May 2003 | Commentary | Checking In

The Productivity Evolution

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What's in a warehouse? If you answered "inventory" you may be overlooking one important fact. Today's warehouse operations are sometimes a nexus of functions and business strategy, creating an ideal setting for new ideas to take root, grow your business, improve your business model. With the stress caused by the slow economy, warehouse pros are seeking any way to maximize return on that infrastructure.

Some companies aggressively seek to leverage their warehouse assets, technology, and workforce by searching for others to share the space. It's a tough market out there, and many other warehouses, both public and private, are in the same predicament.

Squeezing every ounce of productivity out of the warehouse staff is another way to protect eroding margins. One food logistics facility in Brooklyn, N.Y., which specializes in home delivery, made every one of the pick-pack and preparation staff stakeholders. Their salary is augmented by a share of year-end profits. The extra rewards are substantial. Productivity is off the chart.

A retail facility in New Jersey, serving the N.Y. garment industry, approaches productivity another way. Warehouse staff are assigned to teams that compete against other teams for recognition. Accuracy, speed, and team spirit are measured and productivity is rewarded with substantial cash bonuses. The shared sense of purpose is also encouraged through non-work activities, including sports and social events. The team spirit has cut shift shortages significantly as team members cover for each other wherever possible. Turnover is significantly below the industry average.

Both facilities recognize the benefits of gainsharing and intrapreneurship to keep people as happy and motivated as they can be while they work on the fulfillment front lines. It costs money, but increased productivity and low staff turnover offset the investment.
How are you squeezing productivity out of your warehouse operation? We'd like to publish your ideas in an upcoming issue. Send me an email: In the meantime, you'll find out how some of your peers solve their warehousing and materials handling challenges in the following pages.

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