continuous improvement in warehousing

Setting Continuous Improvement Priorities in Warehouse Operations

M-16

http://www.tompkinsinc.com

TOMPKINS ASSOCIATESSupply Chain Excellence

Worldwide Central Campus8970 Southall RoadRaleigh, NC 276161-800-789-1257(919) 876-3667(919) 872-9666 FAXwww.tompkinsinc.com

U.S. Office LocationsCaliforniaFloridaGeorgiaIllinoisNorth Carolina

Global Office LocationsAustraliaCanadaMexicoThe NetherlandsUnited Kingdom


Tompkins Associates


Executive Summary

This monograph presents a method of setting continuous improvement priorities for ware-

house operations. The Team-Based Continuous Improvement Diagnostic Survey allows a firm to

benchmark its current status on:

n Level of warehouse excellence

n Acceptance of continuous improvement

n Cultural progressiveness or lack of cultural progressiveness

n Acceptance of a shared direction for a company

n Priorities for warehouse continuous improvement

Each of these topics is briefly discussed and the sources of additional information are given.

All firms are encouraged to use the diagnostic survey as a tool to guide their pursuit of warehouse

continuous improvement.

Tompkins Associates


Table of Contents

EXECUTIVE SUMMARY ............................................................................................. i

1.0 Setting Continuous Improvement Priorities .................................................... 1

2.0 The Team-Based Continuous Improvement Diagnostic Survey for

Warehouse Operations .................................................................................... 3

3.0 Interpreting the Team-Based Continuous Improvement Diagnostic

Survey Results................................................................................................. 4

4.0 Warehouse Excellence .................................................................................... 4

5.0 Continuous Improvement ................................................................................ 8

6.0 Culture ............................................................................................................ 9

7.0 Model of Success .......................................................................................... 10

8.0 Prioritized Warehouse Requirements of Success .......................................... 11

9.0 Path Forward ................................................................................................. 12

APPENDIX A: Team-Based Continuous Improvement Diagnostic Survey for

Warehouse Operations

APPENDIX B: Team-Based Continuous Improvement Diagnostic Scoring Sheet

APPENDIX C: Team-Based Continuous Improvement Diagnostic Survey

Interpretation Sheet

Tompkins Associates

Page 1Setting Continuous Improvement Priorities in Warehouse Operations

1.0 Setting ContinuousImprovement Priorities

“Successful Warehousing Operations

Must Be Based Upon A Long-Term

Commitment To A Broad-Based,

Common Sense, Structured Process Of

Continuous Improvement.”

“More Important Than Doing Things Right

Is Doing The Right Things.”

Companies with world-class warehous-

ing operations will adopt continuous improve-

ment. The difference between WORLD-CLASS

WAREHOUSING OPERATIONS and WORLD-

CLASS WAREHOUSING OPERATIONS

and WORLD-CLASS WAREHOUSING

OPERATIONS is the approach they use to

set continuous improvement priorities.

There are four potential approaches to

setting continuous improvement priorities:

1. Bottom-Up

2. Top-Down

3. Top-Down Consensus

4. Broad-Based Consensus

The first two approaches are unstructured

and are heavily impacted by the perspective

of the persons setting the priorities. With the

bottom-up approach, priorities are established

by individuals with an in-depth understand-

ing of a small portion of the firm. The priori-

ties that typically result from the bottom-up

approach have very limited scope and can be

easily improved. The difficult, broader im-

pact priorities are not addressed. Often, after

several of the easily addressed bottom-up pri-

orities are handled, the organization “runs out”

of things to improve. Obviously, the company

has not reached utopia, it has simply resolved

the obvious issues and it lacks the perspec-

tive to identify the broader, more significant

opportunities.

The second approach to prioritization,

top-down, may or may not result in the iden-

tification of the greatest impact prioritie.

Never-theless, whether the priorities are right

or wrong is not the true issue. Priorities man-

dated in a top-down manner will not be widely

accepted as the persons involved with creat-

ing continuous improvement were not active

participants in establishing the priorities. For

this reason, participation lacks enthusiasm and

the process of continuous improvement is

stifled. Thus, even if the right priorities are

identified, the true potential of TEAM-

BASED CONTINUOUS IMPROVEMENT

will not be realized.

Understanding the problems with the first

two approaches, we suggested a broad-based

questionnaire to identify the priorities in

world-class warehousing operations. This

questionnaire is given in Table 1.1. The

thought behind the questionnaire was that by

asking a broad base of people for their

prioritization, several different perspectives

could be used to establish a consensus on the

true continuous improvement priorities for the

firm. Unfortunately, this approach did not

work. Instead of individuals sharing their true

perspectives, they completed the questionnaire

in accordance to how they believed upper man-

agement wanted them to complete it. Thus,

what was obtained was not the best priorities

Tompkins Associates


Table 1.1: Warehouse Management Priorities Questionaire

1. Out of a total of 100 points, rate the importance of pursuing the following require-

ments of success (the higher the points assigned, the greater the importance).

A. Professionalism

B. Customer Awareness

C. Measurement

D. Operations Planning

E. Centralization

F. Public Warehouses

G. Pace

H. Variety

I. Flexibility

J. Uncertainty

K. Integration

L. Inventory Accuracy

M.Space utilization

N. Housekeeping

O. Order Picking

P. Human Resources

Q. Team Players

R. Automation

S. Automatic Identification

T. Control Systems

Total 100

Requirements of Success Points

2. State the goal that you think should be established fot eh five highest priority

requirements of success.

