Crunching Data Instead of Products

Sept. 1, 2004
Irecently received a tardy newsletter. The tardiness was not the fault of the company that sent me the newsletter, but of that great warehouse operation

Irecently received a tardy newsletter. The tardiness was not the fault of the company that sent me the newsletter, but of that great warehouse operation known as the U.S. Postal Service. Don't get me wrong, USPS does a great job. Its material handling, for what is probably the world's greatest crossdocking operation, is exemplary. It handles about 202 billion pieces of mail each year, so occasionally things are bound to go awry.

My newsletter reached my office in a special envelope with a five-paragraph apology printed on the outside, explaining how my mail had inadvertently been damaged by "my postal service." This let me know USPS was accepting responsibility and had not used some offshore outfit to deliver the goods.

The newsletter looked like it had been run over by Lance Armstrong and the entire U.S. Postal Service pro bicycling team. The "Plant Manager" who sent me the "We Care" envelope and my tattered newsletter included a nice sample of dirt from the warehouse floor, and closed by noting how much he appreciated my business, etc.

After I washed my hands, what caught my eye was that huge number — 202 billion pieces of mail. How do they know that? The answer was in the newsletter from Carter & Burgess, and still legible because it had been printed on a good, thick paper stock.

Carter & Burgess is, and does, a lot of things in the logistics and warehousing fields, from building design on up. Its newsletter, Logistically Speaking, talked about crunching data into usable information. And as management guru Dr. Ed Frazelle, president, Logistics Resources International, frequently says, "You can't manage what you don't measure."

The newsletter makes the point that crunching raw data into meaningful information is more an art than a science; however, certain analyses provide valuable information for identifying improvements. Among the things you should measure are inventory profiles, unit velocity profiles, cubic velocity profiles, along with things like lines per order, line pallet ratios and line case ratios.

Essentially all of the above topics involve material handling to some degree, so let's take a more in-depth look at some selected events.

  • Inventory profile is used to identify the right storage area equipment your operation will require. The unit of measure can be equivalent pallets or cubic dimensions. When you factor in inventory on hand with SKU cubic dimensions, you can calculate the cubic feet required per SKU.
  • Unit line velocity is important because it gives you a clue about where to locate products in the racks. You want the items selected most often to be located in the most ergonomically efficient spots to reduce worker fatigue.
  • When you drill down to data on individual orders, the order's characteristics are calculated from historical order files and provide insight to the best order fulfillment strategy. You can measure by lines per order or pieces per line, to evaluate labor savings. By understanding your orderpicking requirements you can formulate a picking strategy that might involve open or case picking for specific SKUs, or a combination of both strategies on the same SKU.

    So what does all this mean? Although we've been talking about warehousing's details, minutiae if you will, you have to view these parts as elements of the whole — the big picture. All the various profiles you design for your warehouse work in concert to generate the most efficient overall operation: No person is an island. And, we're all in this alone kind of thing. If you're looking for ways to add equipment and people to your operations, you need proof or justification. These kinds of profiles add that proof. Numbers get the attention of those folks in the front office who might not fully understand what you deal with on a daily basis.

Another benefit of measuring is it directs you to areas where you can improve without making a capital investment, something that might appeal more to your boss.

As for my friends at my postal service, rest assured it measures every letter and parcel that passes through the door, or gets dropped on the floor. I re-read the "We Care" letter and noted a grammatical error, proving USPS is only human, the one thing measurement can't predict.

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