Warehouse Christmas Carol 

It was the night before Christmas, when all through the warehouse, Not a forklift was stirring, not even a mouse;  

There were no stockings hung, only safety signs that read, Pedestrians beware, or you could end up dead;  

As I looked around I noticed, the inventory was not nestled where it was supposed to be, The warehouse was out of space and all the world could see;  

The supervisor in his ‘kerchief, and I in my cap,Had just settled down and told me, the consultant, “he was sick of this crap;” 

Inaccurate inventory, not enough space, Constant employee turnover, a pile of returns, He took a deep breath, and then put his hands on his face; 

How did we get here, he asked, what are we doing wrong,How will we catch up with receiving, I thought to myself, “This is the same tired song;” 

Next comes the dreams of a Warehouse Management System, to save us next year, But it never comes, because a lack of ROI is what the executives fear; 

I tell him the lack of ROI is not because of the software, But because few organizations address their problems,Before implementing a solution that big, They merely end up putting clean clothes on dirty kid; 

He says, nothing ever changes and wonders if we will be able to keep our sanity, How many more customers will we lose and blame on the economy; 

What will we do when the customer on the phone asks, “Are you sure you have that in stock,”Smile like always and say, “Can you hold while I check my receiving dock;” 

Just then the CEO enters and asks how is it going, The supervisor smiles and says, “Its going, as you can see its going;” 

The CEO then tells of a simpler time when customers weren’t so demanding, When inventory levels were low and all he thought about was expanding; 

Well expand we have done, with a warehouse bursting at the seams, But is the warehouse too small he asks, or do I need to speak with the Purchasing team; 

The supervisor responds no I think we will be okay, We just need to catch up on the receiving that came in the other day;  

Well we definitely need to get those receivers entered so we can close out this year, So do what you can, to make it disappear; 

As he began to stroll away, down the aisle, he stepped over numerous piles of inventory, He then turned and said, “Merry Christmas you two,” and that is the end of Warehouse Christmas story.  

And I hope you all have a Merry Christmas and a Happy (Prosperous) New Year. 

Rene’ Jones is founder of Total Logistics Solutions, Inc., a national logistics and supply chain consulting organization that focuses on improving your warehouse operations. Rene’ is the author of the acclaimed book, “This Place Sucks (What your warehouse employees think about your company and how to change their perceptions!)” and the book “WMS 101 (Selecting, Implementing and Maintaining a Warehouse Management System”. To learn how TLS can help your organization send an email to info@logisticsociety.com or visit the company’s website www.logisticsociety.com

There once was a company who made a lot of shipping errors. Customers were beginning to get really upset and started threatening to take their business elsewhere. After thinking long and hard about what to do, the owner decided to give each department a bag of nails and he told the supervisor of each respective department, “Every time an order was shipped wrong, the person who made the error must hammer a nail into the back fence”.  The first day, the warehouse had driven 16 nails into the fence, customer service had driven 20 nails into the fence and purchasing only had to drive 7 nails into the fence. Totaling 43 nails the first day alone, and after only a week they could not believe how many nails had been driven into the fence.

Over the next few months, as the company began to improve things got a lot better and the number of nails hammered daily gradually dwindled down. People began to discover it was easier to pay closer attention to the customer’s order than to make the dreaded walk to the back of the building and drive those nails into the fence.

Finally, the day came when there weren’t any mistakes at all. The respective managers told the owner and he suggested, “Wait a week and see how each of your departments continue to do.” By the end of the second week without a mistake, the owner suggested each department now pull out one nail for each mistake free day.

The days passed and managers were finally able to tell the owner that all the nails were gone. The owner then called an emergency meeting with the entire company in the back by the fence. He said, “You have done well, but look at the holes in the fence. The fence will never be the same. When we ship an order wrong, can’t find the inventory promised to a customer or don’t deliver their order when promised, it leaves a scar just like this one. And he pointed to the holes in the fence. You can put a knife in a man and draw it out. It eventually won’t matter how many times you say ‘I’m sorry,’ the wound will still be there. Our customers spend their hard earned money with us, because we have promised two simple things. That we will deliver what they want, when they need it. If we don’t do that it is like driving a nail into their account. And a customer will only take being hurt so many times until they begin giving their business to our competitors. And it is virtually impossible to get a customer back once they are gone.”

How many nails would your fence have?