Requirements of Success Goal

1.

2.

3.

4.

5.

Tompkins Associates


for continuous improvement, but opinions of

what upper management was thought to de-

sire. Even though this involved a broad base

of people, what really resulted was a top-down

consensus of what people thought were up-

per management’s priorities.

What was needed was a survey that ex-

tracted from a broad base of people what they

believed, from their perspectives, were the true

priorities for continuous improvement. Such

a survey has now been developed and has been

successfully used to establish the true priori-

ties for companies to pursue continuous im-

provement.

2.0 The Team-BasedContinuous ImprovementDiagnostic Survey forWarehouse Operations

The Team-Based Continuous Improve-

ment Diagnostic Survey For Warehouse Op-

erations is a tool that may be used to define a

broad-based consensus of the continuous im-

provement priorities for a warehouse. The

survey is presented on pages 13 through 21 of

this monograph and the Team-Based Continu-

ous Improvement Diagnostic Survey Scoring

Sheets are given on pages 23 and 24. The

Team-Based Continuous Improvement Diag-

nostic Survey Interpretation Sheet, found on

pages 25 and 26, allows each company to de-

fine its Team-Based Continuous Improvement

Acceptance as well as its Warehousing Pri-

orities. The survey consists of 98 pairs of

questions in which each person responding to

the survey is asked to place a weight on each

question (0 - 5) to indicate the relative accep-

tance of each question, where the total weight

for each pair of questions is 5. For example,

consider the pair of questions below:

n I love hot dogs.

n I love pizza.

If I hated hot dogs and loved pizza I

would rate Question 1 “0” and Question 2 “5”.

If I loved hot dogs and hated pizza I would

rate Question 1 “5” and Question 2 “0”. If I

liked both hot dogs and pizza, but like pizza a

little better I would rate Question 1 “2” and

Question 2 “3”.

The 98 questions consist of:

n Questions on an organization’s accep-

tance of continuous improvement

n Questions on an organization’s culture

n Questions on an organization’s model

of success

n Four questions for each of the 20

Warehousing Excellence Require-

ments of Success

Once a survey is completed, the Scoring

Sheet and the Interpretation Sheet may be used

by individuals and companies to define their:

n Level of warehouse excellence

n Acceptance of continuous improve-

ment

n Cultural progressiveness or lack of

cultural progressiveness

n Acceptance of a shared direction for

the company

n Priorities for warehouse continuous

improvement

Tompkins Associates


3.0 Interpreting the Team-Based ContinuousImrpovement DiagnosticSurvey Results

The five key outputs from the survey are:

n Warehouse excellence

n Continuous improvement

n Culture

n Model of success

n Prioritized warehouse requirements of

success

The following sub-sections present a

brief overview of these five topics. The best

source for additional information on continu-

ous improvement is the book Winning Manu-

facturing. The best source for warehouse

requirements of success is the video Ware-

housing Strategies. The best source for addi-

tional information on culture and models of

success is the video tape Manufacturing:

Making A Difference.

4.0 Warehouse Excellence

Today’s warehouses are marked by cer-

tain trends which must be understood prior to

implementing any new strategies on your jour-

ney to warehousing excellence. The first of

these trends is a reduction of all inventories.

Inventory is being recognized as an even more

important area of cost reduction than labor.

Along with inventory reduction comes some

form of Just-In-Time. Not only must there be

less inventory, the inventory must move from

supplier to user with as little interim storage

as possible. There is also an increased amount

of customization taking place. In order to sat-

isfy the customer’s demands, companies are

increasing the product mix - more styles, col-

ors, features, sizes - and they are also respond-

ing to the customer’s desire for faster delivery.

At the same time, many companies are find-

ing that warehouse space is being taken over

by manufacturing. In order to improve flex-

ibility and quality, companies are installing

manufacturing equipment in the space once

reserved for warehousing. Finally, the em-

phasis on improved quality has been extended

to the warehouse in the form of accurate, com-

plete orders shipped promptly in image-en-

hanced packaging with accurate data tracking.

Without recognizing these trends, any

planning for today’s warehouses will be based

upon an obsolete vision of the direction that

warehousing is headed. While strategic plan-

ning is one of the most important functions of

warehouse management, a prerequisite to stra-

tegic planning is the establishment of a clear,

long-term, consistent vision of successful

warehousing in the 1990s. Although the spe-

cific vision may vary somewhat from com-

pany to company, a number of fundamental

strategies must comprise the core of the vi-

sion. Here, then, are the twenty requirements

of warehouse excellence.

1. Professionalism: Warehousing must

be viewed as a critical step in the material flow

cycle and not as a necessary evil.

Tompkins Associates


n Warehouse managers must be consid-

ered part of the management team and

not second-class citizens.

n Warehouse management and employ-

ees will be trained to handle their

tasks and not viewed as overhead.

n Management will understand the true

value of warehousing and the reality

that warehousing often is one of the

last frontiers for improvement.

