F. Curtis Barry & Company » Benchmarking ShareGroups

Improve Warehouse Productivity by Measuring and Posting Numbers

Bob Betke — Tue, 24 Nov 2009 20:37:25 +0000

A common theme we run into daily as we work with warehouse operations around the country is how to reduce labor costs. Labor usually makes up 50% or more of the total cost of operating a warehouse when you consider direct and indirect labor, occupancy costs, and packaging materials. Given this high cost, it is no wonder that it is one of the first issues raised during an operations assessment.

The old adage of working smarter not harder still applies today, but the actualization of that adage is becoming more difficult. In many companies, the responsibility of coming up with “smarter” ideas falls to management. You can imagine how that works.

Some organizations formalize a process that involves the people actually doing the work in coming up with better ways to run the warehouse. This is a better idea but still requires management time to facilitate and guide the process to develop meaningful ideas. What about an alternative?

It is common knowledge that most people want to know what is expected of them and how well they are doing. Surprising though, very few warehouses take advantage of this human trait. How many of you record and post performance results for the operation visibly so that everyone in the warehouse knows what productivity level has been reached?

The process does not have to be a complicated one that requires a lot of resources to manage it. Sometimes, simpler is better. If you are able to measure the overall warehouse in terms that you use such as total man hours and orders processed, you can use this process. If you measure to a more detailed level, you have to decide what will work best for you as motivation – is it the warehouse, function, or individual level of posting that will get the best results?

Most warehouses that start to post results and corresponding goals or standards see increases in overall productivity. These increases come as a result of individuals knowing how they are doing as individuals or as a unit and wanting to get better. It is not uncommon to see increases in overall productivity of 10 -15% using this concept.

How many of you would like to gain a 10% improvement in productivity without a lot of management intervention? If you aren’t measuring and posting results, it might be time to think about it.

Bob Betke is a vice president at F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com

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Registration Has Begun for Online Inventory ShareGroup

Jeff Barry — Thu, 10 Sep 2009 20:25:02 +0000

With the economy where it is most travel budgets have been cut to a bare bones minimum at most catalog and eCommerce companies. That means that most industry conferences have had a substantial reduction in the number of registrants – even when they give away free VIP passes to attend. We know all too well how tough it is to sell a conference; as most of you know we offer a series of warehouse, call center and inventory ShareGroups for catalog and eCommerce companies. With such a tough sell we decided to offer a ShareGroup that everyone can join no matter the size of their budget.

We have started our first online ShareGroup – the Inventory Management ShareGroup. Businesses that have a limited travel budget or can’t take the time to be out of the office can join and receive annual benchmarking data and have the tools to discuss strategies and issues that they are encountering in their business.

The Inventory Management ShareGroup registration and data collection has started and goes through October 9th, 2009. We will then have an indepth conference call discussion regarding the data once all of the output reports are distributed back to the members. After the data discussions we kick-off our series of monthly 1 hour conference calls to discuss hot topics identified by members prior to the call. Lastly, in between the calls we have an online discussion forum that is always available to all members to post and respond to questions regarding strategies and hot topics.

Please take a second to visit our website and read the ShareGroup overview and schedule as well as review the type of data we are collecting and analyzing. We hope to see you register for this great ShareGroup.

Contact Jeff Barry with any questions about the ShareGroup or our consulting services.

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From the Dark Side of Productivity

Bob Betke — Mon, 02 Mar 2009 10:05:39 +0000

I’m with a firm that spends much of its time helping clients improve productivity and reduce costs. We are ever mindful of the negative side—the “dark side”—of productivity projects. What is the dark side? It’s what happens if we don’t take the human factor into account. As someone with 30 years of experience in industrial engineering, I can tell you that there is no way to achieve long-term success in a re-engineering project without considering the effect it will have on people.

Two articles in the Wall Street Journal serve as stark reminders of this reality. The first, “Retailers Reprogram Workers in Efficiency Push” (September 10, 2008) described installations of workforce management software at AnnTaylor Stores Corp. and other retailers. According to the article, workforce management systems are “sweeping the industry as retailers fight to improve productivity and cut payroll costs.” As the Journal noted, some workers aren’t happy about the trend, saying the systems leave them with shorter shifts, make it difficult to schedule their lives, and “unleash Darwinian forces on the sales floor that damage morale.”

