At SEC Storage we’ve found that excessive downtime is often a symptom of over-resourcing, which is generally caused by two primary factors. Firstly, a reactive, not proactive attitude towards demand, and secondly, a poor understanding of the likelihood of extreme events happening.
The first issue – being reactive to demand – refers to the fact that in many businesses, there is a day-to-day disconnect between the warehouse and other areas of the company – such as sales or marketing – that possess more information about likely order-levels. This can manifest itself in many ways, and in the most severe cases, we’ve seen operations where large flash-sales that created huge surges in demand had not been communicated to the warehouse at all.
Whilst this may be an extreme example, in most businesses, there are several ‘tracker metrics’ or key performance indicators that would help operations plan labour levels more effectively if they were shared and understood better.
In the absence of good quality information, most logisticians tend to assume the worst, and over-resource as a result.
This issue is magnified by the fact that we, as humans, have a naturally poor perception of probability (if you don’t believe this, then consider that in a room of 40 people, there is a 90% chance that two share the same birthday).
The complexity of probability, combined with our natural tendency to believe that negative outcomes are more likely than they actually are, contributes to warehousing managers generally erring on the side of caution when setting labour levels: leading to excessive downtime. To combat this, we always recommend having a base understanding of the true likelihood an event actually happens.
You can usually achieve this relatively simply, by taking critical day-to-day demand indicators and calculating not just the average (or mean) value – as you probably do already – but also every fifth or tenth percentile from 0 to 100. In doing so, you essentially create a probability chart, which can be scaled in line with growth and turned into what-if scenarios. These can then be used to consider varying resourcing strategies more accurately and effectively plan how to accommodate those ‘freak days’ that worried you initially.
Ultimately, both these factors help create a much more scientific method of setting base labour levels, significantly reducing downtime. Better still, the information required is usually already in existence, and so it’s often a quick-win.
To avoid minimising downtime in a warehouse and enhance your storage efficiency through warehouse intelligence, get in touch by calling us on 01438 731990 or fill in an enquiry form on our contact page.