Rene’ Jones is the founder of Total Logistics Solutions, Inc. (www.logisticsociety.com <http://www.logisticsociety.com/> ). Rene’ is a published author and industry speaker, his recent articles and workshops have focused on improving warehouse distribution operations. You may contact Mr. Jones at (888) 807-0958 ext. 709 or via email at rene.jones@logisticsociety.com.

If you want to see a business owner cringe, ask them about their inventory. They will begin talking in a language only a few souls on the planet will understand. They will mention industry buzz words like: Inventory Turns, FIFO, LIFO, Cycle Counting and on, and on, and on. If you are still standing there by the time they get to COGS (Cost of Goods Sold) I admire your resolve.

Being in the business of helping organizations create better processes to control their inventory, it was ironic that an Insurance Adjuster told me I would have to perform an inventory of my personal assets after a fire in my home. So there I was, unprepared to account for everything that I owned and as luck would have it, the need and urgency to produce this list presented itself at an inopportune time. As we were walking through what was left of my home, the adjuster said I would have to produce an inventory (list) of all of my Assets. A list of what, I asked. You know the number of televisions, DVD players, computers, stereo equipment, etcetera that you own. I thought that would be a piece of cake, since my wife and I are minimalists. After all, we only had two televisions, two DVD players, two computers, and our stereo equipment was in the garage. But the Adjuster explained, “It’s a little more complex than that.” He went on to say that he needed a list of everything, because it’s the information on that list that the insurance company uses to generate the reimbursement check against. He continued by telling me, they will need receipts, the purchase price, makes, models, serial numbers, any photographs of my assets, and the purchase date of everything as well. After the magnitude of what he was asking sank in, I began to panic. My wife (who was 7 months pregnant) and I, along with my 3 year old son went through the house and began trying to produce an inventory list of our assets.

We were somewhat lucky, if you can call it that, because our house did not burn completely to the ground. So we could walk through, and room by room create the inventory minus some details. But at that time I suddenly began to realize just how complicated this Home Inventory thing would actually be.

Shifting gears for a second, think about a business that does $100 million in sales revenue. The value of their inventory will range between 6% and 20% of their Top Line sales. In layman’s terms, they will have on their shelves between $6 million and $20 million of inventory at any given time. That same principle applies to your home as well. If you live in a home with a real value of say $500,000, your assets in the home, garage, attic, basement, front and back yard will equate to somewhere between $30,000 and $100,000. That might help paint a picture as you begin to realize how complicated this process actually was for my wife and I.

Most people only think about the easy to remember assets: refrigerator, stove, sofa, dining room furniture, bedroom furniture, etc. But I challenge you to think about the, “Oh Yeah! I didn’t think about those types of assets.” Such as: ceiling fans, pots, pans, silverware, clothing, hats, toys, tools, lawn furniture, etc. That does not even include construction upgrades to the home.

Getting back to the task at hand, as my wife and I created the inventory of our Assets, I thought about all the times I said I was going to inventory everything we owned, prior to the fire, but never got around to actually doing it. My insurance agent told me when I purchased my Homeowner’s Policy, to create an accurate record of our Assets in case of catastrophe or theft. My attorney told me, when we were creating our Living Trust, to create an inventory of our Assets. I even thought about friends of ours that had gone through a divorce, they said the worse thing they had to do was to inventory their Assets for the Judge so they could be divided equally. The signs were there, and each time my wife and I said we would go through and inventory everything, we never actually did. Now, we were sitting in a hotel room at night, walking through a burnt out house during the day, while listening to our 3 year old saying, “Daddy I’m ready to move back home and play with Shaka and Baby again! Shaka and Baby are our two dogs we had to leave at the house because the hotels in the area would not accept animals.

Through the ordeal of my home inventory chore, I thought a lot about the people affected by Katrina. I felt really sorry for all of those people, knowing less than 20% of homeowners have an accurate inventory of their assets. Then I began to think about the fact that approximately 40% of all small to medium sized businesses never reopen after a catastrophic event. Lee Eagan, CEO of Oliver H. Van Horn Co. explained the devastation after Katrina at the Industrial Supply Associations Annual Meeting. He said, “Nothing survived, no inventory, no records, no photographs, NOTHING. 103 years gone! Many of our employees lost everything, their homes, their cars and most importantly, their memories. Last week our insurance carrier gave us three days to deal with either a cancellation, or accept only 34% of the pre-Katrina limits with a premium of 8.6 times. Not good.