The Ann Taylor system keeps track of the usual productivity metrics: average sales per hour, units sold, and dollars per transaction. The system schedules the most productive people during the busiest hours—and, because it awards more-productive salespeople with favorable hours, it gives employees an incentive to persuade shoppers to buy things. And it’s worked, as far as the overall economic goals are concerned; the chain’s director of store operations said it has helped turn more store browsers into buyers. But, as the WSJ story made clear, it also resulted in the loss of some veteran salespeople who had developed long-term relationships with customers. By focusing strictly on the metrics that could be easily measured, the system actually penalized associates whose selling style depended on longer interactions with the customer—even though such relationships often assured continued customer loyalty. Others found their hours cut back to the point where they could no longer afford to make the trip to work. During busy times, the formerly congenial staff began competing for customers, sometimes stealing them away from one another. While productivity was, indeed, increased, perhaps the most surprising unintended result of the system was that this story, with all its unflattering aspects, was splashed across Page A1 of The Wall Street Journal.

To Read Full Article

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How You Treat Customer Returns May Determine Whether Your Customer Returns

Curt Barry — Tue, 26 Aug 2008 14:44:45 +0000

With a soft economy, many retailers are trying to significantly reduce returns in order to boost profits. Some companies are putting more restrictions and conditions on returns. Frankly, I think this will cause further erosion of sales. Who wants to buy a product that canâ€™t be returned, or that carries so many conditions for return?However, others are doing what I call â€œsave the saleâ€â€”that is, work with customers to help them understand the product and how to install or use it. Electronics, software and technical products are far and away the biggest problem areas that could benefit from this approach. As a case in point, in the last two weeks our firm had lengthy, painful experiences with two of the major U.S. software companies. One of our people spent five hours on the phone with an Indian call center while trying to install a new version on a laptop. If we had any choice we would have asked for our money back.

Bill Crutchfield, founder and president of the car and truck stereo direct marketer Crutchfield, learned early on in his business about customer returns. He told me at one of our Benchmarking ShareGroups a while back that he almost quit the business over 20 years ago because returns were so high. Luckily, before he did so, he decided to call many of the customers who were returning products to find out why. What he learned was that the customers were frustrated by not being able to install the product in their vehicle; there were no instructions provided by the vendors! He realized that he would have to invest in documenting how to install those products in each and every vehicle.

Now, Crutchfield has a database of thousands of models that their technicians can use to talk customers through the installation. Crutchfield also developed product mountings to hold the products to the car dashboard and interior, and they produce customer vehicle-specific instructions with pictures. In the end, Bill Crutchfieldâ€™s lesson resulted in one of Americaâ€™s largest, most innovative and customer responsive multichannel marketers.

I have no doubt that how you treat customers with regard to return privileges will greatly affect your future sales. Iâ€™d follow the leadership example of companies like Landsâ€™ End and L.L.Bean, with a â€œno quibbleâ€ guarantee. In the case of L.L.Bean, a true story goes that all of their original Maine hunting boots had product problems and most were returned. Leon Leonwood Bean stayed true to his word and refunded the purchase price. But he also stuck with it, correcting the problems and posting a sign in the store: â€œI do not consider a sale complete until goods are worn out and the customer still satisfied. â€“L.L. Bean 1916.â€ If you go to Beanâ€™s Web site, www.llbean.com and look under Company Information, youâ€™ll see many other sterling things they have to say about customer satisfaction.

Drawing upon the Crutchfield and L.L.Bean examples and our own experiences, here are some action points to consider regarding returns:

Dig into the reasons for returns through return correspondence, Web and chat messages, and most importantly, call center dialogue.
Merchants should buy net of planned returns rather than gross demand to lesson effects on inventory levels.
Returns cost more than orders to process. Streamline the processes and the systems to accommodate returns.
Credit customer accounts quickly. Customers are at their credit limits. Lagging credits and refunds add to customer dissatisfaction.