2. Customer Awareness: Successful

warehouse operations must have a high regard

for the customer, must know the customer’s

requirements, and must consistently meet

these requirements.

n Warehouses must be measured by

how well they meet the customer’s ex-

pectations.

n Warehouses will function as a support

activity for customers and will be anx-

ious to fulfill customer requirements.

n Warehouse and customer adversarial

relationships will be eliminated.

3. Measurement: Warehouse standards

must be established; performance must be

measured against these standards and timely

actions must be taken to overcome any devia-

tions.

n Warehouse management will produce

monthly reports on space utilization,

labor utilization, damage, inventory

accuracy and equipment utilization.

n Management will view warehousing

from a positive perspective because

of the information they receive about

warehouse performance.

n Warehouse measurements will be

used to plan future capacity.

4. Operations Planning: Systems and

procedures must be put into effect that will

allow the warehouse manager to proactively

plan the operations as opposed to reactively

responding to external circumstances.

n Warehouse managers will truly man-

age their warehouse.

n Firefighting will be minimized.

n Warehouse plans will be established

that will result in the warehouse be-

coming a strategic weapon for cus-

tomer service.

5. Centralization: The trend must be

toward larger, centralized warehouses instead

of smaller, decentralized warehouses.

n Continued improved transportation

responsiveness and reliability will

support the trend towards fewer ware-

houses.

n The logistics information and mate-

rial movement systems will be more

integrated.

n Systems and procedures will be put

in place to achieve continuous flow

distribution.

6. Third Party: More intelligent use of

third party distribution organizations will be

the norm.

Tompkins Associates


n As the true costs of warehousing are

understood, third party distribution

services will be seen as a viable al-

ternative.

n Third party distribution services will

continue to improve, reduce costs, and

broaden the range of tasks performed.

n Third party distribution organizations

will be viewed more as partners than

service providers.

7. Pace: The reduction of lead times,

shorter product lives, and increased inventory

turnover will result in an increase in the pace

of the warehouse.

n Warehouses will be required to be

more responsive and will accommo-

date this requirement by working

smarter, not harder.

n The pace of warehouse changes will

be greater than in the past and this

pace will be expected and accepted.

n Systems will be put into place to sup-

port continuous flow warehouse op-

erations.

8. Variety: More different SKUs and

more special customer requirements will re-

sult in an increase in the variety of tasks per-

formed in the warehouse.

n Warehouses will be responsive to spe-

cial customer packaging, pricing and

labeling requirements.

n Warehouses will be required to do op-

erations that were traditionally thought

to be manufacturing operations.

n Systems and procedures will be put

in place so that we can handle orders

the way the customer desires.

9. Flexibility: Due to the increase in

warehouse pace and variety, all warehouse

systems, equipment and people will be more

flexible.

n Warehouse organizations will be

structured so as to provide the maxi-

mum flexibility.

n Warehouse employees will be cross-

trained to handle a wide variety of tasks.

n Warehouses will make better use of

part-time and temporary work forces.

10. Uncertainty: All uncertainty will

be minimized; discipline will be increased.

n Warehouse employees will be held ac-

countable for doing it right the first

time. Checkers will be eliminated.

n Dock operations will be planned and

will function according to the plan.

n Exceptions and deviations will occur

infrequently, and when they occur,

they will be rectified quickly.

11. Integration: Activities within the

warehouse (receive, store, pick and ship) will

be more integrated and the warehouse will be

more integrated within the overall logistics

system.

n Operational synergy will occur as a

result of warehouse employees work-

ing together as a team.

Tompkins Associates


n The warehouse will no longer be an

organizational island, but will be in-

tegrated with manufacturing, market-

ing, transportation and the entire

organization.

n Communication networks will sup-

port the integration of the customer

to the warehouse and the entire orga-

nization.

12. Inventory Accuracy: Real-time

warehouse management systems will utilize

cycle counting to manage inventory accuracy,

and accuracy above 99% will be the norm.

n As management demands accurate in-

ventory, annual physical inventories

will be eliminated.

n The true purpose of cycle counting

will be understood as the proper man-

agement of inventory.

n Systems will be put in place to sup-

port ongoing cycle counting.

13. Space Utilization: Space will be

more efficiently and effectively utilized.

n Management will better understand

the cost of space and this will lead to

improved space utilization.

n Innovative material handling and stor-

age equipment will be installed to

minimize aisles and maximize cube

utilization.

n Random storage will replace assigned

storage.

14. Housekeeping: Quality housekeep-

ing will be a priority and a source of employee

pride.

n The fact that there is efficiency in or-

der will be widely understood.

n Warehouse facilities will promote a

high level of warehouse housekeep-

ing.

n Housekeeping discipline will become

a portion of the warehouse culture.

15. Order Picking: The criticality of

order picking will be understood, and proce-

dures and layouts will be designed to maxi-

mize picking efficiency and effectiveness.

n Orders will be pre-routed and pre-

posted to result in increased effi-

ciency.

n The issues of zone, batch and wave

picking will be understood and fully

evaluated in the design of the best

picking system.

n A wide variety of material handling

and storage equipment will be evalu-

ated in the design of an order picking

system.

16. Team-Based Continuous Improve-

ment: The power of the people will be un-

leashed via a methodical team-based process.

n Warehouses will be leadership driven

and self managed.

n Employees will be actively involved

with teams and the process of con-

tinuous improvement.

