Predictability is the cornerstone of a successful delivery system. But smaller orders, more frequent deliveries, volatile demand, and expanding networks all increase the complexity of warehouse management and make it difficult for many operators to achieve predictable service levels. This can put valuable customer relationships at risk and lead to higher costs and lower productivity.
“At DHL Supply Chain, we have a reputation for managing large and complex warehouses with high predictability and operational excellence. This did not happen by chance. It is the result of years of development, improvement, and implementation of our warehouse operations management system, OMS First Choice,” begins Oscar de Bok, CEO, DHL Supply Chain. Just as a computer's operating system translates user commands into tasks the computer can perform, a warehouse OMS is vital to the ability of every warehouse worker and manager to translate goals supply chain into efficient and consistent processes that enable predictable and continuous improvement.
The primary goal is to ensure that all associates are on the same page in terms of expectations and performance. It starts with a clear definition of goals, which are then translated into specific, measurable Key Performance Indicators (KPIs) that are communicated continuously throughout the organization. KPIs allow each team to set specific goals, ensure roles and responsibilities are clearly understood, and establish daily routines. “Having a well-defined library of standardized process models is essential to ensure consistency in how tasks are performed and KPIs are achieved. These templates should be tailored to the specific requirements of each warehouse and provide clear direction on how each team member should perform their duties,” opines Bok.
Performance Management is at the heart of OMS, serving to connect and synchronize all other aspects. Performance management starts with measuring performance. This is done through a range of systems, tools, and methods for tracking actual performance based on KPIs and other goals at the individual, team, and site levels. At DHL, performance monitoring data is communicated to frontline leaders through easy-to-use visibility and reporting tools. The goal is to give these team leaders the data they need to manage personal performance and identify gaps and opportunities without overwhelming them with unnecessary data unrelated to their role. The value of performance monitoring also extends to resource allocation and usage. Activity data can be used to generate forecasts that predict future operational needs. The plans can then be modified to ensure that resources are always available to meet service levels.
Bok illustrates, “for example, with accurate forecasting and resource management at sites that support direct-to-consumer order fulfillment during the 2020 holiday season, DHL can ship 100% of orders via the network during network week with an average order cycle of fewer than four hours. This was achieved despite a 225% increase in orders for the week.”
“In order to achieve predictability, you cannot have warehouse workers perform the same task in different ways.” Therefore, standardizing work is an essential component of an effective DMS. Guided by experience and practices, best practices for each position should be defined and documented for each level of the organization. The hiring standards should then be reinforced by training that provides workers with practical experience in performing their jobs in line with OMS.
“At DHL Supply Chain, we've found that the most effective strategy for maintaining work standards is to shift the management role from “boss” to the coach role. OMS First Choice includes monthly training to equip leaders with the skills to better coach their team members and coach them with constructive performance feedback,” details Bok on the learning aspects. Through this approach, regular performance appraisals become more open and collaborative with leaders seeking to better understand how they can help team members achieve results in the future. as team members feel more confident identifying barriers to productivity and areas for improvement.
Using OMS to optimize warehouse performance and deliver predictable service requires more than just developing an operating manual or conducting training frequently. This requires a disciplined and systematic approach to operations using best practices, monitoring and management tools, and ongoing communication and coaching. “Not every organization has the resources and experience to successfully deploy and manage an OMS in stock. However, working with a third-party logistics partner with a well-developed and consistently executed OMS, such as DHL Supply Chain, can allow them to get the most out of this approach and achieve predictability and continuous improvement,” concludes Bok.