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Brian Lindenmeyer, Account Manager for Blue Horseshoe Strategy Division to present “The right network & facility strategy for the future E-Commerce” at the 2014 MODEX Supply Chain Conference

Brian Lindenmeyer will be a featured presenter at this year’s MODEX exposition in Atlanta, Georgia, on March 18, 2014.  The event will feature presentations from industry experts on the latest trends and technologies impacting the order fulfillment and supply chain.  Brian’s presentation is titled The Right Network & Facility Strategy for the Future E-Commerce:

Online and traditional retailers are facing increasing challenges in meeting customer demands in terms of service and quality. The evolution of e-Commerce and social media requires companies to engage with their customers and provide visibility that has traditionally been seen as optional to even supply chain partners. A successful and sustainable supply chain strategy requires that the distribution network be designed to support the service level required by customers, with facilities that have the automation and technology to support high fluctuations in order volume and characteristics. This session will review the dilemmas and challenges facing companies in managing e-Commerce expectations, and look at the strategies that need to be executed in order to succeed in the future of commerce.

Key Takeaways

* The impact of customer buying patterns and shipping options as it relates to retail commerce
* The requirements of a supply chain to meet the customer demands of future commerce
* Key elements of a network strategy, four-wall DC design, and systems to support future commerce

What is MODEX 2014?

MODEX 2014 will be one the largest expositions for manufacturing, distribution and supply chain solutions in the Americas in 2014. The show is designed to offer supply chain efficiency solutions, learning opportunities and information by showcasing the products and services of over 800 leading providers.  The MODEX show floor is divided into three solution-specific centers: Manufacturing and assembly solutions, fulfillment and delivery solutions, and information technology (IT) solutions.

An extensive educational conference will run concurrently with the show and include sessions on improving operational efficiencies and visibility in manufacturing, distribution and for the overall supply chain. This format allows attendees to learn about various manufacturing, distribution and supply chain solutions in the educational sessions and then actually see the equipment, systems and services that can implement those solutions.

ABOUT BRIAN LINDENMEYER

Brian has over 18 years of experience in operations strategy and process improvement; working both as a client and a consultant.  Previous projects have included strategy development, network design/optimization, operations improvement, ERP and SCM software justification and vendor selection, as well as the implementation of solutions in call centers and service operations, stores, distribution, and manufacturing.   Brian earned a Bachelor of Science degree in Industrial Engineering from Clemson University, and carries multiple accreditations and certifications, including Lean Six Sigma, MOST, MSD, and MTM. He speaks frequently at regional and national conferences on operational leadership, continuous improvement, and human capital performance management.

ABOUT BLUE HORSESHOE, TRANSTECH DIVISION

Blue Horseshoe TransTech Division is a management consulting firm that has been providing expert supply chain consulting solutions to Fortune 500 and mid-market businesses throughout the world since 1983. Based in North America, Blue Horseshoe, TransTech assesses business needs and applies world-class business applications to improve profitability and increase efficiency. For more about Blue Horseshoe, TransTech Division, visit www.transtechconsulting.com.

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A Roadmap to Operational Excellence through Labor Management

PART TWO

In my last installment, we covered the first 3 habits of highly productive supply chains.  Before we cover the last four, let’s review what we’ve covered to-date:

The 7 Habits of Highly Productive Supply Chains

  1. Get out of the muck, but stay grounded. Establish a vision for organizational readiness, and being the process of getting grounded in the execution of excellence.
  2. Clarity = Simplicity. Knowing who your real customer is will eliminate the background noise and ensure roles are understood, and leadership can focus on eliminating the stress within each associate.
  3. Execute the game plan – always. Operational leadership, those who live in the trenches, their goal is execution.  Establish the simple, clear vision – and develop a strategy that will deliver business results daily.

A clear & simple vision with one strategy in mind can foster the sustainable growth required during these economic times through small incremental change.  Breaking through to the next level requires a clear vision, allowing leaders to focus on the development of your most important asset – your people!