Remember: How direct marketers treat their customers helps them differentiate the customer shopping experience from that of the mass retailer.

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10 Tips to Manage Labor More Effectively in Your DC

Curt Barry — Tue, 26 Aug 2008 14:36:16 +0000

Most fulfillment processes are largely manual in nature; only the very largest companies can justify advanced automation. When you look at the total cost of back end order fulfillmentâ€”as we did by studying our proprietary F. Curtis Barry & Company Benchmarking ShareGroup dataâ€”youâ€™ll find that out of costs that include direct and indirect labor, occupancy, and shipping supplies, total labor generally makes up 60%-65%. (We have excluded shipping costs because it distorts comparisons.)Typically, labor rates were in the $7.00/hour range five years ago. In many direct businesses today they have reached $12.00 to $13.00, plus a 20% benefit rate added on. But overall productivity in DCs has remained flat over a 5- to 10-year period. So, after factoring in the increasing labor rates, productivity has actually declined. Then consider employee turnover. Industry experience is that employee turnover in many centers is 15%-25% or higher. Turnover costs range from $3,000 to $10,000 in people time, training, testing and the ramp-up to full production. This does not include expenses for agencies, ads, etc., which must be added on.

Given the current economic climate, most businesses are mandated to get more out of the resources they have. Here are 10 ways to improve productivity by managing DC labor more effectively.

Read complete article, 10 Tips to Manage Labor More Effectively in Your DC

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F. Curtis Barry & Company, Taurus Software Partner to Make Key Multichannel Data Easily Accessible and Usable

Curt Barry — Fri, 11 Apr 2008 15:16:05 +0000

FOR IMMEDIATE RELEASE:

Upcoming solution will bring together multiple data sources to analyze business performance, aid merchandise analysis, analyze productivity in call centers and fulfillment centers

Redwood City, CA, and Richmond, VA; April 2, 2008

For 20 years, Taurus Software has been â€œmaking data liquidâ€ for over 700 companies world-wide, with over 80 clients being in the direct marketing business. Founded in 1984, F. Curtis Barry & Company is a nationally recognized operations, fulfillment and warehouse consulting firm serving the multichannel industry, developing solutions that combine proven industry best practices with the latest technology available. Now, in a joint venture, the two companies are developing a software product that provides:

A management dashboard of key performance indicators (KPIs)
Pro-active alerts that identify areas where you can improve your business and save hard dollars
Ability for managers to easily â€œpoint, click and dragâ€ for analysis and reports
Online updates to these dashboards and analysis tools from the underlying databases
Modifiable templates that can be tailored for each business
Analytical modules including e-commerce, marketing, merchandising, inventory control, operations and finance
Ability to import plans, budgets and history (e.g., calls, orders, shipments, etc.)

The combination of F. Curtis Barry’s unparalleled industry knowledge of what to look for to improve your business, and Taurus’ ability to draw together data from any source and provide dynamic analysis, provides an entirely new way to view your business. Instead of having to find what’s wrong, these metrics will point it out to you.

The joint venture’s first application module will concentrate on merchandising, with an analytical series for measuring product profitability using net contribution to profit, including fulfillment and overhead expenses to the SKU level. Analytical sequences include:

Promotion, category, sub-category
Page and depiction
New versus repeat product
Import versus domestic product
Price range report

Consulting services will be provided by F. Curtis Barry & Company to interpret the KPIs and industry benchmarks, as well as to assist in planning strategies to improve their businesses.

Taurus’ President, Cailean Sherman, explains, “For the last five years we’ve been helping multichannel retail businesses gain ad hoc access to their data. But this has required that the users work through their data to uncover problems and inefficiencies. We knew that there must be a way to offer solutions, rather than just information. We knew that if we could gather all of the information necessary to answer a question how are my products really performing? including costs and budgets and overhead and sales that we could identify which products were truly making money, and which were losing money.
Adds Curt Barry, President of F. Curtis Barry & Company, Combining F. Curtis Barry’s experience and expertise with Taurus’ tools allows us to create a unique pro-active analytical package. It is platform and source system independent, which means any customer can take advantage of the metrics regardless of their application package.

