Best-in-class warehousing and how to get there…
Last September, consultant Jeroen van den Berg launched the third revised edition of his book Highly Competitive Warehouse Management. The book explains how to step-by-step improve a warehouse to best-in-class level. This is the first episode in a five-part series where the author takes us on a journey through his cut-and-dried approach.
Some warehouses have excellent performance with 99 percent plus perfect deliveries, motivated staff and they seem to move effortlessly with changes in the market. The warehouses maintain close collaborations with other links in the supply chain. Distribution center managers play an important strategic role within their companies and are seen as equal to managers of commerce, finance, production and purchasing.
Other warehouses differ strongly. Their performance is mediocre and unreliable. Employees are poorly motivated. Aisles look messy. Managers are completely absorbed in their daily routine. Unexpected events, last-minute customer requests, delays, the work seems like an endless chain of fires that have to be extinguished. How do you escape that daily fire-fighting routine? And if you succeed, how do you transform your distribution center to best-in-class level?
I decided not to reinvent the wheel myself, but to observe from practice. As a consultant I have the privilege of looking around many warehouses. I often see things that I recognize from other well-performing warehouses. However, I also regularly encounter something unusual. That may well be the egg of Columbus, but typically it just is not practical and better alternatives exist. I have collected these better alternatives, or best practices, in my book.
So time to act. Transform your distribution center to best-in-class level with proven best practices as building blocks for warehouse optimization. However, it is not wise to proceed haphazardly. There are three major pitfalls:
- Getting stuck in fire-fighting mode
- Introducing new technology before processes are straightened out
- Developing supply chain initiatives from a subordinate position.
Ironically, as a manager, you are often so busy solving day-to-day problems that you do not have time to solve problems. So you keep wandering in a vicious circle. In desperation, you try to tackle the operational problems with new software. However, if the software has to control outdated processes, then it becomes a difficult implementation that hardly yields benefits. So it is smart to first streamline the processes – eliminate, combine, improve – whatever it takes to clean up the mess created by years of neglect.
Moreover, a warehouse often plays a subordinate role within companies and you are at the mercy of other departments. This creates enormous challenges that make your firefighter’s heart beat faster. Fortunately, you’ve just decided not to fall into the first pitfall anymore. You prefer to look for what is best for the entire company together with colleagues from other departments. However, that is difficult if the distribution center is in the underdog position. It is important that you first build up a strong operation, so that you are ready to operate as an equal partner in the supply chain. Only in this way can a distribution center achieve competitive advantage.
This is the introduction to the article series on creating best-in-class distribution centers. In the following episodes, we will take a closer look at warehousing best practices. In particular, we look at practices that changed in recent years as a response to e-commerce and digitization.
About the book
Title: Highly Competitive Warehouse Management, Subtitle: Action plan for best-in-class performance, Author: Jeroen van den Berg, publication date: 1-Sep-2021, English language, 3rd revised edition, 329 pages, paperback € 34.95, ISBN 978-9492505019, eBook € 24.95, ISBN 978-9492505026.