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Diagnosis: Key Factor for the Selection of Results Improvement Tools in Distribution Centers

A distribution center is more than a physical space where products that are part of the supply chain are stored, there they concentrate and relate people, inventory and technology in order to achieve an efficient, flexible and dynamic response to the end customer. The task within a distribution center is not simple, the correspondence, synchronization and connection between the parties must have a high degree of accuracy, therefore, it is a challenge for the organizations to provide tools that facilitate the execution of the variety of needs and exceptions that are concentrated in this link in the supply chain.

But we go in parts, where does one start? What tools to provide the operation to generate the best possible results? Why, despite operational changes being carried out, the results remain the same?

Where is the problem:

In the diagnosis, in any operation before making any change, it is necessary to perform an operational analysis for the purpose of determining situations and trends that are not guaranteeing the correct performance of the distribution center. Just as in life each body demands different physical and emotional routines to obtain determining results in our performance, likewise each operation demands different actions and tools according to their operational profile that allow them to obtain more and better results.

For example, a distribution center that does not have defined process flows, delimited and strengthened by its workforce, will not have optimal results using a technological tool that automates its processes, therefore the first step for these operations is to organize the flows with everything and its exceptions, on the other hand, a highly coordinated operation in its processes, would have better results if it relies on technology to improve its indicators, respond to a disruptive change in the market or face business growth.

Next, an approach of the tools used by the distribution centers according to their operational profile.

Operational ProfileTools
Básic
  • Process best practices
  • Implementation of basic indicators

 

 

Medium
  • Process best practices
  • Implementation of internal indicators and for the client
  • Implementation of technology in their processes (WMS, Voice Technology, TMS, LM, Slotting, Billing, etc.)
Top
  • Collaboration technologies with internal, external customers and suppliers
  • High degree of process automation

Basic:

Those operations that have incorporated better practices in order to be more efficient, additionally have defined and implemented basic indicators that allow them to have control of the current operation. Typically, these operations try to solve the immediacy of day to day and their vision is short-term.

Medium:

They also have the tools of the basic profile, with tools that allow having control of costs and indicators for the client, such as the level of service, typically these operations enable their results from technologies that guarantee the reliability of the inventory and processes.

Top:

These operations have a long-term vision and the execution link in the supply chain represents a strategic axis for the fulfillment of the organization’s results, therefore they have collaboration technologies between clients (internal, external) and suppliers, joint and transversal demand management processes in the organization with the aim of achieving an adequate balance between supply and execution, and its technological level is process automation, since the logistics strategy is customer-oriented and efficient and strict compliance of the objectives.