John Peters answered a job advertisement for a Distribution Center Manager position in Charlotte, North Carolina. The position description noted that the distribution center was a 350,000 square foot center located approximately one half mile off I-40. The center has 100 full-time employees working a 5 day/24 hour rotating shift distributing houseware (utensils, dishes, cookware, etc.) items for various retail companies. The warehouse has over 400,000 SKU’s with an average inventory value of $58M.  The center is responsible to support the requirements of 85 regional home goods retail outlets throughout the southeast. The advertisement specifically states that this position will be responsible for warehouse managing productivity, meeting financial goals, and safety/health compliance. This person would also be responsible for making process improvements to improve cusJohner satisfaction.
John applied and was granted an interview and tour of the facility. After the interview, John walked the Distribution Center floor with the Regional Operations Manager, Bill Wyatt. The facility consisted of block staking for newly received product as well as four section high, single-deep pallet stacking frame racks for product storage. Regardless of household products received, all were on pallets and stored on the racks. Case split was only allowed when individual orders arrived.  Isle space was about 8’, which required the use of sideloading and straddle trucks. To, noticed that many of the items on the shelf has a dust film that covered the packaging. John also noticed that there was no designated secure area for expensive household goods.  They were just placed stacked on open shelves.
John also noticed that the sideloading and straddle trucks were constantly travelling to a couple of locations in the back of the Distribution Center. John asked Bill if there had been a warehouse activity profile had been conducted to eliminate time wasting repetitive activities. Bill said that he didn’t know if that was done or not. Although there seemed to be a lot of wasted time travelling to the back of the Distribution Center for high volume products. John also noticed that the receiving team would put away pallets based on available space, not in designated product locations.
John noticed that there was quite a bit of damage to the pallets and stacking frames as well as an area designated for “Damaged Product”. Internally damaged product was comingled with returned product from cusJohners. All damaged/returned product was inspected and dispositioned to either “Return to Stock” or “Damaged Goods”.  In the same area, newly received pallets were opened as pickers would pick product from these newly received pallets rather than pick from the open boxes on the shelves. This area was not designated in any way to differentiate between newly received material, damaged, or returned. John and Bill both had to step over debris and product that had accumulated on the floor.
John asked if any metrics were, being tracked and communicated to employees. Bill explained that the warehouse personnel do not care about metrics and would not bother to look at them if they were posted. Besides, they wouldn’t understand what they were looking at. Bill kept metrics based on OTD, productivity, and operating costs which he communicated to both the Distribution Center Manager and supervisor. He felt that was sufficient to run the warehouse.
Finally, John stood by as trucks pulled into the loading bays. He noticed that the trailers were not being chocked nor were the dock locks to secure the trailers being used. Drivers would report into the shipping office and then have to wait until a sideloader or pallet truck was available for loading. The drivers would often wait about 30 minutes before being loaded. Drivers would have a tendency to walk around the Distribution Center unescorted as they waited to be loaded. Several times, the drivers had to wait over an hour as the order was still being pulled.
As orders were received by cusJohner service, they were entered into the Warehouse Management System (WMS), a paper copy of the order was walked out to the warehouse for picking. The Distribution Center Supervisor would then select a picker to pull and pack the order for shipment. Many times one picker might be given as many as five orders to pick. If the picker has a problem finding an item, he walks back to the DC Supervisor’s office to get an answer. Pickers are responsible for printing out the packing slip and including it in the package. They would then sign the order copy and return it to cusJohner service. CusJohner Service would decrement (reduce) the inventory appropriately.
REQUIREMENTS:
After the tour, John was asked what improvements he would implement if he was chosen as the Distribution Center Manager. If you were John, what would be your suggestions for improving the warehouse process if he were given an unlimited budget?
In your analysis, note the issue or process that you perceive to be inconsistent (not ideal) when managing a Distribution Center and outline your suggestion on how you would resolve the issue.
For example, drivers walking around the Distribution Center while waiting to get loaded. Is this acceptable? Does this pose a safety and/or security issue? If so, what procedure would you put in place to stop this practice? Maybe confine their activities to the canteen or shipping office .
This exercise is to determine how many practices and processes you can find issue with if you were John Peters. interactions. I do not want you to use any outside resources. I want you, as John Peters, to tell me what and how these issues need to be addressed to manage this Distribution Center efficiently, effectively, safely, and with a level of security expected in a distribution center.