You have just been promoted to a position of senior leadership in your company’s logistics organization and have been charged with improving the operation and reducing your operating costs. Where do you begin? How do you drive improvement in distribution center (DC) productivity? Here are four keys:
Labor cost continues to be the largest variable cost in high volume, complex distribution centers. And each year throughout most of the US, the availability of reliable, trained people to work in these facilities gets more limited.
Many companies are looking to labor management programs to help make the best of this situation and to prepare for their future needs. One of the largest stumbling blocks in developing a program is understanding the terminology of how performance is measured and evaluated.
New distribution centers (DCs) best support future needs if they are designed against a solid foundation of planning assumptions and requirements. It’s true that building that solid foundation requires an investment of time and money, but without it, the rest of the plan is put at risk of failing quickly and without notice.
Success in bringing a new distribution center into operation requires a coordinated effort across a number of fronts, especially if the facility is a large, highly complex operation that is required to handle a demanding service level.
Much of the success relies on strategic preparation, including the ability to predict potential downfalls and adapt accordingly. Before you bring a new distribution center into operation, consider these six common pitfalls that far too many companies fall victim to, even those with distribution centers based on a good design.
The key differentiator that sets successful businesses apart from mediocre ones in any industry is that successful businesses employ strategic planning every step of the way. Successful businesses realize that it’s never good enough to accomplish just one goal and then stop improving. Their leaders understand that the moment they stop growing and innovating is the moment that their business become stagnant and irrelevant—especially in logistics and supply chain optimization.
In fact, excellent leaders are constantly considering the strategy and planning required to keep their businesses profitable and relevant in the market.
As a leader, there are many ways you can continue to grow your organization and challenge your team. But first you must understand where the gaps and pitfalls are in your business. For example, today’s supply chains are complex in their design and widespread in their mission. When was the last time you assessed the performance of your supply chain? Here at LogisitPoint, our entire strategy for helping you optimize your supply chain begins with assessment and audits. Taking the time to conduct a full audit or assessment can help you identify opportunities to streamline, collaborate, standardize, and improve—opportunities that you might otherwise miss out on.
From there, you can cast vision, take into account what must be improved, and set goals for cost reduction, greater efficiency, team collaboration, and more.
The next part of strategic planning is determining the concrete steps for how you and your team will get to those goals and put your vision into play.
Here’s the deal: The best leaders not only cast vision, but they associate goals with that vision and prepare a plan to accomplish those goals. Without a clear path of action for achieving your vision and goals, your goals are nothing but nice, flowery language on paper that will never be realized.
So what makes a good goal?
Good goals stand out from bad goals by being measurable, challenging, and achievable. Your goals should stand apart from day-to-day tactical work by being aspirations, but it’s not helpful for you to challenge your team to achieve a goal in a year that realistically needs five years to achieve maximum impact.
As you begin to think about building goals for your organization, start by outlining all the different aspects of your logistics and supply chain departments. It’s important to keep in mind that every member on your team should be able to point to a specific goal or set of goals as their objectives so keep that in mind during the planning phase of goal-building. If you only focus on growing your sales department but ignore your logistics team, that’s not helpful; sales might improve, but logistics might not be able to keep up with the new demand. Make sure every employee understands their goals and what their challenge is.
Now that you have your goals, you need a plan to put those into play at the workplace. Starting out, it’s important to consider two different types of plans; the five year plan and the one year plan.
Five-Year Plan: The five-year plan should focus on growth and improvement. This is the plan that sets the big-picture vision for what the next five years will look like and the growth and improvement levels that are expected at the end of five years.
One-Year Plan: Concrete actions and goals. The one-year plan should be a granular, step-by-step plan—the kind of plan that provides insight for every employee, giving them exactly what they need to accomplish the challenge you’ve set before them. Your one-year plan should be evaluated at the end of each fiscal year and adjusted for the next year to make sure that the overall five-year growth and improvement goal is still on track to be fulfilled.
Here’s the comforting aspect of being in leadership. It’s likely that you have a talented team of people or resources around you that you can access to aid in this process. So during this process, you can maintain a 50,000 foot view of your vision while equipping your managers to take that vision and turn it into an actionable implementation plan for their departments.
You can even partner with a team, just like ours at LogistiPoint, to make the most of your vision casting and as a guarantee that you aren’t missing out on any opportunities. Our entire team here is passionate about helping businesses just like yours understand how strategy and planning go hand in hand to optimize teams and supply chains. And we walk with you every step of the way from audits and assessments to improvement plans and implementation.
To learn more, view one of our recent case studies to see how we help build better, smarter businesses and supply chains.
We are pleased to announce the promotion of John Miller to Manager at LogistiPoint Consulting. John has deployed successful Performance Management Programs for ANConnect and Cabela’s during his career with LogistiPoint. During his tenure, John has developed a strong reputation for consultant development, deep thinking and innovation. John’s easy-going style and herculean work ethic have made him sought after by clients and consultants alike.
When John is not leading at LogistiPoint, he is an avid reader, an aspiring triathlete, just finished his first snowboarding lessons in the Rockies and benefitting immensely from Caroline’s amazing epicurean skills!
Few people have contributed to the capabilities, capacity and culture of LogistiPoint Consulting as John. Please join us in congratulating John on his promotion to Manager!
We are also pleased to announce the promotion of Peter Crupie to Senior Consultant. Peter was one of the first consultants at LogistiPoint, having started his consulting career with us in 2013. He’s taken on numerous roles over the last 4 years, having always been willing to ‘go anywhere and do anything’. His clients appreciate this attitude as they frequently ask ‘can we have Peter back?’. His clients include Chico’s, Stella & Dot, Ralph Lauren, Maurice’s, Coloplast, Michael Kors, Walmart, and Nike.
In his spare time Peter enjoys spending time with his family, doing work around the new home they purchased last year, the Atlanta Braves, and longing to play golf.
Please join us in congratulating Peter on his promotion to Senior Consultant!
Brentwood, TN - Continuing a long and successful career in the supply chain space, Wesley Lankford has joined LogistiPoint Consulting. Mr. Lankford was most recently with Under Armour, and prior to that was an integral part of the WMS transformations with Genesco. "Wesley has demonstrated a steadfast commitment to innovation and quality execution throughout the many years I have had the privilege of knowing him and observing his work. He brings yet another valuable toolbox and expertise to our team, as we continue to assemble the most dynamic and capable supply chain consulting practice in the space to deliver remarkable success for our clients in solving their unique and complex challenges", said Principal Seth Davis.
At Genesco, Wesley served on the design/build team of the 322,000 square foot distribution facility that serves 1,300+ Journeys, Journeys Kidz, SHI and Underground Station stores. He also helped to design a custom LMS that supported a new continuous improvement initiative by integrating activities from the WMS and the time and attendance system with the labor management standards to calculate performance and incentive bonus.
While with Under Armour, he served on the WMS/WCS implementation team for the 1.1 million square foot DH (Distribution House) in Mt. Juliet, TN - serving on the DH Senior Leadership team representing information technology during the buildout, start up and normalization of DH operations. Wesley also served as on-site technical manager of a $5.5 million MHE expansion that increased outbound capacity by 30%.
In his new role with LogistiPoint, Wesley will serve clients directly in labor performance management projects, WMS and LMS selection and implementation, as well as participate in the project management activities for Logistipoint.