In the supply chain, problems are often overcomplicated. It’s true that the major issues in the supply chain—which were confirmed through MH&L’s workforce survey process and published in an earlier article—are nuanced. However, manufacturers, 3PLs and others in the supply chain often get lost in the details. They feel there are so many factors to consider, so therefore the solution must be as equally complex. That’s not true. As explained by the popular saying about how to eat an elephant (“one bite at a time”), overwhelming problems are best solved by simplifying how you look at the issue and taking small steps.
To solve the biggest challenges facing our industry, we have to focus on the fundamentals and simplifying the end goal. Fundamentally, the solutions to supply chain woes boil down to the right combination of three factors—technology, data and processes. Here’s how that would be applied to three of the top supply chain problems.
“Trouble finding skilled labor”
It’s no surprise that the current labor market is presenting a big challenge for organizations within the supply chain. Challenges are vast and range from finding top talent and helping an organization “speak Millennial” so the new labor generation can understand your organization’s tribal knowledge. To simplify the issue, just think about how you can help current employees be successful.
What we’ve seen is that employees appreciate when employers invest in them. Of course, the investment is intended to impact the bottom line, but when employees feel that their organization cares about them and wants to make their lives better, they want to reciprocate and are more invested in the organization’s success.
A simple way to do this is by upgrading technologies so employees can be successful. Rather than the constant headache of battling with archaic equipment and resolving distractions, workers can focus on their responsibilities. They’ll feel more accomplished and less stressed. Also, when you upgrade technologies, choose equipment that’s familiar. For example, using smartphones and tablets instead of barcode scanners can make it easier to train your employees and for them to get work done.
Another way employers can help their employees be successful is by being transparent with how they’re measuring workers. If an employee can see how their company measures their productivity and let them know how they’re measured against all the employees in that zone, they will work harder and understand how they can help their company be competitive. Setting up incentive pay based on improving operations is a way to not only motivate the work force, but to also show that the company rewards improvement.
Improving processes also helps solve labor issues because it increases the productivity of employees. With the correct operational setup, it’s easier to train employees—taking hours instead of days—and increases overall efficiency. If an organization achieves a three-fold efficiency gain (which isn’t uncommon), then two-thirds less labor is needed for the same productivity. Instead of filling six positions, you only need to fill two. Plus, instead of needing someone with a lot of experience, you can train less experienced people quickly and they can have the same impact.
When employees are happier, and more work is getting done, it makes it easier to attract new talent while simultaneously alleviating staffing pressure.
“Adapting to and actually adopting the many technological advances being made”
Artificial intelligence, connected devices making up the Internet of Things, new devices, automation, the cloud, robots. Today, technologies such as these are moving so fast, it’s impossible for any organization to keep up with, much less implement, even a fraction of the technologies available.
Regardless of where your organization sits on the technology continuum—early adopter, laggard or somewhere in between—there are fundamental technologies for businesses of the 21st century that everyone should be utilizing or plan to utilize. Among these are cloud-based applications.
As organizations are forced to do more with less, in highly competitive markets and demanding supply chains, organizations are turning to technologies that are dynamic and scalable. Established cloud technologies are perfectly suited for these situations. Whether deploying a new system, scaling a current system or integrating multiple systems, cloud-deployed infrastructure and applications eliminate the need for a massive amount of on-site infrastructure and its required maintenance. In the words of my business partner and COO, “The cloud simply means that your technology is other people’s problem.”
Plus, with technology in the cloud (especially WMS), they can be deployed and integrated with an existing ERP system or other applications in your enterprise software network. This will allow you to improve customer service and employ proven processes already established.
As with any business decision, first understand your business’s objectives and their supporting processes. Then, establish a foundation in the cloud to support these processes.
“Adapting to the omni-channel movement and providing timely solutions for turnkey startups”
New problems can’t be solved by using old answers. In the supply chain, this means that you can’t expect the same strategies and systems that were effective for the single-channel movement to be effective for the new omni-channel movement.
Really, the first step to transition to omni-channel movement is putting data at the heart of your operation. Data is a critical business asset. The collection, access, analysis and utilization of data must be a primary consideration, not an afterthought. Design systems and utilize technologies that capture data about how things move within your warehouse as well as employee productivity. Then look at key metrics like total line items per order, picks per hour, and cost per pick per SKU to identify weak links and the most opportunistic areas for improvements. The warehouse controls the velocity of the entire supply chain, so these optimizations have a significant impact on the bottom line.
With data surrounding the speed at which items move through your warehouse, you can develop a new omni-channel strategy. The strategy doesn’t just involve setting up put walls (manufacturers) and pick walls based on the speed of each item; it also means structuring your replenishment process to accommodate each item’s velocity.
Your warehouse team likely has full-pallet fulfillment down. But transitioning to omni-channel fulfillment means your warehouse systems need to have an even more holistic view of operations than ever before. For instance, if your picker is doing their each-pick efficiently, but the pick-face position is missing product, then they’re going to lose productivity trying to find the product somewhere in your warehouse. The point here is the pick efficiency and speed mean nothing if replenishment can’t keep up.
It’s difficult for replenishment to keep up in an omni-channel environment unless data is captured, evaluated and shared across the warehouse. Your warehouse system needs to understand and be able to communicate the different priorities of system-directed putaways based on fulfillment requirements. The new ways in which your customers purchase from you will affect the inventory and replenishment patterns your business was familiar with during its time using a singular distribution channel. Data is the only way to stay ahead and improve without missing new revenue opportunities.
Omni-channel movement presents some complex problems, but the answers are always in the data. Just remember that not all data is created equally. Incomplete data will lead to incomplete insights.
The Eaten Elephant
The challenges supply chain leaders shared with MH&L are real. They’re fluid and hard to get a grasp on, but by focusing on simpler goals it’s easy to come up with solutions that can actually be implemented. Don’t overcomplicate the problems and remember that the answer is always in the right mixture of process and leveraging technology to automate that process.
Evan Garber is CEO of EVS, a consulting firm that helps companies reorganize their warehouse and processes to maximize efficiencies with the changing global supply chain. Tom French is founder of Supply Chain Coach, which works with shippers and 3PLs to implement TMS & WMS software, strategic supply chain optimization, system integration and analytics.