis to the next.
"Many managers are absorbed by their day-to-day routine," van den Berg writes in his new book. "Ironically, they are so busy with everyday problem solving that they rarely find time to solve problems."
In the February issue of industry newsletter Distribution Center Management, van den Berg offers advice for DC managers who are interested in leaving fire-fighter mode:
Use KPIs, he says. Key performance indicators (KPIs) should serve to paint a big picture that creates clarity for operators and managers. They can also be invaluable for identifying problems and areas for improvement.
KPIs will vary depending on the size and type of DC, but they measure processes such as productivity, accuracy, inbound handling, outbound handling, and storage.
You should aim to measure the eight to 16 KPIs that reflect the scope of your operations. "If only a few aspects are covered in the KPIs, then this may result in a myopic view of the operation," van den Berg says. On the other hand, too many KPIs or too much overlap of KPIs can lead to information overload and general confusion.
Keep in mind that operators and supervisors will focus on the issues covered by the KPIs, and they'll neglect other measures — so choose wisely, and limit the number of KPIs that individual operators are responsible for. Three to five is a good rule of thumb.
Additional advice from van den Berg appears in the February issue of Distribution Center Management newsletter.
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