Creating Standard Operating Procedures for Your Distribution Center

Whether this is year 1 of your new distribution center or year 15, Standard Operating Procedures (SOPs) are of utmost importance to your buildings' success, and even culture. If done correctly, they will add consistency not only to the work being performed on the floor, but also in senior level decision making, accountability, and communication.

Today, we’re kicking off a two-part series on SOPs, where we will walk you through how to establish them and most importantly, how to sustain them.

Before we get into the "how" of establishing SOPs, let's take a moment to review quality decision making. Deciding the "best method” for any process can be very subjective and personal, so it's important to establish a clear decision making process for everyone involved.

Step 1: Establish a Decision-Making Process

This can be a large scale endeavor for your facility, and it should not be treated as simply putting a process on paper. If done right, it will be a governing document that can be applied in various ways such as safety, process improvement, and accountability. That is why a well-defined decision-making process is something to consider.

Our personal favorite is the RAPID Decision Making model featured throughout the Decide and Deliver book by Bain & Company. We highly suggest purchasing a copy for your senior leadership team. However, we will cover the high level aspects of RAPID and demonstrate how it can improve establishing best methods.

The basis of RAPID decision making is about clearly establishing roles and responsibilities for everyone involved. According to Bain & Company, there are five roles in the decision making process:

  1. Recommend

  2. Agree

  3. Perform

  4. Input

  5. Decide

Understanding your role is very important to creating buy-in from all levels. It's unfair to hold Voice of Customer (VOC) meetings for your associates and lead them to believe they hold the ultimate decision. They have a certain level of control, but they are not the "Deciders." The same goes for the multiple shift area managers who may disagree on methods. They have the ability to voice their input without the misunderstanding that they make the decision. Setting these expectations early on allows for better consensus decision making throughout the process.

On the other end, does the Vice President or Director need to be the "Decider" for loading trailers? Probably not. The roles are different building to building, but the role designated as the “Decider” is commonly the head of operations. We’ve seen that range from General Manager to Functional Managers. They key being that the role is in position to best represent the facilities operations teams as a whole.

Now that there are some clear roles and responsibilities, let’s start getting input.

Step 2: Get Input from the People That Matter

SOPs can be part of the fabric of your process culture, but in order to be, they must be accepted by the people performing the job. Utilizing Voice of Customer (VOC) meetings to obtain input from team members is the best way to do so. A good starting point is to have each shift run a VOC meeting for each process per department. If you're following the RAPID model, put your department supervisors in charge of this as the "Performers.” It’s a good idea to add another person as support, possibly engineering or another support department such as planning or maintenance.

A VOC meeting isn’t something that can be thrown together on a whim either; there are few characteristics of a great VOC to consider beforehand:

  1. Diverse, but knowledgeable, group of people

    • Varying tenure is crucial. Have some newly trained associates join to challenge the old ways.

  2. Minimal leadership intervention

    • RAPID comes into play here. Be sure to communicate to the leader running the meeting that they are a Performer and should not influence the team by providing input with their own opinions. However, there will be situations where some ideas are not feasible for various reasons, and the leader may need to keep the group focused on possible methods. The goal is for the leader of the VOC to be open to all input, and allow the team members to work through differences. When the meeting comes to a halt because of differing opinions, then the leader can step in to work through them.

  3. Focused

    • Write the objective, roles and responsibilities, and plan of action on a whiteboard to keep the group on track. Be proactive in keeping the the meeting on track and productive.

The results of these VOC meetings should be an overall recommendation on the best method. It should be as detailed as possible, and all situations should have been discussed. However, it is okay if there are decisions that are set aside for further input from engineering, planning, or maintenance departments who may not have been present. These decisions must be escalated to the right person immediately though, and the results should be communicated to the team.

Once input is taken, it’s time to create the recommended process.

Step 3: Make the Recommendation

This is an important juncture in the creation process. It’s where associates and front-line leaders, who spent their valuable time hashing out indifferences on the best methods, must understand that they are not handing this document off. It is theirs. They own it, and therefore, time should be set aside for them to build it.

Give your teams the right amount of time to produce a draft of the SOP and they will surely treat it as their own. Once the initial draft is complete, it goes for review to be Agreed upon. In most cases this is a joint agreement between all shifts and their representatives, typically area supervisors and shift or functional managers. At this moment, a true consensus has been reached across all shifts, from associates to area and functional managers.

The final step to making SOPs a part of day-to-day reality can now begin...

Step 4: Decide and Deliver

As our friends Bain & Company said, it's time to Decide and Deliver. The recommended best method for the process should be put in front of the Decider. All possibilities of the process have been examined by operations, engineering, and planning departments to ensure success.

The Decider can now do a final review and put their stamp of approval on the process.

Communication and roll-out of the process can now commence, delivering a process that has been agreed upon and created by those performing the job.

If you follow these four steps, and in particular establish a decision-making process, standard operating procedures will become much more than a paper document. If used correctly, they will become part of everyday decisions in regards to safety, accountability, and process improvements--and ultimately your culture.

In Part 2, we will discuss how to sustain everything you’ve created, establishing it as an “active” document that can be used for training, accountability, and process improvement. Check back in two weeks to learn more!