About Taurus
Taurus Software has been making data liquid since 1987. Taurus offers an entire range of solutions that incorporate products such as DataBridgerâ€”a robust open platform data foundation creation tool, and application specific data models such as Ecomedate for Ecometry customers and Analysis Suiteâ€”a powerful analytical and reporting toolset. Taurus is a member of the HPe3000 Transition Partners Program and has technology partnerships with DirectTech, Quest Software, Lund Performance Solutions, Managed Business Solutions, Escalate Retail, Orbit Software, Pathway Pacific, DST Health Solutions and Acumium. To learn more about Taurus Software, visit www.taurus.com or call 650-482-2022 x1.

About F. Curtis Barry & Company
F. Curtis Barry & Company is a consultancy specializing in multichannel operations and fulfillment for catalog, e-commerce, and retail businesses. F. Curtis Barry & Company offer clients expertise in business process and order management systems, inventory management systems, warehouse management systems; warehousing and distribution; contact center services; inventory management and forecasting solutions; and strategic, financial, and operational planning for all business channels. To learn more about F. Curtis Barry & Company, visit www.fcbco.com or call 804-740-8743.

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Contact Center Metrics

Jeff Barry — Wed, 09 May 2007 14:35:13 +0000

Multichannel Merchant did a good job of reporting on one of Tocky Lawrenceâ€™s NCOF presentations last week (â€œDeveloping and Applying Multichannel Contact Center Benchmarksâ€). The presentation concentrated on defining and describing actual metrics with some real numbers that the audience could use to gauge their call center operations: call abandon rates, service level, handle time, and call-to-order ratio/productivity.

According to Tocky, one difference in F. Curtis Barry & Company recommendations about call center benchmarking compared to many other consultants, is that â€œOther consultants recommend not benchmarking yourself against other companies. We say you should do that every so often, because it can raise a red flag that you might not spot if you are just measuring against yourself. Itâ€™s hard to get an apples-to-apples comparison, because everyone measures differently.â€ There is not necessarily a single right or wrong way to define a given metric, he says, but call center managers need to be aware of what they actually choose to measure before comparing their numbers to another companyâ€™s.

For instance, as Tocky points out, â€œYou can measure the average speed of answer from when a call starts or from when an operator picks up. If you have an IVR, do you include that time in measuring speed of answer, or do you keep it separate time. The difference could be seconds to a minute more per call.â€

Tocky Lawrence is vice president of F. Curtis Barry & Co., a multichannel operations consulting company focusing on the entire direct fulfillment process with expertise in call center consulting and benchmarking.

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Top Trend for Warehousing and Distribution Professionals

Jeff Barry — Thu, 26 Apr 2007 03:34:17 +0000

F. Curtis Barry & Company ShareGroups always produce interesting insights, and the Warehouse Benchmarking ShareGroup meeting, hosted in Columbus, OH, by Victoriaâ€™s Secret Direct (March 12â€“13), was no exception to that rule. ShareGroup members generate their own â€œhot topicsâ€ for discussion during meetings. Topping this yearâ€™s list of the dozen warehousing and distribution topics of current importance to participants was the availability and quality of labor.

One of the basic points of concern related to the labor market is steadily rising costs, not to mention the corollary difficulty of simply finding reliable labor. In many markets, direct companies are in competition with labor users from other types of warehouses as well as other forms of retail and wholesale distribution. Labor rates appear to be on a continual increase nationally. In many markets the going wage is above $11.00 per hour. When you compare that with an average closer to $7.00 five years ago, you get a sense of the impact wages can have on warehouse operations. In addition, most companies that provide benefits such as insurance now are paying insurance rates as high as 15%â€“20% of wages, and even higher in some cases.

There is other evidence to highlight the importance of this labor issue. In recent client studies for new distribution center sites, F. Curtis Barry & Company has found that labor availability and quality has become a major factor. In fact, labor availability now often competes with transportation costs as the No.1 factor in where a company will decide to move a distribution center.

Labor quality, availability, and cost is the issue at the top of this yearâ€™s warehousing hot topics, but what are the others? The full list is posted on this blog, where you can leave a comment or join a discussionâ€”What are the most important warehousing concerns for your business?

