Turn Your DC Into an Efficiency Center This Holiday Season

luther webbGuest blog by Luther Webb, director, operation and solutions consulting, MHI member company, Intelligrated

As the holidays approach, high-stakes distribution and fulfillment operations must be more efficient than ever to serve immense order volumes and meet service level agreements.

Forecasts predict that the 2016 holiday season will bring $95 billion in e-commerce sales, the first time e-commerce will account for 10 percent of total holiday retail sales. And, according to research from last holiday season, November and December drive 30 percent more ecommerce revenue than non-holiday months.

Not only is the holiday rush fast approaching, but distribution centers continue to face labor challenges, especially retaining quality labor capable of delivering on promises for fulfillment accuracy and speed. How can operations overcome a shrinking talent pool and rising labor costs while meeting the increased demands of the holiday season?

Don’t forget operational fundamentals

A lack of attention to basic essentials plagues many warehouses. Focusing on operational best practices like workspace sanitation, slotting upkeep, preventive maintenance and ongoing training builds a foundation for optimized throughput and service quality. The path to correcting fundamentals starts with a daily walk. Before the rush, observe processes in action and evaluate the how and why of each task to reveal opportunities for immediate improvement and start further investigation into major process enhancements.

Avoid process islands – keep the entire operation in mind

The holiday season brings increased demand for a variety of specialized value-added services to add a personal touch and make gifts unique. However, this adds another process island to the DC, splintering operations and making it difficult for managers to maintain a comprehensive view of all processes. This causes difficulty in determining staff requirements, measuring productivity and monitoring output to ensure that sustained progress from each individual process works in harmony with the overall flow path from receiving to shipping. The lesson? Don’t introduce a single process without considering and planning for its effect on the overall operation.

Emphasize workplace relationships as much as the work itself

In addition to basics like safety, lighting, airflow, proper tools and ergonomics, desirable workplaces are built on relationships. The relationship between manager and employee establishes trust and communication vital to operational success. Relationships between associates provide opportunities for mentoring, boosting morale and establishing a culture of success that permeates the operation. Ultimately, empowering staff with the direct, meaningful relationship between their work and the customer’s shopping experience improves job satisfaction and reinforces the importance of performance and quality measures.

Temporary workers commonly augment the workforce to handle peak volumes. Getting the most out of new employees means creating an environment conducive to success and establishing appropriate expectations. Labor management software can provide training curves to allow management to better evaluate progress of associates as they get up to speed.

Fulfillment is only half the battle

Just as the holidays bring an increase in sales, there comes a spike in returns, too, making holiday e-commerce fulfillment just the first step. Returns account for eight percent of all holiday sales, meaning peak season does not quite come to an end December 25. For tips to optimize reverse logistics, read this article from Supply Chain 24/7.