Tompkins Associates


n Warehouse employee development,

alignment, and participation will be

an important priority.

17. Continuous Flow: There will be a

clear focus on pulling product through the lo-

gistics system and not building huge invento-

ries.

n DRP and EDI will support continu-

ous flow.

n Inventory turns will be a high priority

throughout the organization.

n Customized warehousing will allow

for a reduction in storage SKUs while

increasing the SKUs offered to our

customers.

18. Warehouse Management Systems:

Real-time, bar code based, Rf communication

Warehouse Management Systems (WMS) will

be required to meet today’s requirements.

n WMS will be real-time, bar code

based, RF driven systems that maxi-

mize warehouse performance.

n WMS will be planned, justified, and

implemented by professionals who

truly understand warehousing.

n All warehouse employees will receive

the appropriate level of competency-

based development for their tasks.

19. Total Costs of Logistics: The goal

will be to minimize the total life cycle costs

of logistics, from order submission to prod-

uct delivery, while providing excellence in

customer service.

n There will be a clear understanding

and awareness of the costs of logis-

tics.

n Logistics will be viewed as an area

for considerable performance im-

provement.

n Logistics partnerships will support

both cost reduction and customer ser-

vice improvements.

20. Leadership: There must be a bal-

ance between the control aspects of manage-

ment and harnessing the energy of change to

create peak-to-peak performance of leader-

ship.

n Leaders will understand their roles of

achieving peak-to-peak performance.

n Leaders will establish a culture that

is progressive, participative, vision

based, and encourages growth and

learning.

n Leaders will actively communicate di-

rection and performance and work to

achieve organizational alignment.

5.0 ContinuousImprovement

Continuous improvement is the founda-

tion for successful companies and warehous-

ing excellence. The difference between

continuous change and continuous improve-

ment is that continuous improvement is based

upon a consistent direction of where the firm

is headed. Continuous improvement is the

never-ending process of improving today,

improving tomorrow, improving the next day

Tompkins Associates


and so on. Continuous improvement firms do

not believe in implementing programs nor in

optimization. Continuous improvement firms

understand that programs tend to come and

go but the process of continuous improvement

is permanent and never-ending. Continuous

improvement firms understand that today’s

optimal solution is next month’s acceptable

solution, next quarter’s marginal solution and

next year’s obsolete solution. Continuous

improvement warehouses realize that

everyone’s job is to improve the firm’s per-

formance and that leadership must understand

that its greatest asset is the power of the

people. Harnessing the power of the people

and empowering teams to continuously im-

prove the firm is a prerequisite of warehous-

ing excellence. Every sucessful firm will

adopt the process of continuous improvement.

6.0 Culture

Every person has a personality and ev-

ery firm has a culture. In fact, a good defini-

tion of culture is that culture is the personality

of a firm. Your firm has a culture. This cul-

ture has evolved and now must be understood

and often changed. The culture of a firm may

be categorized as:

Type I: Static Consistency

Type II: Dynamic Inconsistency

Type III: Dynamic Consistency

Type I firms resist change. They pride

themselves on maintaining the status quo and

seldom realize there is an opportunity to im-

prove. Type I managers believe:

1. “We have optimized our operations;

there is no room for improvement,”

and/or

2. “We have always been profitable; why

should we change anything?”, and/or

3. “If it ain’t busted, don’t fix it.”

Type I organizations will not only not

win, they will not even survive.

Type II organizations have a culture of

dynamic inconsistency. They realize they are

not successful and are actively installing new

programs. They are busy organizations. Ev-

eryone is on a task force or two, but no one

has a chance to work as the entire day is spent

in meetings. There is no shared direction of

where they are headed. Dynamic Inconsis-

tent firms are pursuing Management By Fad

(MBF).

Table 6.1 presents some of the programs

that have been and continue to be pursued in

Type II firms.

Each person within a Type II firm has

his or her own direction. Although there are

pockets of brilliance, the whole of the firm is

not improving. Managers within Type II or-

ganizations are frustrated; the harder they

work, the more they seem to lose. A Type II

culture is dangerous and will result in a

company’s demise if not replaced with a Type

III culture.

Type III organizations truly understand

the meaning of dynamic consistency. Dynamic

indicates continuous improvement, and con-

sistency indicates a shared understanding of

direction. Firms with a Type III culture are

driven by an “improve, improve, improve”

mentality based upon a consistent direction

Tompkins Associates


Activity-Based Accounting

Computer-Aided Order Picking

Computer-Based Information System

Computer Integrated Distribution

Crossdocking

Decision Support System

Direct Store Drops

Distribution Requirement Planning

Efficient Consumer Response

Fluid Logistics

Integrated Logistics

Just-In-Time

Paperless Picking

Paperless Warehouse

Participatory Management

Quick Response

Quality Function Deployment

Reverse Order Picking

Supply Chain Management

Third Party Distribution

Total Quality Management

from leadership. Firms with successful ware-

house operations will have a culture of dy-

namic consistency.

7.0 Model of Success

Successful firms will be characterized by

a dynamic consistent culture. The shared con-

sistent direction of the firm can best be ex-

pressed by a Model of Success. The five

elements of a Model of Success are:

Table 6.1: Our Pursuit of Fads

1. Vision: A description of where you

are headed.