–

F. Curtis Barry & Co. provides inventory management and forecasting solutions to multichannel companies interested in inventory management systems and inventory forecasting.

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Retail Distribution and Replenishment Operations Explored at Upcoming Learning and Networking Forum for Multichannel Retailers

Jeff Barry — Tue, 03 Apr 2007 15:05:53 +0000

Event includes a tour of LifeWay Christian Storesâ€™ warehouse and a benchmarking metrics discussion

Richmond, VA, April 2, 2007â€”Multichannel operations and fulfillment consulting firm F. Curtis Barry & Company has announced that its next Benchmarking ShareGroup, focusing on retail replenishment, will take place April 23â€“24, 2007, in Nashville, TN. To learn more please visit: http://www.fcbco.com/benchmarking/retail-replenishment-sharegroup.asp

The 2007 Retail Replenishment ShareGroup will be hosted by LifeWay Christian Stores, which operates a combined 520,000 sq. ft. of warehouse space, from which it fulfills a variety of products including books, videos, gifts, and religious apparel through an online channel and more than 130 retail stores.

A highlight of the Retail Replenishment ShareGroup meeting will be a tour of the LifeWay warehouse facility combined with an operational audit developed through participant analysis of the warehouse layout and product flow. F. Curtis Barry & Company will facilitate a review of operational benchmarking metrics as well as group discussions on hot topics chosen by participants themselves. ShareGroups provide participants a unique opportunity to receive and share benchmark data with their peers in a confidential, non-competitive format. More informally, the ShareGroup will offer extensive networking opportunities among directors and managers of retail warehouses and operations.

Participation Eligibility
Members in the 2007 Retail Replenishment ShareGroup should have at least five retail locations, annual sales in excess of $15 million, and, if they are multichannel retailers, the ability to split retail distribution/replenishment costs from other distribution costs.

The Retail Replenishment ShareGroup is an ideal learning forum for vice presidents of operations, retail warehouse directors and managers, retail area leads and managers, and others responsible for the day-to-day retail distribution/replenishment operations of their companyâ€™s distribution center.

Registration Information
The first 10 companies to register for the Retail Replenishment ShareGroup will receive one (1) free seat per company for an additional participant.

To register for the Retail Replenishment ShareGroup, fill out the online form at http://www.fcbco.com/benchmarking/retail-replenishment-sharegroup.asp. For more information, contact Jeff Barry, marketing manager, at (804) 740-8743, or e-mail him at jbarry@fcbco.com.

About F. Curtis Barry & Company
F. Curtis Barry & Co. is a Richmond, VA-based warehouse and fulfillment consulting firm specializing in solutions for multichannel businesses. With service and expertise that are second to none, the companyâ€™s long list of clients include: Neiman Marcus, Tiffany & Co., Landâ€™s End and Highlights for Children. For more information, visit: www.fcbco.com

Contact:

Company Contact:
Jeff Barry, Marketing Manager
804-740-8743
http://www.fcbco.com

Press Release Contact:
Alyssa Duvall
804-741-6776
http://www.bigoakinc.com

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Taking Your Company’s Operational Pulse

Jeff Barry — Tue, 20 Feb 2007 14:59:48 +0000

Bob Betke, vice president of F. Curtis Barry & Company, talks about F. Curtis Barry & Companyâ€™s innovative Benchmarking ShareGroups, celebrating their eleventh anniversary this year. ShareGroups cover a range of topics, including warehousing/pick, pack and ship, retail replenishment, forecasting and inventory management, and call center/customer contact center.

To learn more visit the “Continue Reading” link below…

Q: Could you give us the background of the ShareGroups concept?

Betke: We started doing benchmarking studies and formed ShareGroups back in 1996, and to date weâ€™ve benchmarked a couple of hundred companies. We try to focus on e-commerce and direct-to-customer companies in one ShareGroup, and retail in another.

We focus on companies that are willing to share productivity, cost and service level information; thatâ€™s one of the commitments going in. They have to be willing to share data openly; itâ€™s not on a blind basis. Each company is identified; their data is identified. We try to get people with similar business models together.