Would the organization you work for be able to produce a list of its Assets? The sellable inventory probably. But what about the number of: desks, chairs, keyboards, fax machines, paintings, cubicles, filing cabinets, telephones, calculators, cash registers, book shelves, racking, etc. It is often difficult for organizations during mergers and acquisitions to document their assets for one another. Remember the, “Burden of Proof” is on you, the policy holder, not your insurance provider.

We all live in a different time now! The number of natural and man-made catastrophes has been increasing on a global scale for 20 years. Already there have been as many major storms in 2000-2005 as in all of the 1990s. Seven of the ten most expensive hurricanes in US history occurred in the 14 months from August 2004 - October 2005: Katrina, Rita, Wilma, Charley, Ivan, Frances and Jeanne. Our changing world and times now include the threat of terrorism on top of the increasing number natural disasters. Now is the time to ensure you have an accurate record of your assets and now is the time to ensure you have copies of your important documents. Such as: Insurance policies, Mortgage Titles, Marriage Licenses, Passports, Veteran documents, pink slips, birth certificates, employment forms, etc. It is in your absolute best interest, as a homeowner, a business owner, and as a parent to your children. Yes, your kids will want their toys, video games, bicycles, etcetera replaced along with your important items.

We are back in our home now and have replaced 55% of our assets. It has taken more than 2 years and we are finally receiving our final payout from our insurance provider. My son is happy he gets to play with our dogs again. We have since welcomed our second son, who was born six weeks premature. My wife says it was because of the stress we were going through at the time. Whatever the reason we are just happy he is here. We have begun speaking to everyone who will listen about the importance of generating an inventory of their assets. Most people are receptive and now understand the importance of it with all that is taking place in our own backyards. Catastrophic events are no longer relegated to other parts of the world anymore. Hurricanes in Florida, tornadoes in Iowa, earthquakes, fires and mudslides in California are proof we all have to be prepared.

Don’t pay on an insurance policy year after year only to not receive all that is owed to you. As I said, it has taken us over two years to receive our final payment and it was not all the insurance company’s fault. Do you have an inventory of your assets? If not, why not? Don’t wait for a disaster to strike and don’t get caught unprepared like my wife and I, and so many others. Believe me, when you are forced to take an inventory by memory so you can replace everything you ever owned you will wish you had taken the extra time to Cover Your Assets!

About our Founder:The fire referenced in this article that conceived our product CYA (Cover Your Assets - Home Inventory Software and Service) www.itstime2cya.com occurred in November 2004.

Rene’ Jones founded Total Logistics Solutions Inc. (www.logisticsociety.com) in 1997 headquartered in Burbank, California (US). Mr. Jones has been published, quoted and referenced in over 100 industry trade magazines and he is also the author of several books, including This Place Sucks (What your warehouse employees think about your company and how to change their perception!). Mr. Jones speaks at several major industry events throughout North America and was named one of the Top 25 Pro’s to Know by Supply Chain and Demand Executive magazine. Rene’ can be reached at (888) 807-0958 or via e-mail at info@logisticsociety.com.

Gas is more than $4.50 a gallon, transportation costs are going through the roof, your employees are struggling to keep their homes and your customers are scrutinizing every line item on their invoices.

As a result, your supply chain is now more crucial than ever to your organization’s success. If you don’t have the ability to provide your customers with what they want, when they want it, and at a reasonable price, the livelihood of your organization is at risk.

Distributor Woseley recently announced plans to close 75 locations and said its profit was down by 23%. Other distributors are feeling the crunch, too, and will ultimately begin “right-sizing.” Will your organization be the next one to shut down operations?

No one wants to hear that they have an “ugly baby.” But if your warehouse is in shambles, then you need to be told so, because it’s probably the only way you’ll end up doing something about it.

Do you have returns that sit around for days without being processed? Are your workers spending too much time in the warehouse checking stock because your inventory is so inaccurate? Is your warehouse bursting at the seams, causing your pickers to spend twice as long searching for products to fill orders, and your receivers twice as long to find put-away locations?

If your warehouse is in shambles, you will have no choice but to admit, you have an ugly baby.

Being in the distribution business, your organization depends on two things: Your people and your inventory. Which do you think is more important to your organization’s success?

The value of your inventory can be as high as 20% of your top-line sales. That means a $100 million company will have approximately $20 million of inventory on hand. And it costs between 20% and 35% of its value to stock that product.