2. Mission: How to accomplish the vi-

sion.

3. Requirements of Success: The be-

liefs that will guide us to accomplish

our mission.

4. Guiding Principles: The values we

practice as we pursue our visions.

5. Evidence of Success: A series of past

tense, single focus statements that de-

scribe measurable results character-

izing the organization when the vision

is being achieved.

The first four elements can be graphically

presented, as shown in Figure 7.1. This bull’s

eye approach can serve as the target of a com-

pany where the Evidence of Success is used

as a yardstick against which progress is mea-

sured.

Figure 7.2 illustrates the process of vi-

sionary pursuit. The prioritized Requirements

of Success are the focus of the continuous im-

provement process, using the Guiding Prin-

ciples and the Mission to advance an

organization towards its Vision. Team-based

continuous improvement can only occur

within the context of a Model of Success.

Firms with successful warehousing op-

erations will have implemented the visionary

pursuit as presented in Figure 7.2. The con-

tinuous improvement process that should be

pursued is as shown in Figure 7.3. The key to

the continuous improvement process in Fig-

ure 7.3 is the fact that it is never-ending. The

application of the Figure 7.3 Continuous Im-

Tompkins Associates


provement Process within the context of the

Figure 7.2 Visionary Pursuit results in team-

based continuous improvement.

8.0 Prioritized WarehouseRequirements of Success

As was stated in the last section, Require-

ments of Success are basic beliefs that will

guide a firm to its Mission. We believe the

requirements of success form the science of

warehousing and are the same for all ware-

housing organizations.Figure 7.1: Model of Success

Figure 7.2: Visionary Pursuit

Figure 7.3: Continuous Improvement Process

Tompkins Associates


We believe all organizations must em-

brace the 20 Requirements of Success as stated

in section 4.0 in this monograph.

9.0 Path Forward

The next step is for you to compile the

results of the Team-Based Continuous Im-

provement Diagnostic Survey For Warehouse

Operations. The results of the survey will

define your path forward. Respond to the

identified path forward and then, in four

months, use the survey again. Your progress

will be noticeable and you will be on your

way to winning the war. You will have a cul-

ture of continuous improvement and you will

be pursuing the highest priority opportunities.

Tompkins Associates


Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations

Each person has a different perspective on the present status of the warehouse and the priori-

ties which must be pursued to bring about improvement. This survey, when combined with the

surveys of others in your company, will allow us to develop a consensus view of your status and

your priorities. The following items are arranged in pairs (“a” and “b”) and each member of the pair

represents a possible description of your present operation. Rate the descriptions by how true they

are for your operation by giving them a score of 0 to 5 (0 meaning absolutely not true and 5 mean-

ing absolutely true). The scores for “a” and “b” of each pair must add up to 5 (i.e., 0 and 5, 1 and 4

or 2 and 3). Do not use fractions such as 2 1/2.

Score Question

1a ______ Receiving, storing, picking and shipping are each performed as separate functions.

1b ______ Receiving, storing, picking, and shipping work as a team.

2a ______ We frequently introduce new programs to improve our competitiveness.

2b ______ We are methodically pursuing the process of continuous improvement.

3a ______ Warehouse employees are cross-trained to handle a wide variety of tasks.

3b ______ Warehouse employees typically handle one function.

4a ______ We use assigned storage locations.

4b ______ We use random storage locations.

5a ______ Management understands the cost of space.

5b ______ Management does not factor in the cost of space in planning.

6a ______ We have a standard auto identification system between our vendors, manufacturers,

and users.

6b ______ We do not have ability to automatically transfer data with other organizations.

7a ______ Housekeeping is not promoted by management.

7b ______ The fact that there is efficiency in order is widely understood.

8a ______ Excessive analysis of alternatives exists within our company.

8b ______ There is a good balance between analysis and visioning pursuit within our company.

Tompkins Associates


9a ______ Our warehouse is measured by how well we meet customer expectations.

9b ______ We do not measure customer satisfaction in the warehouse.

10a _____ Warehouse operations are structured to provide the maximum flexibility.

10b _____ Our systems, equipment, and people are not able to meet today’s requirements.

11a _____ Orders are pre-routed and pre-posted.

11b _____ Orders are not efficiently routed.

12a _____ We have not evaluated new picking methods for our orderpicking system.

12b _____ We evaluated and use either zone, batch or wave picking.

13a _____Material handling and storage equipment minimize aisles and maximize cube utilization.

13b _____Our material handling and storage equipment do not support maximum space utilization.

14a _____ Public warehouses are evaluated as viable alternatives.

14b _____ Management does not understand public warehousing values.

15a _____ We do not have real-time information in the warehouse.

15b _____ Automatic identification is our foundation for real-time warehouse control.

16a _____ We have small, decentralized warehouses.

16b _____ We have large, centralized warehouses.

17a _____ Warehousing is considered a necessary evil.

17b _____ Warehousing is viewed as a critical step in material flow.

18a _____ Employees receive training “on the job.”

18b _____ A formal training program exists that addresses general as well as technical needs.

19a _____ My company has always been profitable; there is no need to change.

19b _____ My company is profitable and is always changing.

20a _____ Our warehouse does not have many formal standards.

20b _____ Warehouse management measures space utilization, damage, and inventory accuracy.

Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)

Tompkins Associates



21a _____ We have optimized transportation responsiveness.

21b _____ We are continually improving transportation responsiveness and reliability.

22a _____ We are always busy, but we don’t seem to be improving.

22b _____ We are continually improving.

23a _____ We are not a support activity for our customers.

23b _____ We fulfill all our customer requirements.

24a _____ We are unsure how to react to business and the economy.

24b _____ We know what it will take to be successful in our business.

28b _____ No clear performance standards exist.

29a _____ Inventory accuracy is below 95%.

29b _____ Inventory accuracy is above 95%.

30a _____ We are changing in several directions at once unsuccessfully.

30b _____ We have a clear organizational plan for improvement.

31a _____ We have an established vision and mission.

31b _____ Due to business unpredictability, we have no formal mission.

32a _____ We use cycle counting to manage inventory accuracy.

32b _____ We use annual physical inventories to manage inventory accuracy.

33a _____ Management has a strong desire to control warehousing.

33b _____ Management is less concerned about control, but more concerned with continuous

improvement.

34a _____ Management views warehousing positively because of warehouse performance

reporting.

34b _____ Management is unclear about level of efficiency of warehouse.

35a _____ Management doesn’t see need to utilize automatic identification.

Tompkins Associates


35b _____ Management understands that automatic identification is pre-requisite to modern

warehousing.

36a _____ Warehouse is responsive to special customer packaging, pricing, and label require-

ments.

36b _____ Warehouse can handle only so many “specials.”

37a _____ People at the lowest levels understand the corporate vision.

37b _____ The corporate vision is only understood at the highest levels.

38a _____ Warehouse can not handle any more new assignments.

38b _____Warehouse can handle operations that were once thought manufacturing responsibility.

39a _____ Management has established clear corporate goals, but they are not well understood

or communicated through organization.

39b _____ Management goals are clear and well understood throughout organization and we are

following management’s plan for success.

40a _____ The decision process in our company moves at the proper pace.

40b _____ Decision making at our company is too slow.

41a _____ Warehouse staff feels like we are separate from rest of company.

41b _____ Warehouse staff functions as a team with manufacturing, marketing, transportation,

and rest of company.

42a _____ We have created a layout to best support orderpicking operations.

42b _____ Our layout is a liability in orderpicking.

43a _____ Housekeeping is a portion of our culture.

43b _____ Housekeeping is rarely brought up to employees.

44a _____ Warehouse automation is historically justified based on labor savings.

44b _____ The primary justification for warehouse automation is improved control.

45a _____ We do not have a warehouse control system.

45b _____ We have a warehouse control system.


Tompkins Associates


46a _____ Inventories are evil.

46b _____ Inventories are the result of how we run our business.

47a _____ Advanced technologies in warehousing are more easily embraced today.

47b _____ We can’t economically justify warehouse automation.

48a _____ We have multiple sources for the majority of vendor-supplied materials.

48b _____ We have reduced the number of vendors.

49a _____ We don’t have reliable information to plan future capacity.

49b _____ Warehouse measurements are used to plan future capacity.

50a _____ We are continually cramped for space.

50b _____ We have continuously improved our space utilization.

51a _____ Communications within our company are very good.

51b _____ Communications in the company are not good.

52a _____ We are looking for ways to work smarter, not harder.

52b _____ The reduction of lead times has created turmoil in the flow of material.

53a _____ We don’t know what our business will be like a year from now.

53b _____ We have a strategic business plan in place.

54a _____ Warehouse personnel have no pride over work area.

54b _____ Quality housekeeping is a source of pride for warehouse personnel.

55a _____ Firefighting happens on a daily basis.

55b _____ Firefighting is an exception, not the norm.

56a _____ Our systems and procedures cause frustration in handling customer desires.

56b _____ Our systems and procedures are designed to accommodate customer requests.

57a _____ Our employees are happy.

57b _____ The relationship between management and workers is stormy.


Tompkins Associates



58a _____ Warehouse changes are slow and not easily accepted.

58b _____ The pace of warehouse changes is expected and accepted.

59a _____ We have too many SKUs.

59b _____ We can handle the proliferation of SKUs now and in the future.

60a _____ We have a general understanding of where we want to go but not measurable goals.

60b _____ We have clearly defined, measurable goals.

61a _____ We are attempting to plan our warehouse control system without much analysis.

61b _____ We are seeking the best qualified resources to plan our system.

62a _____ The level of trust in the company is high.

62b _____ The level of trust in the company is low.

63a _____ We have a totally manual warehouse control system.

63b _____ Our warehouse control system is real-time and paperless.

64a _____ We have checkers to assure quality and accuracy.

64b _____ Checkers have been eliminated in our operations.

65a _____ Nothing ever changes and there is no plan to do so.

65b _____ Change is a part of our culture and is continuous.

66a _____ We believe that if it ain’t broke, don’t fix it.

66b _____ We believe there is always a better way.

67a _____ Warehouse managers fight fires.

67b _____ Warehouse managers really manage their warehouse.

68a _____ Warehouse management and employees are well-trained.

68b _____ Warehouse personnel are viewed as overhead.

69a _____ We make the best use of part-time and temporary work forces.

69b _____ We are not sure how to utilize part-time or temporary employees.