Let’s get cover #4 and #5 of highly productive supply chain habits:

4. Point, Aim, Shoot, but make sure you Focus. Great organizations train associates to see through fog of the complex business environment, training associates to see each resource as an opportunity causing success or as a weakness that may cause you to fail.  One trend is the amount of information overload that is happening…the electronic chatter going on around them.   Make sure your operational leadership has time to think, even if it means putting the Blackberry in a drawer for 15-30 minutes.

5. Alter Roles. Employees have certainly seen their role change, at least what they are responsible for; but typically the title, job description, and pay haven’t.  What’s important is to realize that the old silos many organizations had no longer exist – which is a good thing.  It’s time for companies to embrace the idea that all levels have influence, and foster collaboration.   This is your opportunity to train and teach your associates to see and identify waste and opportunities to save resources, become green and simply save green (money).

Consistent feedback, whether it’s praise or counseling, along with listening to associates provides the right framework for continuous measurable improvement.  Now that you have established a vision with a clear executable strategy – it’s just the beginning.  The real opportunities lie in fostering the organization to identify waste to save resources (become green) to save green (money)!  In order to maintain this state of operational excellence through Labor Management, let’s look at the last two habits:

6. Constantly improve and adapt. Establishing a vision with a clear executable strategy is the beginning.  Effective execution doesn’t mean clinging to what always used to work.  Now more than ever, managers need to be flexible and seek small innovations constantly.  Maybe it’s a wave (formation) change, or a staffing (line-up) adjustment, anything that may reduce costs and increase productivity…but most importantly it should be quick to adopt.

7. It’s all about wins and losses. Ask any coach recently who is now working at a new program if anything matters aside from the wins and losses.  It’s sad but results are all that matter.  And no results are capable without people, or players.  Granted, we all like to say that people come first, but in the end it’s all about results.  This issue really creates a problem since we wonder which one to focus on – results or people – but you can do both.  Regardless of whether you are winning or losing, you must maintain an atmosphere in which your organization has all the tools they need to succeed.  This comes down to coaching and building a team commitment, but also providing each member of your team the clarity and flexibility to be effective.

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A Roadmap to Operational Excellence through Labor Management

PART ONE

In my prior posts, I’ve covered a lot on the reasons for Labor Management in distribution. At this point if you are still skeptical on the benefits, hopefully this roadmap will help you with achieving operational excellence and understand the cultural enhancements from focusing improving productivity through methods and measurements.

If you are still wondering, “Why Labor Management?”, let’s review the benefits:

  1. Labor Management helps operations with its greatest challenges: Productivity, Utilization, Management/HR Issues, Overtime, Safety and much more
  2. The payback (ROI) is typically 8-12 months, and often less! Industry analysts and journalists routinely call this a Gold Standard for ROI.
  3. Labor Management helps justify future MHE and automation requirements. It’s important to get all that you can from your existing assets before you replace them!
  4. Labor Management is the basis for REAL activity-based costing (ABC). Do you know what customers are most profitable? Do you know what value-added services are costing you bottom-line profits?

Typical reactions to failures, or even a simple economic downturn, gravitates companies to focus on how it’s always been done – using historical measurements as the baseline. Rarely does a company without Labor Management have the ability to look at current state and determine if they are even meeting current potential to support future state decision making. This typical solution mentality leads to typical results. If you use traditional metrics, traditional training and tradition end-of-period reporting – is there any reason to believe you are going to achieve anything more than typical results? Without individual accountability, and no real visibility into lost time, companies are going to guess at what is really the source of the lost productivity, utilization and increased costs.

There are some things you can do to make sure you achieve the results of a Labor Management system, and more importantly, sustain them. Here are the 7 habits of highly productive supply chains. Just like coaches do with players on athletic teams, managers must practice the basics – the blocking and tackling skills – in order to execute on game-day. Let’s cover the first 3 habits to ingrain into your culture for success.

