If you are planning a redesign of your warehouse or distribution center (DC), chances are good that you’ve spent a lot of time thinking about the systems you need to put in place to create the most efficient workflow. This makes sense — properly using your space and implementing the right technologies is essential if you want your new facility to operate at its highest capacity.
Once you’ve laid the groundwork — assembled the right team, gathered the right data (SKU data, item master data, order history), and mapped out how the layout needs to hit your business goals — it can be tricky to know where to go from there.
Before Implementing an Automated Operational Design
Before embarking on implementing an automated operational design in your facility, consider the following:
- Even the most automated warehouse system will not run itself. Automated systems require optimization and some level of management.
- Managing the operational change is critical. There is often a significant dip in productivity after the implementation of an automated system that can last up to several months in some instances, depending on the maturity of the workforce and their experience in prior startups. This is due to the disruption that implementing any new system causes. An effective leader will manage this process to lessen the productivity dip as much as possible.
The takeaway is clear: operational excellence is a collaborative process. We’ve found that the most successful startups have the following three qualities in common.
1. Prioritize Operational Leadership and Communication
Operational success is about more than just the systems; you’ve also got to consider the human element. When you’re tackling a project as extensive as changing your operation’s design and processes, this is something you can’t afford to forget.
From the beginning of any project, it’s important to have a clear communication chart of the people involved so that, if issues arise, you can easily and effectively come to a resolution. This should include details about what each person is responsible for, and their contact information.
Why is this so important? When one person insists on being the conduit through which all information must flow, critical information can be lost or held back, which has the potential to delay an entire project. Having leaders from each project team, with clear subject matter ownership beneath them, ensures quality information is exchanged throughout the project cycle. Effective communication leads to effective operational design.
Beyond communication, you must also ensure stability while you expand your team beyond the core group. Ask yourself:
- What is the organizational structure at the operational level?
- Are there sufficient layers of management, team leaders, and supervisors in place so there is a stable environment as the system is fine-tuned and hardened through testing and staff sign-off?
As the organization grows around this core team, it is important to ensure accountability and a stable base group as other employees come and go during the earlier phases of a project.
2. Track Operational Performance and Key Metrics
When tackling a new project, especially one as complex as changing your operational design, it is important to constantly go back to the important numbers: goals, measurements, and rewards.
Goals need to be clearly set and communicated to the team ahead of time so there is alignment between what is expected and the actual performance levels in the DC. These levels should be measured and posted in consistent terms (increases in orders, cartons, or lines, etc., compared to the old numbers) so there is uniformity in the terminology, allowing the team to see progress.
Some clients have had tremendous success by incentivizing their teams, which has increased performance well above expected levels. Offering rewards encourages employees to be more productive, which increases operational performance and ultimately reduces costs while improving service levels to clients.
For example, you can use software systems to track pick rates by operator. This information, when compared to historical reporting, can be used to determine pick rate changes over time — providing a baseline for your reward incentives.
3. Prioritize Training for Operational Success
Implementing a new operational system is only the first half of the battle. Once you’ve made the change, you’ve also got to devote adequate time and resources to training your staff on the new technologies and processes.
If you don’t devote enough time to training your employees, you are setting yourself up for a lackluster return on the investment you’ve just made. A large percentage of the productivity loss that occurs after implementing an automated system is caused by staff not understanding how the system works or how they fit into the new processes. It’s natural, and it’s to be expected, but you can lessen the decline in productivity by properly training your employees before the system goes live.
Properly setting expectations around reasonable performance levels that will increase over time results in a positive experience as successes are achieved and built upon consistently as time passes and productivity continues to climb.
The Bottom Line
Making changes to the operational design of your warehouse is a huge undertaking. Just remember: coming up with the most efficient design is only half the battle. The other half involves leadership — organizing the team, tracking the numbers, and devoting adequate resources to training. Only by understanding the human element and how it plays into your operation will you truly be successful in your facility redesign.
Frequently Asked Questions
What are the 3 components of effective warehouse operational design?
The three components are prioritizing operational leadership and communication, tracking operational performance and key metrics, and prioritizing training for operational success. Together, these ensure that a new warehouse design or automated system is properly managed by people, not just installed as technology.
Why is operational leadership and communication important in a warehouse redesign?
A warehouse redesign involves many people and moving parts, so a clear communication chart with defined responsibilities prevents critical information from being lost or delayed. Having leaders from each project team with clear subject matter ownership ensures quality information flows throughout the project and supports a stable organizational structure as the team grows.
What operational metrics should be tracked during a warehouse redesign?
Teams should track goals, measurements, and rewards using consistent terms, such as increases in orders, cartons, or lines compared to prior performance. Tracking metrics like pick rates by operator against historical reporting provides a baseline for incentive programs and helps confirm the redesign is delivering results.
Why does productivity dip after implementing a new automated warehouse system?
Productivity often dips for weeks or months after an automated system goes live because of the disruption any new system causes and because staff don’t yet fully understand how the system works or how they fit into the new processes. Effective leadership and proper training before go-live help minimize the length and severity of this dip.
Why does training matter after implementing automated warehouse systems?
Implementing new technology is only half the work; without adequate training, businesses get a lackluster return on their automation investment. Devoting enough time to training staff before the system goes live reduces the post-implementation productivity decline and sets realistic performance expectations that improve steadily over time.