Tompkins Associates



70a _____ Absenteeism and turn-over are problems.

70b _____ Absenteeism and turn-over are not problems.

71a _____ We have a warehouse strategic master plan.

71b _____ We do not have a warehouse strategic master plan.

72a _____ Our systems support continuous flow warehouse operations.

72b _____ We are unable to make continuous flow warehousing a reality.

73a _____ Warerhouse has an adversarial relationship with customers.

73b _____ Warehouse and customer adversarial relationships have been eliminated.

74a _____ Our vision/mission statement is documented.

74b _____ There is no vision/mission document but everyone knows what our objectives are.

75a _____ We have poor communication channels with our customers.

75b _____ Communication networks support the integration of the customers to the warehouse.

76a _____ Automatic identification is used in data acquisition and transfer.

76b _____ Manual systems are in place for retrieving and transferring data.

77a _____ Shorter product lives have meant more product obsolescence.

77b _____ Shorter product lives have increased the pace and productivity requirements in the

warehouse.

78a _____ A key component of our company’s culture is the learning and development of staff.

78b _____ A key component of our company’s culture is adhering to policies and procedures.

79a _____ Exceptions and deviations occur frequently.

79b _____ Exceptions and deviations occur infrequently and are rectified quickly.

80a _____ We are attempting to implement work teams in our organization.

80b _____ Our company is very “political”.

Tompkins Associates


81a _____ We do not know who our customers are.

81b _____ We know our customers and encourage partnerships.

82a _____ The team concept is well accepted and successful in our company.

82b _____ The team concept does not work well within our company.

83a _____ We have many warehouse locations in our company.

83b _____ We have only a few warehouses.

84a _____ The warehouse is integrated into the whole material flow cycle.

84b _____ The warehouse is where material flow stops.

85a _____ We constantly renegotiate contracts with vendors to drive prices down.

85b _____ We treat our vendors like a member of our team; they are friends.

86a _____ Automation is difficult to justify.

86b _____ Excelling at other requirements of success has made automation easier to justify.

87a _____ Warehouse control system is interactive.

87b _____ Warehouse control system is canned and difficult to use.

88a _____ We do not understand our options in warehouse automation.

88b _____ We understand our options in warehouse automation.

89a _____ Timely actions are taken to overcome any deviations from plan.

89b _____ It is hard to determine in a timely fashion any deviations from plan.

90a _____ Systems support ongoing cycle counting.

90b _____ Systems still support physical inventories.

91a _____ We have recently reviewed our distribution network.

91b _____ Our distribution network has evolved over time.

92a _____ Our facility layout can easily allow expansion.

92b _____ Our facility layout is not easily expanded.


Tompkins Associates


93a _____ Spills are often found on floor.

93b _____ Floor is typically free from spills or trash.

94a _____ Unsatisfactory employees are usually sent to warehousing.

94b _____ Management understands the importance of warehousing to the company.

95a _____ We have standard warehouse training.

95b _____ We use competency based testing in the warehouse.

96a _____ We perceive public warehouses poorly.

96b _____ We believe public warehousing is increasing in sophistication and professionalism.

97a _____ Warehouse is not a team with any other function in the company.

97b _____ Warehouse has developed a team with public warehouse.

98a _____ We do not believe our inventory records are true.

98b _____ We are confident in our inventory records.


Tompkins Associates


A. Dynamic 2b___ 2a___

Consistency 19b___ 19a___

22b___ 22a___

30b___ 30a___

39b___ 39a___

65b___ 65a___

66b___ 66a___

TOTAL A

B. Culture 8b___ 8a___

33b___ 33a___

40a___ 40b___

78a___ 78b___

82a___ 82b___

TOTAL B

C. Organizational 24b___ 24a___

Model 31a___ 31b___

37a___ 37b___

53b___ 53a___

60b___ 60a___

74a___ 74b___

TOTAL C

D. Professionalism 17b___ 17a___

68a___ 68b___

94b___ 94a___

95b___ 95a___

TOTAL D

E. Customer 9a___ 9b___

Awareness 23b___ 23a___

73b___ 73a___

81b___ 81a___

TOTAL E

Appendix B: Team-Based Continuous ImprovementDiagnostic Scoring Sheet

Instructions: Transfer your responses from the survey to the blank spaces below. Be sure to

record “a” and “b” responses for each pair in the right space. Then add scores for each categroy.