The 7 Habits of Highly Productive Supply Chains

  1. Get out of the muck, but stay grounded. Establish a vision for organizational readiness, and being the process of getting grounded in the execution of excellence. Quite often companies I visit have management that is either pulling weeds, or they are dreaming up pie-in-the-sky ideas on how to improve. Yes, operational leaders need to stay close to the action and they should often lead by example. But if you are pulling weeds, you may miss the opportunity. With that said, now is not the time blue-sky strategizing. Sustainable growth, particularly during these economic times, entail small but important changes take place. By establishing a vision for organizational readiness, you begin the process of getting grounded.
  2. Clarity = Simplicity. Now that you’re out of the muck (and sky), establish a clear, simple vision. Just as your leaders need time to focus, associates that are being led need it as well. But what many companies fail to realize is that those players they have out on the playing field rarely know what to focus on at any given time. One of the best examples of this is asking people who their customer is. It’s great that we all know who the company’s customers are, but what’s important is that the receiving department realizes their customer is the put-away department. Eliminating the background noise for each department, and each individual will allow your leaders to make sure that each role is understood, and focus on eliminating the stress within each individual.
  3. Execute the game plan – always. We often talk about the right strategy and models are very important to deal with the troubles that come along, and these points are critical. But for the operational leadership, those who live in the trenches, their goal is execution. Upon establishing a simple, clear vision, develop a strategy that will deliver business results daily. One technique is to establish an organizational readiness framework that focuses on continuous measurable improvement.

For the remaining 4 habits, tune in for the next installment of my thoughts on how to achieve excellence through effective Labor Management.

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The Basics of Labor Management – The Pitfalls, Myths and Keys to Success

In my last post about Labor Management, I indicated there were three cornerstones to the program – Planning, Monitoring and Measuring. This is nothing new to those who are familiar with Labor Management and engineered labor standards.  For those who are still not sure how Labor Management and a discrete engineered standards program can help improve productivity with minimum capital investment, let’s look at why Labor Management continues to be a topic of discussion.

Avoid Common Pitfalls – Measure, Monitor and Manage

Labor Management for distribution centers is a continual topic about supply chain journals, market analysts, and presentations at every trade show.  Why does this program seem to continue to have such media coverage but the embracement by companies is still not as mature as things such as warehouse management (WMS), automation (MHE) and other technologies?  Particularly when the benefits of a Labor Management implementation are presented at 15-30+% – sometimes as high as 45% – without major process changes?

To answer this, let’s address where the ROI really is in a Labor Management implementation, how you can avoid the common pitfalls, and most importantly how you can achieve sustainable success that is promised from engineered standard measurements, real-time monitoring and labor planning.

If you think you don’t need Labor Management because you already have Units Per Hour (UPH) and complex WMS reports that show key metrics by department or even individual, think again.  Remember, you cannot manage what you do not measure!  If you are only measuring the units per hour by function, than that is all you can manage to.  And the variation is orders and products is enough to make this an inconsistent measurement.  (Okay, if all you pick is one item of the same size in the same quantity from the same location – then yes, UPH is fine.)

Regardless of the economy, companies always need to know what it costs to run their business.  Labor is one of the largest costs and Labor Management is designed to help you manage it.  Additionally, Labor Management has evolved to provide real-time planning, quality monitoring, and dashboards that make it easier for managers and supervisors to know where the opportunities lie for improvement.

Top Labor Management Myths

For those still unsure of if Labor Management is a priority, or for those that have already dismissed the benefits as being realistic, let’s debunk the myths.

  1. MYTH: Installing a LMS will save us 15-30% without doing anything else. Yes, installing Labor Management does not save you 15-30% alone.  But a LMS will show your managers specifically where opportunities lie much faster and easier than typical reports.
  2. MYTH: Labor Management requires significant maintenance to maintain accurate measurements. Labor Management standards need to fair and consistent.  Too often people use the word accurate.  In fact, I would argue that accuracy is not even a word that should be used in this context.  Regardless, labor management can be as accurate as you want it to be, but in reality the multiple variables allow the standard to be fair and consistent for each associate regardless of the tasks being completed.
  3. MYTH: Labor Management systems require an incentive program to achieve the savings depicted. While the projected savings of 25+% do typically include an incentive program, companies should not ignore the 15-25% – or 10% for that matter – that can be achieved with just the LMS, engineered standards, and a continuous improvement program around the best practices.

