Operational Assessment: 17 Last Minute Changes before Christmas

For operations professionals in multichannel companies, we all know the drill, the risks and rewards of Christmas. While the time for changing the warehouse layout or adding storage capacity or automation may be past, here are 17 important last minute ideas an operational assessment will identify that everyone can implement to improve productivity and reduce costs.

As warehouse consultants conducting hundreds of warehouse assessments for clients, we have found that the highest benefit areas you can affect during the Holiday season are managing labor better (it’s more than 50% of your cost per order) - in particular the pick and pack departments which are more than 50% of your labor costs. Also, working with shipping carriers - probably your highest overall cost – on your Christmas plans pays off too.

Here are our top 17 picks to improve your operation this Christmas:

1. Establish Hot Pick Zones. Locate the best selling items in the most accessible storage areas such as ends of aisles without creating congestion. This may only be 15% to 20% of your items. As much as 70% of a picker’s time is in walking; reduce walk distance and time and you increase productivity and reduce costs.

2. Slotting. What data can the merchants give you that gives additional sales velocity information that will help you with slotting product? Once again, reduce walk time of the pickers will improve productivity. Planned sales by item or purchase order quantities expected to have high sell through during the period can greatly help the slotting. 

3. Improve packing productivity. Cushioned floor mats and tables with adjustable height to make them more ergonomic and can reduce fatigue. Additionally, large enough work surfaces and cubbyholes for inserts are all beneficial. Make sure the cartons and packing materials are replenished to the pack stations so packers don’t have to leave the station and can maximize their productivity. 

4. Planning with your shipping carriers. Be sure you have shared your projections with your shipping carriers. Can you get any extended pickup times for shipments and trailers to load during the day?

5. Seasonal managers. Which full time and part time associates can step up to be seasonal supervisors? Give them an incentive to do so for the peak season. At the end of peak season they give up the responsibility.

6. Best labor source. The most productive people are those that have worked for you in Christmases past. Stay in touch with them, nurture this resource and offer them an incentive to work this peak season. 

7. “Recruit a friend”. Productive employees often know good people looking for extra money. Offer them a small bonus if you recruit a friend or relative.                                                                                              

   

8. Offer a bonus to work the entire season. Along with returning seasonal workers and recruiting a friend, offer an additional bonus to those that work the entire season. Quitting early can really hurt you.

9. Temp agencies. Some clients of ours have had great results. It also gives you a preview of workers you might consider as full time associates. 

10. Buddy system. Assign each seasonal associate a “buddy” that is a full time, year around employee. Task the year round employee to be available to answer all the seasonal associate's questions and help them be productive. 

11. Disaster preparedness. Be sure the “telephone tree” is up-to-date in case bad winter weather throws you a curve. Are the seasonal workers on the lists? Do they understand the emergency plans?

12. Head off backorders. Backorders - The #1 source for creating customer service problems. Get the merchants to follow up on open purchase orders two weeks in advance of expected receipt dates. 

13. Second and third shifts. Put in place second and third shifts to keep up with the volume. Schedule replenishment tasks for off-hours so that the bulk of the staff is not impeded by pallets, boxes, and MHE in the aisles. This will improve facility safety too. 

14. Work simplification. One of the hardest parts about using seasonal labor is they don’t know your system and processes. To improve seasonal associates’ productivity, break down complex tasks into simpler steps. Full time employees can still handle more complex tasks. 

15. Improve communication and productivity will improve. Be sure to have daily floor manager and shift change meetings. The Christmas peak heightens the need for resolving issues immediately.

16. Contingency plan. Have you worked out with your supervisors and senior management what your options are if the business is +/- 10-20% from your plan? Overtime, more workers, etc.? Where would you use more people effectively? 

17. Reduce systems problems. Stick to a policy of not implementing new systems and non-critical modifications September through December.

It’s still not too late to make some changes that will ensure a smooth and productive Holiday season. This Christmas, keep a journal of problems and ideas for solutions encountered as a starting point for conducting a post-season operational assessment in January or February of next year.