F. Measurement 20b___ 20a___

34a___ 34b___

49b___ 49a___

89a___ 89b___

TOTAL F

G. Operations 25b___ 25a___

Planning 55b___ 55a___

67b___ 67a___

71a___ 71b___

TOTAL G

H. Centralization 16b___ 16a___

21b___ 21a___

83b___ 83a___

91a___ 91b___

TOTAL H

I. Public 14a___ 14b___

Warehouses 26a___ 26b___

96b___ 96a___

97b___ 97a___

TOTAL I

J. Pace 52a___ 52b___

58b___ 58a___

72a___ 72b___

77b___ 77a___

TOTAL J

CategoryWorld-ClassWarehousing

Score

TraditionalWarehousing

ScoreCategory

World-ClassWarehousing

Score


Score

Tompkins Associates


CategoryWorld-ClassWarehousing

Score


ScoreCategory

World-ClassWarehousing

Score


Score

K. Variety 36a___ 36b___

38b___ 38a___

56b___ 56a___

59b___ 59a___

TOTAL K

L. Flexibility 3a___ 3b___

10a___ 10b___

69a___ 69b___

92a___ 92b___

TOTAL L

M. Uncertainty 28a___ 28b___

46b___ 46a___

64b___ 64a___

79b___ 79a___

TOTAL M

N. Integration 1b___ 1a___

41b___ 41a___

75b___ 75a___

84a___ 84b___

TOTAL N

O. Inventory 29b___ 29a___

Accuracy 32a___ 32b___

90a___ 90b___

98b___ 98a___

TOTAL O

P. Space 4b___ 4a___

5a___ 5b___

13a___ 13b___

50b___ 50a___

TOTAL P

Q. Housekeeping 7b___ 7a___

43a___ 43b___

54b___ 54a___

93b___ 93a___

TOTAL Q

R. Order Picking 11a___ 11b__

12b___ 12a___

27a___ 27b___

42a___ 42b___

TOTAL R

S. Human 18b___ 18a___

Resources 57a___ 57b___

62a___ 62b___

70b___ 70a___

TOTAL S

T. Team 48b___ 48a___

Players 51a___ 51b___

80a___ 80b___

85b___ 85a___

TOTAL T

U. Automation 44b___ 44a___

47a___ 47b___

86b___ 86a___

88b___ 88a___

TOTAL U

V. Automatic 6a___ 6b___

Identification 15b___ 15a___

35b___ 35a___

76a___ 76b___

TOTAL V

W. Control 45b___ 45a___

Systems 61b___ 61a___

63b___ 63a___

87a___ 87b___

TOTAL W

Tompkins Associates


I. Team-Based Continuous Improve-

ment Acceptance: Record Total Scores for

A, B and C from scoring sheet and total these

scores.

n A World-Class Warehousing Score of

90 would indicate a company which

had totally adopted a culture of con-


n A Traditional Warehousing Score of

90 would indicate a company which

had totally rejected a culture of con-


n A World-Class Warehousing Score

above 70 indicates a progressive cul-

ture.

Appendix C: Team-Based Continuous ImprovementDiagnostic Survey Interpretation Sheet


between 50 and 70 indicates a culture

with some good tendencies but in

need of work.


between 30 and 50 indicates a nonpro-

gressive culture having a tremendous

opportunity for improvement.


below 30 indicates a traditional ware-

housing company in significant

trouble. Immediate change is neces-

sary.

WORLD-CLASSWAREHOUSING

SCORE

TRADITIONALWAREHOUSING

SCORE

TOTAL - A

TOTAL - B

TOTAL - C

Team-BasedContinuous

ImprovementAcceptance

Score

Tompkins Associates


II. Warehousing Priorities: For To-

tals D through W, list each category where the

World-Class Warehousing Total Score is less

than 10 points.

n The three categories in the above table

having the lowest total World-Class

Warehousing Scores should be the

focus of your first three improvement

teams.

n If you have more than three catego-

ries in the above table tied for the low-

est total World-Class Warehousing

Score, list the three categories you feel

should be the focus of your first three

improvement teams.

CATEGORYWORLD-CLASS WAREHOUSING

TOTAL SCORE(Less than 10)

TOMPKINS ASSOCIATES: Supply Chain Excellence

Tompkins Associates is the global leader in Total Supply Chain Solutions for oper-ations consulting, technology implementation, and integration. For nearly threedecades, Tompkins has provided expertise in warehousing, logistics, procurement,inventory, manufacturing, organizational excellence, quality, and maintenance.

Tompkins Associates is headquartered in Raleigh, N.C., and has offices throughoutthe United States and in the UK, continental Europe, Mexico, and Australia.Worldwide, Tompkins helps clients succeed through a combination of focused knowl-edge of best practices and tailored solutions. Tompkins prepares businesses to harnessthe energy of continuous change to achieve Supply Chain Excellence.

Tompkins Associates understands your unique needs. Tompkins’ supply chain expert-ise helps clients work seamlessly with their supply chain partners to provide the servicethey need to satisfy their customers. No other firm has the capability to melt the links inyour supply chain-taking you from business as usual to collaboration to velocity.

Tompkins provides solutions that are faster than fast. Our publishing arm, Tompkins Press, delivers the knowledge today’s business lead-

ers need. Tompkins consultants have written more than 500 industry articles and givenmore than 3,000 presentations worldwide. As a result, Tompkins Press has the insidetrack on the supply chain issues facing businesses today as well as the issues they’lldeal with tomorrow. We're an aggressive publisher of leading edge, pro-technical, user-friendly books and audio products.

Tompkins focuses on delivering results–integration of your supply chain, a moreprofitable costs-to-revenue ratio, enhanced customer satisfaction, greater operationsreliability, and the release of trapped capital. Our results speak for themselves, withover 70 percent of our business coming from past clients.

Begin your journey to Supply Chain Excellence. Tompkins Associates will make itall happen.

www.tompkinsinc.com

APPENDIXBackground Information



liggisu1

www.tompkinsinc.com

continuous improvement in warehousing

Documents

warehouse operationsm

warehouse operations1

companyn priorities

warehousing operations

warehouse operations

things rightis

right things

model of success