Post by: Jason Bader - Principal, The Distribution Team
I was recently doing a private seminar for client and the topic of cycle counting came up. I was doing my standard talk about when to count and how many items we needed to count to stay on track. I happened to glance over at the operations manager and I could tell that he was having a tough time grasping the timing and labor allocation required to perform a solid cycle count. This is not uncommon and tends to be a difficult sticking point with many companies. The company has grown substantially over the years and the bodies in the warehouse are a direct reflection of that growth. Before I totally lost him, I threw out a suggestion, “Have you ever considered a second shift or at least staggered the one you have?” His head slowly started to nod and I could see the wheels beginning to turn.
The operations manager had been toying with the idea for a great deal of time, but he was struggling with the justification and logistics of this operational change. As their organization has grown, they have added a significant amount of warehouse employees just to keep pace. Unfortunately, the physical space hasn’t grown with the escalation of transactions. When we keep adding bodies to maintain pace with the volume of activity, eventually there will be a point of diminishing returns. With all those bodies, and equipment, moving around the same physical space, the potential for mistakes and workplace accidents increases.
This is a fairly common problem in the clients I have worked with over the years. The organization would like to implement solid practices, like a daily cycle count, but they can’t get past the constraints of the standard work day. By splitting up the team into shifts, you start to see opportunities to take on those improvement projects you always wanted.
There are many ways to split up the warehouse team. I have worked with clients that have two, or even three, distinct shifts of employees in the warehouse. This is more common in a distribution center environment, but it can work well in a large selling branch. More commonly, I see companies create overlapping shifts designed to extend the workday. Both can have their advantages, but it really comes down to one basic idea: The warehouse is more efficient outside of the traditional order taking workday. Those companies who have put this into effect can attest it is amazing what can happen in the few hours after the phone stops ringing. Without interruption, warehouse magic occurs.
If your normal business hours are 7am – 4pm, I would consider splitting the crew up into an early and late shift. The morning team might start at 5:30am and wrap up at 2:30 with an hour lunch. The swing crew might start at 11am and wrap up at 8pm with an hour meal break. The 3 hour overlap can provide the manager an opportunity to allocate resources where they are most needed on any given day. This could be a large truck shipment that needs to be broken down and received or a special order that needs greater attention. Again, the manager can allocate resources to deal with challenges.
Over the years, I have found that the real benefit occurs after the closing bell. Being realistic, the day doesn’t just shut off at 4pm. There is often a wind down of 30-40 minutes. Once the sales team clears out, the efficiency level starts to pump up. One of the things I have noticed about this extension of the day is that business closure that can occur. Rather than leaving loose ends for the next day, this team is able to bring the operation to a logical close. We can put away what is received. We can pick what is printed. The team can really come close to the “day’s work in a day” ideal.
As far as the activities go, there are several ways to put this together. I have one client that acts as a distribution center for their retail locations and handles all online order fulfillment. This company has chosen to process transfers in the day and customer orders in the evening. This splitting of functions has produced much more rapid fulfillment and more time for quality control. Their order mistakes are almost non-existent and customer satisfaction has improved. I have seen other companies do just the opposite and focus their attention on order fulfillment during the day. They reserve the evening shift for put away, counting and transfer orders. For the company I recently spent time with, I might suggest that they consider doing their cycle counts before the doors open, process orders and receive product during the bulk of the day, and perhaps stock the shelves or stage orders for morning delivery in the evening. If the vehicles are secured, I would consider loading the orders by route for the drivers. The key to task allocation really comes down to priority and external logistics. As a small piece of advice, I would try to schedule activities with the greatest attention to detail for those hours outside the traditional working day.
If pressed for an answer, I generally tell people that this change starts to become an option once you have 8 or more employees in the warehouse. It may work with less, but I really don’t like to see situations where someone is there alone. Too many bad things can happen. One of the biggest barriers to implementing this concept is supervision. It will be very important to pick a solid team leader for each shift. This person will have access to the building when a majority of the management will be out of the office. One of the best ways to ensure a proper open and close is to create an operational checklist. Many branch managers have taken pen to paper, or fingers to keyboard, and created a detailed opening and closing checklist. This will go a long way to ease the apprehension associated with giving keys to the building.
As your organization grows, the activities and projects multiply. Being constrained to the 8 or 9 hours normally associated with the business day will create continual frustration and ultimately produce a lack of efficiency. Do yourself a favor and consider what a split shift would do for your warehouse. If you need help getting started, I am just an email of phone call away.
About the Author:
Jason Bader is the managing partner of The Distribution Team, a firm that specializes in helping distributors become more profitable through strategic planning and operating efficiencies. The first 20years of his career were spent working as a distribution executive. Today, he is a regular speaker at industry events and spends much of his time coaching individual distribution companies. For more information, call (503) 282-2333 or contact him by e-mail at Jason@Distributionteam.com. Also visit the Distribution Team’s website at www.thedistributionteam.com.