How accurate is your inventory — 70%, 90%, 95%? If you’re a $100 million company, 95% accuracy means your personnel lose $1 million of inventory every year. Is that acceptable?

The value of your people is calculated differently, but is just as crucial. Labor accounts for 65% of the cost associated with distribution. How much turnover do you experience in your warehouse? Do you have a training program for new hires? How do you motivate your employees?

According to recent job polls, roughly 75% of employees are searching for a new job, while 20% say they are disengaged. Disengagement is costing U.S. organizations over $300 billion annually. That’s because 66% of lost customers can be traced back to employee disengagement or indifference.

Is it understandable that employees feel the way they do? Sure it is. Consider that a person making $10 per hour in your warehouse can spend as much as $100 per week for gas. That means they can spend as much as one week’s salary per month to make it to their job – a job where they feel underappreciated!

This cycle is about to come to a screeching halt. If you aim to attract and retain good employees, you will need to do something about it. Remember that your employees are the ones who control your inventory and communicate with your customers.

That said, what will you do differently to service your customers — internal and external — during this economic downturn? Will you evaluate your slow and dead moving inventory to free up much needed warehouse space? Will you evaluate your stocking methodology to create a more efficient picking and put-away process? Or will you bury your head in the sand and hope it all blows over?

I hate to say it, but the latter is what most organizations are doing. In this economy, they do not have the capital to invest in improving their warehouse or supply chain operations. And when business was good, they did not have the resources or the time.

The truth is, now is the best time to do the things you have been too busy to do. Address those inventory inaccuracies and picking errors. Improve the turnover you have been experiencing year after year. Motivate your workers, who are driving long distances to make it to a job they hate. Give them new incentives. Get them re-engaged with the business.

Now is the time to address your inefficient warehouse and get your people and processes into shape. It won’t be easy, but it’s a prime opportunity to turn your ugly baby into a beautiful thing.

These basic truths of career advancement will help you land your next job.

Whether you’re an operations employee at a large regional electrical distributor or a small one-or-two branch family-owned distributor, from a warehouse standpoint, the orders must be received, put away, picked, packed and shipped. It seems pretty simple, but less than 30 percent of all warehouses are efficient, and they average somewhere between 45 percent to 60 percent annual turnover rates. Labor accounts for 65 percent of the costs associated with distribution.

What does that mean to a warehouse operations employee? It means you are a pretty important part of the process. Keeping that in mind, have you given recent thought to your long-term career goals? Maybe a better question might be, do you have long-term career goals?

Most individuals don’t know what they want; therefore, they don’t know when they find it. Although most employees want to do a good job, they sometimes must be reminded what a good job is. The following steps will help you along your way toward doing a good job and achieving career goals.

Write down your goals. Ever wonder why the organization you work for puts the sales goals up ever month? They do it so the entire organization will focus on the outcome and not the obstacles. As an individual you are in control of your own organization and you have to post your goals as well. Saying you want a better job is not a goal. Saying you want a lot of money is not a goal. Saying you want to live in a better house is not a goal.

A goal is saying what type of job you want and when. A goal is saying how much money you want to earn and by when. A goal is saying how much you want to put down on your next house and when you will purchase it. You need to know where you are going before you begin the trip.

Goals allow you to see past the orders you are picking, the product you are receiving and the packages you are shipping.

Make a written list of your strengths and weaknesses. You need to know what you do well and what you don’t. This way, when a position within the company becomes available, you know whether you are truly qualified for that job and capable of succeeding at it. These are the things that will help you achieve your goals or keep you from them.

Ask yourself this question, “Can I see myself doing this job in 20 years?” I remember watching a news story about a company where several people had been laid off. When the news reporter asked one man what he was going to do, he replied, “I don’t know. I’ve worked here for 20 years, and this is all I know!”

That was the one of the saddest things I’ve ever heard. If you calculate the time off this person had during the 20 years he worked for the company, it equates to more than 55,000 hours — which is more than six years of straight free time, not including sleep. My mother told me when I was very young, “You earn a living from nine to five, but you earn a fortune from five to nine.” That person who lost his job could have done and learned whatever he wanted.

If you can’t see yourself doing your current job 20 years from now, that’s OK. The question to ask yourself is, “What am I currently doing with my free time?” You’re probably spending some time with your kids, your significant other, driving to and from work everyday and watching that game on the weekend, but what are you doing to get closer to your goals? I’ll bet you can carve out some time on the weekends or evenings to acquire the knowledge, know-how and resources needed to help achieve your goals.

