Process Improvement in Distribution Centers

The operation of a distribution center (DC) involves detailed coordination of its various activities. To achieve greater efficiency in operations, CDs usually invest heavily in technology (ERP, SCM, WMS, and other acronyms). However, sometimes it leaves out one of the most critical points for efficiency and cost reduction: the processes. Clear that technology plays a crucial role in the optimization of activities, but without the appropriate procedures the CD will not have good results.

With increasing complexity of operations (more suppliers, customers and items), also increases the importance of process management. It should monitor the change in the operational situation of the CD to modify the process accordingly. Using the same old processes for an operation that grows in complexity only lead to higher error rates, low productivity and late deliveries.

The following are three process areas that should be monitored and may lead to a more efficient operation with your team and current technology.

1. Input Materials

If the receiving area is a bottleneck, it is necessary to find the root cause. The inefficiency in input multiply its effects throughout the operation, and the other areas will always have to run after the injury. When mistakes in input materials, pressure increases in the subsequent stages and increases the risk of errors more below. The end result is higher costs and a poor quality of service to your customer.

The CD should have documented processes in detail in these areas:

Scheduling arrival of materials – to avoid peak work must have a process to coordinate the arrival of materials so distributed throughout the work period.

Planning Pre – Receipt and Documentation – must define which processes can be performed before the arrival of the material, and the documentation that must be prepared in advance.

Procedures for Arrival and Unloading Vehicles – detail these procedures avoid placement errors and damage to materials, and increase security ( from theft and physical ).

Procedures for Quality Control – the quality control activities must strictly follow the standards set . These standards should be documented and followed the procedures of entry.

Also assess whether the procedures are being followed . Ensure that employees are well trained and know who will benefit (financially or professionally ) with the efficiency of input processes.

2. Picking

Some processes that can be implemented with this objective are:

ABC analysis , to define the items with high, medium and low turnover , and redistribute the layout of materials for which the
higher turnover are closer to each other and out of materials.

Using “flow racks” for small items that may be occupying spaces standard pallets , increasing the space occupied and the distances between the materials.

For items with low turnover , storage and use multi – level picking, which will optimize warehouse space and reduce the distances traveled.

For low-volume applications , using “batch picking”. This system makes the employee collect the material for several orders at once , rather than making a trip to each small order .

Again , staff training is essential for these processes surtam the desired operation . Analyze how the incoming materials are stocked . There is a clear process that is followed? Or is there a rush and storage is done almost random?

3. Indicadores

The phrase ” you can not improve what you can not measure ” is already known to everyone. However, often still incorrect indicators used to operate the CD. For example , a CD can have as its main window the ” Cost per Pallet processed ” . This is a good measure for senior management , but it is not a good indicator for those responsible for executing the operation and process definition . In addition , an external factor can make this higher cost , while the team did a great job to minimize the increased costs.

The indicators of the transaction should reflect the true productivity of the team, as this is what will motivate them to always get the best results . Following the same example , it would be important to include an indicator of pallets processed per employee . You should always seek a balance between high-level indicators ( usually financial ) and indicators that can be understood by employees and serve as a reference for improvement actions.

It is also important to set goals for each indicator , looking for a steady increase in productivity , but always realistic. No use setting overambitious goals , that will not be affected and only cause frustration in staff.

Source : The Portal Manager, author Luiz de Paiva

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