The Continuous Improvement Cycle For Improving Warehouse & Logistics Performance

Posted by Jason Tindley on 25-May-2017 11:50:00

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Faced with the prospect of continual change, due to external factors or strategic decisions within your business, there are a couple of approaches you can adopt:

1) You can take the view that your business is essentially static and that change is the exception to the norm. Change is therefore to be mitigated against and managed in order to avoid disruption to the business when it occurs. The goal is to introduce whatever adaptations are needed to accommodate the changes and return to the status quo.

2) You can adopt a more fluid model of business, where change is, in effect, the only constant you can rely on. In this view, changes become opportunities for improvement. In place of change management, businesses adopting this approach can put in place a continuous cycle of improvements that use change to grow new opportunities.

Many businesses tend towards the first model, seeing it as the most robust and free of risk. However, in our experience as logistics consultants, the second approach brings far more long-term stability for businesses in a changing marketplace. 

The following is a brief outline of the continuous improvement cycle, which a growing number of warehouse businesses are adopting to streamline their productivity and encourage growth. At the core of the cycle are daily, weekly, monthly and quarterly management meetings, where managers review performance based on KPIs and report findings to key stakeholders. Findings allow changes to be anticipated and dynamic adjustments made to KPIs and performance targets.

Daily Tasks

Daily progress is assessed at a morning meeting involving the whole site management team. This can involve:

  • Setting daily business KPIs (e.g. by individual, or activity, or by section)
  • Planning for any bottlenecks and known challenges (e.g. staff absences, large deliveries, equipment failure)
  • Implementing decisions from previous meetings
  • Compiling progress reports for general management.

Weekly Tasks

While you’re daily morning meetings will usually be reactive to events of the current and previous day, weekly meetings with the site management team allow a more comprehensive planning and review session. Actions include:

  • Reviewing the previous week’s KPIs
  • Taking learning points from the week’s events
  • Planning activity for the coming week
  • Analysing warehouse management and trend data
  • Making weekly reports available to general management (and key customers if applicable).

Monthly Tasks

Your monthly and quarterly reviews take a more strategic view of continual improvement, measured against contract SLAs, value opportunities and health and safety adherence. Your monthly tasks should involve a full site review by the site managers, in conjunction with your Operations Director.

  • Review performance and trends over the previous month
  • Assess health and safety performance
  • Explore opportunities for improvement over the coming month
  • Adjust KPIs for the coming month

Quarterly Tasks

Quarterly reviews involve two management tasks: a report made by your Ops Director and General Manager to your Board of Directors, and two-way dialogue between your Directors and key customers.

Improvement targets should focus on:

  • How business contracts can be developed to deliver greater value and better performance against contract SLAs
  • Continuous improvement strategies for the following quarter
  • New opportunities for change and value creation, such as new equipment / technologies available / procedures
  • Performance against previous quarter’s KPIs
  • Relative success of previous quarter’s improvement measures

Goal Setting

Any proposed improvements must be measured against the need for business continuity. This recognises that some changes, such as introducing a new Warehouse Management System, or reordering of your workforce, will cause short-term disruption, whereas other changes can be introduced gradually with less of an impact on the day-to-day running of your business. 

Paying attention to your KPIs allows you to see the impact that each change will make in the short, medium and long term. This empowers you to make informed decisions and to make compromises where necessary. For example, although full implementation of a proposed change may bring a certain number of benefits, this may be outweighed in the short term by the disruption it has on your customers. Your regular reviews and reports may, therefore, suggest delayed or incremental implementation, or an alternative course of action.

Download Our New E-Book

Continual warehouse and logistics improvement is the subject of our new, free e-book: Continuous Improvement: how to fine tune, improve and evolve your warehouse and logistics performance. The guide includes an in-depth study of the account management and continuous improvement cycle, with practical advice about change triggers and the actions you can take. Click here to access your copy.

Continuous Improvement Guide

Topics: Warehouse Management

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