How to Build a Foundation for Success

In order to achieve these savings and not approach the common pitfalls, it’s important that companies focus on the fundamentals.  While this list of 4 items does not encompass an complete implementation plan, these are definitely the foundation to success:

  1. Define the right way to do the job. Companies often indicate they have Standard Operating Procedures (SOPs), Job Descriptions or other process documentation.  The problem with these documents is that explain what to do for a job.  They do not explain HOW to do the job.  Best practices, preferred methods, or any true LEAN process document will outline the key steps on how the job should be completed.
  2. Coach your employees to the best method. Supervisors need to become coaches who help show where time is being lost in poor methods.  For example, in a pick to pallet operation, parking in the middle of the aisle vs next to the slot will cost you a significant amount of time.  Show me an SOP that calls out where to park the pallet jack.
  3. Measure what you want to manage. Remember, you cannot manage what you do not measure, but be realistic.  Pareto principle should apply when considering what to measure.  Where is 80% of the labor used – it’s likely only 20% of the operations.?
  4. Praise great performance as much as you counsel poor performance. Labor Management systems should be used to encourage and acknowledge great performance more often that counseling subpar performance.  This is often forgotten by management.  Remember, people like goals and like being acknowledged when exceeding expectations!

Hopefully this has given you a solid starting point for considering Labor Management as your next initiative.  In my next series, we will look at a roadmap of 7 key habits to instill into your operations management team to exceed the expectations and become a true learning organization on continuous improvement.

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Plan, Monitor and Measure – The Cornerstones of Supply Chain Labor Management

It’s surprising how many companies have not yet considered Labor Management as their next initiative.  Especially since most companies would agree that you first need to measure what the current state is to understand if the future state is an improvement right?  The old phrase of “you cannot manage what you do not measure” was one of the focal points of the prior blog, so let’s pick up where we left off regarding managing your most important (and typically largest variable) supply chain cost – your workforce!

There are three cornerstones to Labor Management – Planning, Monitoring and Measuring.  Your Labor Management program should be designed to support all three of those and each of them require one another to be effective.  You cannot plan or monitor what you do not measure, just as you should not try and measure what you do not need to plan or monitor.  For example, if you have 1 person handling returns out of 100 people, is it necessary to measure that returns process with 5 variables and discrete handling and traveling characteristics?

Planning with Labor Management

An effective Labor Management system should be designed to help you plan labor requirements by area, function, wave, or any other critieria that drives the execution of your distribution center.  This plan should be derived from multiple variables supported by standards that are based on what it should take to complete the job.

Monitoring with Labor Management

We all know that the only thing right about a forecast is that it is wrong.  So while a labor plan may give you a starting point, it’s important that a Labor Management system give your operational leadership the ability to monitor the workforce productivity in real-time.  This real-time access to individual productivity will help managers make the necessary decisions about labor re-balancing requirements as the work plans progress during the day.

Measuring with Labor Management

Industrial Engineers know that seconds are for track meets (not labor standards) just as operation managers should know that UPH (units per hour) is for facility reports.   Industrial Engineers who know work methods and measurements know that standards are in decimal minutes; and operation managers should know that labor performance of an individual is driven by work content.  Utilizing multi-variant discrete standards provides a great view of labor, and coupling it with the workforce management systems to effectively track labor from clock-in to clock-out will uncover the lost time and productivity that can easily be regained.  And by regained I mean get more out of what you already got.

In my next segment, we’ll look at the basics to Labor Management – where to begin and what to look for as you consider this initiative for your supply chain operational excellence.

Read Other Posts from Supply Chain Logistics Series…
Managing the Most Important Part of Your Supply Chain. The People.

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