Q: What information do participants actually have to share in a warehousing ShareGroup, for example?

Betke: Prior to meeting, participants submit specific information about their companies with two components. One we call a profile, which gives information on basic company operationsâ€”how many catalogs, the size of the warehouse, what type of equipment they use, so if you were trying to visualize the companyâ€™s operation you could use this as a guide.

The reason the profile is important is that when you look at the productivity numbers, you would like to compare yourself to someone who has similar operations. You look for similar product types, similar number of orders, the size of the business, and things like level of automationâ€”is it a conventional or automated warehouse?

The other piece of data is detailed productivity, cost, and service level. For each operation in the warehouse we capture labor hours, costs, and units of work performed in each function. Thatâ€™s the true productivity measure. Once you gather the productivity data, you have it in man hours and dollars and units of work. From that we can build up a lot of different comparisons.

We build up a cost per order or cost matrix for each participant using this data. The cost includes labor, indirect labor, occupancy cost, and packaging materials.

Q: How can ShareGroups members use all this data?

Betke: What we tell people is that the best way to measure is against yourself over timeâ€”trends year to year and month to month. You look at a trend and you look at specific variances from some type of standard or expectation of performance, so internally you set a number thatâ€™s a standard. For example, a non-automated standard is that you should expect to be able to pack 30 packages an hour. Then you compare against thatâ€”Am I doing 25 or 35? You also compare trendsâ€”What did I do last year?

The real guts of the benchmarking process is the question â€œWhere should I focus my attention in my operation to try to look for improvementsâ€? We tell people that you canâ€™t take somebody elseâ€™s numbers and apply them to your own operation. But you can look for areas where someone is doing something differently than you thatâ€™s causing them to be more productive than you, and then you find out what that â€œsomethingâ€ is [to] see if it makes sense for your own specific operation.

Q: What are the other elements of ShareGroups?

The second important element is the discussions among participants, either in the larger group, or in smaller break-out groups, about specific issues that members of the group have expressed a desire to cover and best practices that companies are implementing. We gear about half the meetings toward these round table discussions. We donâ€™t do lectures, the material is all shared and volunteered by the people who attend.

The other part of the ShareGroup is a tour: a critique and audit of a facility. Each ShareGroup has a host company that provides space for the meeting. The host company agrees to have the group tour their facility and act as a set of consulting eyes looking for ways that company could improve its operation. Most times, the host companies give the group specific areas to also focus on for improvement ideas. So the host company gets a critique and an audit of their operation as part of the ShareGroup. The second day, each of the groups that went on the tour gives its findingsâ€”positive and criticalâ€”back to the host company (which invites its warehouse leadership to attend the debriefing). And out of that the host company usually comes away with either new ideas or confirmation that the direction theyâ€™re headed is the right one.

Q: Is there any similar kind of group meeting comparable in the industry that you know of?

Not really. Publications have surveys, but theyâ€™re more generic in nature. They also average data, which makes the data far less valuable. We would like to think that you can do something specific when you go back to your warehouse with what youâ€™ve learned from a ShareGroup. And participants talk to each other afterwards. They form sub-groups on an ad hoc basis to build relationships and knowledge-sharing among themselves. Some of the same people come back every couple of years, so thereâ€™s something they get out of talking to peers and finding out that other people struggle with the same things they do.

F. Curtis Barry & Company has a few ShareGroups coming out and invite you to read more about them at www.fcbco.com. The Warehouse ShareGroup will be hosted by Victoriaâ€™s Secret Direct in Columbus, OH, March 12â€“13. The Retail Replenishment ShareGroup will be hosted by LifeWay Christian Stores in Nashville, TN on April 23-24. The Contact Center ShareGroup will be hosted by Day-Timers in East Texas, PA on July 30-31 (more information to come in the next few weeks). For more information or to register for these cutting-edge industry events, visit the website or call Jeff Barry at (804) 740-8743.

Please visit our F. Curtis Barry & Company’s website to learn about our consulting services.

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F. Curtis Barry & Company » Benchmarking ShareGroups

Improve Warehouse Productivity by Measuring and Posting Numbers

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