Don’t associate with negative individuals — at work or at home! This is hard to do because most of us have been conditioned to be negative. “Don’t work too hard. Take it easy. I am doing OK.” Those are all canned responses. When you ask a person how they are doing, why don’t they reply, “Fantastic!”? Because they have been conditioned to think they are just OK. Television, magazines and the media in general tells us: You need a better job, a better car, a better spouse, and to earn more money. But what we need is to rid ourselves of this nonsense and the people who bring us down. They are pushing you further from your goals.

Think, think and think again. Many folks look for answers from others instead of trying to solve problems themselves. When there is a problem, they ask friends, relatives and co-workers what they should do instead of thinking about the problem and coming up with a solution. Although seeking counsel is often a wise step in the decision-making process, people need to think through problems on their own, too.

Ask your supervisor where he or she sees you in five years. That is a question normally asked of prospective job candidates, but it will tell you what your boss thinks of you and your abilities. If he or she does not see you moving up, what does that mean to you?

Is your current position going to get you closer to achieving your goals? Or is it time to move on? Don’t take your boss’s response personally. You cannot ask such poignant questions and then be upset with the answers. You are merely on a fact-finding mission. Now that you have the facts, you have to think them through and make some decisions.

You are doing the company and yourself a disservice if you are unhappy and stay only because of the paycheck. Regardless of what your decision may be regarding whether to stay with the organization or move on, you must do the following things to be a good employee wherever you’re employed.

Work while you are at work. This is a strange concept for some people, but you are at a job — not a social club. There is nothing wrong with chit-chat — unless it interferes with the job you are being paid to do. It puts more pressure on the 20 percent of the individuals processing 80 percent of the work.

“CNN Money” did a survey and found most workers waste an average of 2.9 hours per day. That means if you are average, including lunch and breaks, you only work for 4.5 hours a day. Remember that when your company has its next layoff. Because that means half of you are not needed anyway.

Determine what average is and beat it by 10 percent. If you are a picker and the average picker picks 100 orders a day, then pick 110 orders. This separates you from the pack and shows that you can do more. If you want to get paid more, you must first prove that you are worth more. If every two weeks your productivity improves 10 percent, imagine what will happen at raise time.

If you are a complainer, shut up! No one wants to be miserable at work. If you feel you have been slighted by the organization, that is your problem. Either do something about it, talk to your supervisor, or leave.

No one wants to know about what happened or did not happen to you. They have their own problems to deal with. Stop complaining and do your job. If you must complain to someone, make it your supervisor.

Keep your work area clean. There’s no excuse for a dirty warehouse. If you are a picker or a put-away person, the aisles should be spotless. There shouldn’t be shrink-wrap in the aisles; there shouldn’t be empty boxes on the floor; and there shouldn’t be pop cans or other trash on the shelves.

If you are a packer, it’s difficult to be spotless, but at least be clean. A disorganized packing area screams, “Shipping errors occur here!”

If you are a supervisor, clean your desk. There is no excuse for unread magazines, freight bills, paperwork, pick tickets, etc., to be all over your desk. Every time there is a shipping error and your boss comes to talk to you about it, is that what you want him or her to see? Is that the image (confusion) you want them to take back to their office about you and the warehouse? Of course not! Your environment is a reflection of you.

Do something that is not your responsibility everyday. Most people are quick to say, “That’s not my responsibility.” Even if they don’t vocalize it, many still think it.

Many warehouse employees will walk by a piece of trash on the floor several times a day without picking it up — mainly because it’s not their job. You will get noticed for taking responsibility for things both big and little.

Stop being concerned with your pay. This may be easier said than done, but you negotiated your salary; now you’re stuck with it. If you did not negotiate it, you did agree to it. If you want more, you must contribute more.

Think of an apothecary scale. In theory, the more you put on the contributions side, the more the compensation side will rise — if not from your current employer, then from another. But you have to stop being concerned with what others are making in order for this to take effect. If you are concerned with the person who makes more than you, then you will do less and always make less.

Always take the job (promotion) that pays more money. The more money you make, the more visual you become, and your next raise will be based on your current salary. If the company gives you a 4 percent increase and you make $12 per hour, that is much better than a 4 percent increase if you were making $8 per hour.

