The Smart Warehouse – Intelligent Teamwork

Talent wins games, but teamwork and intelligence wins championships.

— Michael Jordan

The founding of Portable Intelligence is based on the premise that warehouses can be much more efficient. The ‘problem’ with most warehouses today and I’m referring to the ones dependent upon human labour which is the vast majority, are run with rules of thumb and lots of tribal knowledge. Use of standards or KPI are scant because most systems today for example, don’t measure how much time a pick or put-away activity takes.

Irrespective of whether the warehouse is using an ERP, WMS, RFID or pen/paper, how the workers use those tools is up to them. The direction they travel through the facility is also up to them. In the end there is a great variability in output between workers. No surprise it comes down to tenure and tribal knowledge – whoever has the most of these are generally your best workers.

You might argue this is typical of any role and I would agree. However, there is no growth in productivity once you get everyone to the same level of tribal knowledge and tenure. Adding automation, embracing Lean, better slotting and going more vertical in your facility to increase capacity will all help.

But as my old boss used to say – “you’re paving over cow paths.”

These proven warehouse improvement measures are important but we’re only dealing with half the equation when it comes to warehouse productivity. Which is:

                    Inventory Accuracy + Labor Optimisation = Warehouse Productivity

Most warehouse improvement programs don’t address the human part and only the inventory accuracy side of the equation. For this reason, its very likely your warehouses is operating at 60% of its potential.[1] I’m a skeptic and believe the number is much higher.

 The Case for the Smart Warehouse.

Tasks in warehouses are siloed affairs meaning everyone does his/her own set of standalone transactions. In the 90’s companies tried task interleaving, where an additional task is given to the worker based on their location. A typical task interleave function would be picking and put-away. If a worker is dropping off picked pallets in staging they would then be directed to the adjacent receiving dock and perform a put-away of incoming product thus preventing a return to the warehouse with no payload on their forklift.  This sounded great in principle but ran into all sorts of practical issues such warehouse layout, actual location of the worker vs where the system thought worker was, and lack of system flexibility. As a result, task interleaving has been used with limited rollout and success.

Thus, material handling work is performed in much the same manner as it has been for centuries. While there is now equipment doing the heavy lifting, its still left to the person to decide how to best perform that task.

Work is siloed, meaning everyone has his own set of orders to complete and there is rarely any sort of teamwork on the same order.  This often makes for inconsistent output as even you best worker can have an off day. There is lots of daily drama as floor supervisors scramble to find additional help to finish loading trucks or getting material to the production line.

The case for Smart addresses the fundamental process of how work is allocated amongst people. Typically, its divided up by order with the supervisor prioritizing by delivery schedule and work being allocated based on number of lines or cases.  Then it’s hope and pray everything goes off without a hitch.

How Smart addresses this work allocation issue is to first understand what are your true standards or KPI around any of the tasks to be done. It “learns” what those standards are by analysing past transactions. From there it will discern pick times based on product, person, and the to/from location.

Once these standards are established Smart then creates a ‘mission’ around the sets of tasks to be performed and allocates it evenly to each available resource based on this information. Once the mission is deployed, Smart will then monitor the progress of each activity. Should anyone fall behind and as a result miss an important ship window, Smart will swing into action allocating any remaining lines to the next available resource.

In this manner Smart is constantly focussing activity on what work must be done. Re-allocating work as necessary and ensuring the deployed mission gets done.  A key component of Smart is the use of every available resource by creating virtual teams. Some people will be working on the same order and others working solo on their own order. By harnessing the power of teams, you ensure greater output and greater consistency.

It is also strongly recommended that you review your compensation practises or at the very least create an incentive program based on group targets. Such as if weekly pick goals are met both in accuracy and fill rate, the reward is a pizza lunch.

Taking a team approach has also proven to provide health benefits in the workplace, there is a plethora of articles showing improved morale, decreased absenteeism, and improved worker safety. Just Google benefits of workplace teamwork and you’ll see what I mean.

The Smart Warehouse is good for employees, management, and business - and the only way we’ll break through our version of the glass ceiling.


By Jeff Lem (crossposted from Linkedn Article)

Excerpt from his forthcoming book: Materials Management for Manufacturers

[1] Warehousing Forum, Vol 15, Number 11