There are two ways to make money. Either you sell more material / services for a profit or you need to reduce your loss (operating costs) in your warehouse (support services).
The only ways to make your warehouse a profit contributor is to reduce costs by reducing people, reducing delivery costs or increasing output without increasing expenses. Alternatively you can seek ways for your warehouse to be a revenue generator as defined by creating revenue producing services or a compelling reason why customers want to do business with you due to your warehouse operations proficiency.
To achieve any of the above you need \”the right people.\”
Historically distributors have promoted top warehouse performers into supervisory and then management roles. Larger distributors either promote \”the best of their best\” or hire from outside. Rarely is formal development / training sought, or provided, unless a distributor has a RDC / CDC. They then need someone with a different, more robust, skill set to help take the company and warehouse management / supply chain logistics / customer logistics to the next level. And the \”next level\’s\” core objective needs to be adding to your profitability … making you money.
In this vein we reached out to our operations friend, Dick Friedman from General Business Consultants, for his thoughts on providing training to warehouse supervisors / managers to ensure they have the necessary, basic, skill sets.
At some electrical distributors, the warehouse manager really can’t manage, which causes several problems that impact customers and company profits. Problems include picking and shipping mistakes (such as sending less than ordered, and/or the wrong items), low productivity (sometimes due to time wasted when picking), excessive turnover and other operating costs, uncaring workers, accidents, and alienating co-workers. The failure to manage comes about when a great warehouse ²line” worker (e.g., picker) is promoted up the ranks to warehouse supervisor and then to manager of the warehouse — but without any training and education in management. He or she simply does know what is required to manage subordinates. Here are a few aspects of managing that up-the-ranks warehouse managers should be taught. (The people they report to may also need education in more effective management of the warehouse manager.)
Communications. Even before computers existed, effective managers needed to be able to communicate with the people they supervised, in ways that subordinates understood; communicate verbally and in writing. Today, non-verbal communication may require using email or texting, not just pen and paper.
Technology skills are mandatory these days, so warehouse managers must be able to use the distributorship’s ERP system and other warehouse technology, such as a warehouse management system (WMS), bar code scanners and controllers for automated storage and retrieval equipment to name a few tools. He/she must be able to use any mobile devices that are used in the warehouse (e.g., tablets) and be able to access the Internet (such as for purchasing MRO items he/she is required to manage).
Decision-making skills require the ability to use high-school level math, the ability to express alternative actions in dollars and cents, and the ability to define the likelihood and possible risks (financial and otherwise) of alternatives. It’s also necessary to take non-quantifiable factors (e.g., impact on worker morale) into account. And be able to make a decision in a timely manner.
Interpersonal skills refer to the ability to relate to other peoples’ concerns and desires, which often are not about money. These skills are needed for interacting with colleagues and the manager’s supervisors, not just subordinates.
Planning examples include: budgeting for expenses controllable by the manager; determining how many workers will be needed for each task (e.g., picking) on each shift — scheduling; determining how to make the warehouse environment a safe, comfortable, place to work; developing preventive maintenance plans for equipment; determining who would work overtime. Planning might also include determining how much equipment (e.g., bar code scanners) would be needed for the near future.
Organizing includes evaluating and hiring warehouse workers and their direct-supervisors (and firing when necessary); determining which workers will perform which tasks (e.g., receiving) on which shifts, and who will supervise them in each area (e.g., picking) on each shift. Organizing can also involve participating in decisions about which items will be stored where.
Coordinating examples include talking with IT personnel about the technology needed for bar code label printers; meeting with subordinate-supervisors to discuss who can work in which areas of the warehouse; talking with customer service personnel about customer feedback; meeting with company executives regarding warehouse-employee benefits.
Leading includes more than just directing subordinate supervisors and line-workers. It includes educating both new and veteran subordinate supervisors and workers; training employees in using technology; mentoring subordinates (which is more than just teaching); developing and documenting procedures and controls; staying informed about workers personal situations (e.g., sick family members).
Controlling examples include monitoring picking and shipping/delivery accuracy/timeliness, and worker productivity; and communicating sub-par performance to supervisors and workers. Controlling also includes reviewing the performance of subordinate supervisors and workers, and ensuring that workers are using technology effectively and efficiently.
With unemployment at the lowest level in decades, it’s understandable that distributors promote line-level warehouse personnel to managerial positions when more qualified people can’t be found or would cost too much. But that’s no excuse for not training the new manager in principles and practices of managing a warehouse.
Dick Friedman helps electrical distributors train warehouse supervisors and managers in ways that prevent customer- and profit-impacting problems. To train people in the specifics of a distributor’s business policies and warehouse operations, he uses extensive experience with: industry-specific requirements, ERP and WMS systems, warehouse automation, improving warehouse operations. He can be reached at 847 256-1410 or visit www.GenBusCon.com .
What made me think about warehouse manager training?
Last week I was at a client who was preparing to make a personnel change with a warehouse manager for one of their RDCs. The person\’s core challenge … he was a branch warehouse manager who wasn\’t performing as an RDC manager. Perhaps it was lack of training, mentoring or grooming? Perhaps he did not have the capability for a higher role and the new role was incompatible with his current skill set? I understand he was provided time, resources and performance objectives but I know that sometimes you can\’t put a square into a circle.
It reminds me of the adage of \”if we train them they may not stay, if we don\’t, then they will.\” Betting on training is needed to grow your company.
Are you training your team to enable them to help you take your business to the next level? Does your warehouse manager know how to help you make money?
1 thought on “Does your warehouse make you money?”
This article is an excellent analysis of what’s needed in managing a crucial resource for distributors. It speaks to the fundamentals of good management at all levels of the warehouse function. Kudos to David for a simple and direct explanation of warehouse management. ”
I enjoyed reading your article.