A picker making $15 dollars an hour is much harder to swallow than an inventory control person making $15 an hour.

Go to lunch with your boss once a month. This is not “apple polishing” — it’s to find out how you are doing. Most mid-level managers do not make time to adequately evaluate their employees. Therefore, when review and raise time comes around, employees are often surprised that their increase was so low. You need to know on a monthly basis how well you are doing. You need to know what areas need improvement. This way, when raise time comes around, there shouldn’t be surprises.

Ask your supervisor every quarter for a list of his or her initiatives. You need to know what is important to your supervisor. Those are the things you need to work on to help your supervisor out. Your boss has too many things to handle and would appreciate all the help he or she can get.

If you know what is on his or her plate, then you know what areas you need to volunteer in. Think about it this way: if the company plans to implement a new warehouse management system (WMS) at the end of the year, would it be best to volunteer to stay after and clean or to recommend to the supervisor that you stay after and measure locations? The only way to distinguish between the two is to know current and upcoming initiatives.

Read. Then read some more. Would you go to a doctor who has not read a medical book since graduating from medical school? Think of the value you provide by being educated about your industry, your job and the position you aspire to have.

It’s as simple as reading an industry magazine article twice a week. WMSs, RFID, and voice-directed picking are all coming to warehouses. The more you know about them before they get to you, the more valuable you are once they arrive.

Many warehouse personnel and supervisors are left out of meetings because management feels they cannot add any value to the meeting.

Research the job progression within the warehouse. If you are a picker, what is the next position above that? Document what position you want next. If the next position from picking is receiving, then when a position for inventory control becomes available, and you are a picker, you will know why you may not be considered. Find out what it takes to move to the next position and begin working on it.

Learn the names of the company’s top 25 customers. You have to know who patronizes your organization. But you really have to know who spends the most with your organization. I know every small customer has the potential to become a big customer, but as the legendary University of Alabama football coach, Bear Bryant, said, “Potential means you ain’t done it yet!”

Finish what you start. When assigned a task, complete it. Then tell your supervisor, who assigned it to you, that it was completed and that they can scratch it off of their list. After they scratch it off, ask, “What’s next?”

Keep a note pad and take notes. A lot of warehouse supervisors do not keep accurate notes. They think they can remember everything. Therefore, make it your responsibility to take notes of the tasks you are assigned. This shows your supervisor you are a conscientious employee.

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Rene Jones is the founder of Total Logistics Solutions Inc., a warehouse efficiency consulting company headquartered in Burbank, Calif., and the author of “This Place Sucks! What your warehouse employees think about your company and how to change their perceptions.” Jones can be reached at (818) 353-2962 or by e-mail at Rene.jones@logisticsociety.com. Visit the firm’s Web site at www.logisticsociety.com.Managing Today’s Work Force: One Size Does Not Fit All!Every branch of the military teaches its service people how to be good leaders by first being excellent followers. One learns how to take orders, ask the correct questions (when needed), and how to execute. Those in the military learn the importance of execution as a follower. What a weird concept.But in the private sector, “leaders,” also known as “management, department heads and supervisors,” often forget that the people they are leading sometimes do not want to go where they are taking them.

Many have said a good leader should have the ability to take people where they ought to be instead of where they want to be, but today’s work force tends to want to know several things before following:

• Where you are taking us?
• Why should we be there?
• What will happen when we get there?
• How long will it take to get there?

Today’s employee pool wants to know the problem and not just the solution. Some would say these are generational differences. Today’s leaders need to realize that a key to good leadership is adaptability. Most executives want employees to adapt to their leadership style instead of their leadership style adapting to the individuals following them.

On the flip side, a key to being a good employee is also adaptability. In the military, one has to adapt to surroundings immediately.

Employees must realize that no boss is going to be perfect. Supervisors are not always going to make decisions in the best interest of their direct reports. Every manager is going to be different. If you don’t realize these three fundamental things, you will go from job to job looking for opportunities that may never come.

When it comes to your supply chain–and more specific–your warehouse operations, you never want to hear the words “I didn’t know.”
Here’s a quick assessment of where these three words hurt the most. Beginning with when your product arrives in receiving. We have all heard:
1.    I didn’t know the product had to be received today.
2.    I didn’t know nonstocks should be received differently from regular product.
3.    I didn’t know I should not have received the product site unseen.

Your receiving department is responsible for taking in the daily fuel required to operate your warehouse. The words “I didn’t know” should not be a part of their vernacular.

