I’ve recently toured several distribution center operations while evaluating new technology options. And one recurring improvement initiative that stood out at each of these sites is the pursuit of increased productivity. Nowadays, considering the constrained capital environment and short-term focus on operational budget performance, opportunities to invest in new technology are met with great optimism.

During my visits to these facilities, I noticed that the distribution and warehouse managers had very specific views of where and how they intended to leverage their technology investment – whether it be enhanced WMS functions that provide the ability to flow product from receipt directly to shipping or automated picking equipment options that can minimize direct labor for items in storage. 

Looking at the specific tasks identified by the DC managers for productivity improvement, their vision for the application of technology enhancement is accurate: The combination of WMS functions and automated material handing and picking technology will indeed increase the productivity in comparison to the current processes. But how much of those efficiencies are going to be relinquished through the inbound/outbound efforts feeding this process?

In some instances, the DC manager’s vision neglected the additional effort required to bring material into and out of the proposed automated picking application. They also did not factor in the effort required to consolidate multiple process/material flows for shipping. 

As I attempted to address how the proposed new process/technology applications would integrate into the existing operational flows, our discussions quickly reverted back to overcoming specific process challenges in the automation application. 

I wanted to take the conversation a step back and understand how this proposed application of technology could be leveraged across more the DC picking operations. But the DC manager was focused on the details of execution in one area rather than digging into how the proposed improvements impact the operation as a whole.  

My approach to productivity improvement is different. 

I start with a view of the overall operational metrics first (the forest). Only with a clear understanding of all requirements and constraints for a specific operation do I begin to dig into specific solution types (the trees) to support productivity improvements. 

In this particular case, you have to ask yourself: 

• Is the productivity enhancement that will be achieved by this order/SKU-specific technology approach sufficient to overcome the additional effort necessary to bring material into the system and then reintegrate completed order lines back into the main order flow? 
• Have you recognized the additional effort necessary to support automated process? 
• Have you considered how this additional effort will impact your new-found picking efficiencies?

The temptation to develop and execute point-specific technology-driven productivity enhancements is quite common. It’s easy to get sucked into the nuances of eking’ out every operational challenge and efficiency opportunity from a new technology application rather than spending time to understand the solution’s impact on the entire operation. 

This is a common reason why some technology-driven warehouse improvement initiatives struggle to achieve the overall productivity objectives expected by executive management.

For those of you who are ready to quickly implement changes that will drive productivity improvements, be careful what you wish for. Take the time to develop an in-depth, well-thought-out plan. Make sure to consider your point-specific technology applications within the context of your entire DC operation.

Points to ponder in your quest for productivity improvement:

• Get a clear picture of the forest – Make sure you have a clear understanding of the top-line DC operational performance. Evaluate all improvement options against the impact of the overall performance metrics for the operation.
• Work the processes from biggest to smallest – Look at the areas that require the most labor first. Sometimes the smallest improvements applied across the biggest area of labor can produce the best balance of investment and technology risk to productivity improvement.
• Look for common solutions first, and then consider specific solutions – Search for processes/technology solutions that can support the broadest range of order types and SKU mix. Technology-driven solutions can be expensive and risky when not properly planned. As a result, technology-driven solutions typically see the best payback when they’re applied across as much of the order volume as possible. Only after you have exhausted all the common options should you go down the path of order/SKU-specific technology-driven improvement initiatives.

-- Kevin