Taking Your Company’s Operational Pulse
Bob Betke, vice president of F. Curtis Barry & Company, talks about F. Curtis Barry & Company’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.
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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 we’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; that’s one of the commitments going in. They have to be willing to share data openly; it’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 operations—how many catalogs, the size of the warehouse, what type of equipment they use, so if you were trying to visualize the company’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 automation—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. That’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 time—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 that’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 that—Am I doing 25 or 35? You also compare trends—What did I do last year?
The real guts of the benchmarking process is the question “Where should I focus my attention in my operation to try to look for improvements”? We tell people that you can’t take somebody else’s numbers and apply them to your own operation. But you can look for areas where someone is doing something differently than you that’s causing them to be more productive than you, and then you find out what that “something” 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 don’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 findings—positive and critical—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 they’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 they’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 you’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 there’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 Victoria’s Secret Direct in Columbus, OH, March 12–13. 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.