Next comes picking:
1.    I didn’t know that item was part of a component.
2.    I didn’t know the product had not been received when I took it from receiving.
3.    I didn’t know I was supposed to write the backorder quantity on the pick ticket.

Picking accounts for 55% of your warehouse related costs. Enough said.

Delivery personnel:
1.    I didn’t know that order had to be delivered today.
2.    I didn’t know some of the order was left off the truck until I arrived at the customer’s site.
3.    I didn’t know the customer was supposed to give me a check.

Warehouse supervisor:
1.    I didn’t know our employee turnover was so high.
2.    I didn’t know our inventory was so inaccurate.
3.    I didn’t know the order wasn’t supposed to ship until next week.
4.    I didn’t know the customer had people waiting on the jobsite.

Every initiative you want to implement will be affected by the competency of your warehouse supervisor. If they are saying, “I didn’t know,” your supply chain is in trouble.

Customer service/contact center
1.    I didn’t know the customer was on hold.
2.    I didn’t know the product was on reserve for another customer.
3.    I didn’t know I was supposed to check with the warehouse before I told the customer we could meet their deliver date.

We all know that distribution is a cash-intensive business, and that you have to be prepared for just about anything. There is simply too much at stake for your employees to use the words, “I didn’t know!”

Inadequate training, employee turnover and mismanagement are all too blame when one of your employees don’t know what they should. Our economy is changing which means now is the time to invest in your employees by adequately training them; invest in your processes by objectively analyzing them; and invest in your customers by delivering what they want, when they want it, at a competitive price. If you don’t, you may find yourself saying, “I didn’t know our customers were so unhappy.”

Rene Jones is the founder of Total Logistics Solutions (www.logisticsociety.com), a warehouse efficiency company.

As a distribution professional, you have several key performance indicators you are always aware of. The operations and fulfillment field includes many KPIs–quantifiable measurements that reflect the success factors of an organization.

But which warehouse KPIs are in your “Fav Five?” Here are mine, in descending order.

5. Returns processed
By this I mean returns processed as a result of incorrect product being shipped, or that the warehouse made a mistake. If you do not accurately track this metric, how do you know the effectiveness of your warehouse staff? You don’t!

4. Inventory movement
When was the last time you took a long, hard look at where your product is located within your warehouse? Most organizations don’t do this regularly—and they should. Did you know that 20% of your product is picked for 80% of your orders? And 55% of your pickers’ and receivers’ time is spent traveling to and from your locations? That’s why this metric is on my list.

3. Employee turnover
From recent studies, 40% of employees polled said they were actively looking to change jobs. The average employee will be with your organization for four years or less. A warehouse employee will leave your company for less than 50 cents more an hour–less than $4 more a day. How do you reduce turnover? That’s a whole other article, but keep in mind that “employees don’t leave bad companies, they leave bad managers.”

2. Inventory accuracy
If your pickers and receivers spend 55% of their time traveling to and from your locations, and the product is wrong when they get there, what does that do to the productivity in your warehouse? Several things—all of them bad. For one, it prevents receiving from being received and put away the day it arrives. It also means that returns may not be processed for weeks, and that orders will not be shipped 100% on-time. It can even prevent your warehouse from being cleaned. When it comes to inventory accuracy, your KPI cannot be based on the results of your annual physical. The value of your inventory can be as high as 20% of your annual sales revenue. If this metric isn’t in your Fav-Five, what you are measuring is irrelevant.

1. Profitability
There are a lot of things organizations measure, but let’s face it, the most important metric we all track is profitability. Without profit there will be no cash to grow. We all know we measure what we value. And that is why we place such an emphasis on sales metrics. Now that you have my distribution center Fav-Five, it’s time to think about your own. I’ll leave you with one more thought: In a rising tide, no one notices the rocks on the bottom of the river. But when the water recedes and the rocks begin tearing up the bottom of the boat, everyone wants to know how those rocks got there. By then, it’s too late. The water is definitely receding—are there rocks under your boat?

Rene’ Jones is the founder of Total Logistics Solutions, Inc. (www.logisticsociety.com) which as recently named, “One of the top 100 Supply Chain and Logistics Providers for 2007”. Rene’ is the author of the acclaimed book, “This Place Sucks (What your warehouse employees think about your company and how to change their perceptions!”). He can be reached at info@logisticsociety.com or www.logisticsociety.com