Strengthening your supply chain one link at a time.
Introduction
In today’s rapidly evolving landscape of distribution and fulfillment, automation has become a game-changer. A decade ago, warehouses were bustling with employees manually picking orders, either by walking or using forklifts. Fast forward to today, and the scene is dramatically different. Bots and unmanned lifts now transport products to conveyors and workstations, where stationary employees package goods delivered by these automated systems. This transformation has not only revolutionized the environment and equipment but also work processes and management techniques. Also, continuous data streams from automated systems and dashboards provide us with a wealth of information.
Despite these advancements, we frequently encounter clients who have not been able to fully realize the benefits of their automated solutions. Additionally, site leaders may not fully understand how to utilize the readily available data and performance metrics. Without this knowledge, leaders can struggle to identify the need for adjustments to their workflow, workforce, customers, and/or equipment. Consequently, senior leaders are often left wondering if investing in technology and automation was the correct future strategy for their organization.
This leads us to the question: How can you effectively move an organization into the age of automation and get the results you want?
The answer can be found in the discipline of Operational Excellence.
Understanding Operational Excellence
Operational Excellence is defined as a systemic approach to improving performance through the creation of a continuous improvement culture. The goal of Operational Excellence is to implement ideas and principles at all levels of the organization that will promote the reduction of waste, improve the quality of work, and increase the efficiency of the operation.
But wait…. Isn’t that what automation is supposed to do?
The short answer to that question is yes; the long answer is… well, it’s complicated. Let me provide an example for context.
A distribution center is struggling to find a reliable labor pool to staff their 24/7 operation. Additionally, the operation struggles to meet cutoff times for truck loadings. Finally, the site needs more storage locations to support business growth.
After careful consideration, the organization decides to put in a goods to person system. By doing this, the warehouse will be able to move pick face locations from the storage racks, creating additional needed storage, as well as increase the number of pick faces while creating better pick density within their current warehouse. The leadership team believes they will also be able to decrease the total labor needed to support picking and increase the speed at which things move by creating a shorter path to the OB dock.
The Importance of Operational Excellence in Automation
The solution the organization developed seemed well thought-out and completely reasonable to solve the problem. Unfortunately, a year after implementation, the site was still struggling with labor availability and the ability to make cutoff times. While they had cut the labor need for picking, they still needed MHE operators and loaders; the team never had enough people to handle the volume. The leadership team was now questioning if automation was the right solution for their business.
The above situation is unfortunately very common… not because automation cannot solve a problem, but as in this case, it solved the wrong problem. Had a labor study been conducted, the organization might have found that it was harder to staff MHE operators than pickers or loaders. An employee survey might have discovered the DC did not offer competitive pay for experienced operators and turnover statistics would have shown that 75% of the company’s MHE operators left after 1 year. Because MHE operators replenish products to the pick face, if there are not enough operators, you will have delay in pick operations and risk missing cutoff times.
In this particular example, no matter what automated solution was implemented to solve the pick problem, it would not solve the higher priority concern around MHE operator retention.
You might be thinking, what does this have to do with Operational Excellence? Well, Operational Excellence is a critical component of an effective operation, even in the age of automation. Automation can solve significant amounts of issues; however, it is not a substitute for a well-structured and efficient operational framework. After all, automation is only a technology and can’t do the following:
Only the discipline of Operational Excellence can do these things. Even more important, Operational Excellence can provide insight into potential risks prior to them becoming problems. It is not limited to one key metric or one problem to solve, instead it is a holistic look at facility conditions, operational process, project readiness, employee engagement, standardization, labor management, systems, customer needs, change management, workplace efficiency, waste reduction, strategic alignment, and continuous improvement opportunities.
Conclusion
While automation offers remarkable advancements and efficiencies in distribution and fulfillment, it is not a panacea for all operational challenges. The true key to success lies in fostering a culture of Operational Excellence. This systemic approach ensures that every aspect of the organization is optimized, from labor management to process standardization, and employee engagement to strategic alignment. By prioritizing continuous improvement and holistic analysis, organizations can implement effective automated solutions and anticipate / mitigate potential risks.
Engaging with a third-party consultant, like St. Onge, can provide invaluable insights and guidance, helping leaders navigate the complexities of cultural change and achieve sustainable operational excellence. Automation is a powerful tool, but it is the disciplined practice of Operational Excellence that drives long-term success and growth.
—Dawnya Brown, St. Onge Company
