If there is a single hallmark of today's highest-performing DCs, it's that the DCs are about moving products through their doors and back out again, not storing them. Inventory velocity has developed into one of the critical markers of business success, and the well-run DC is the key to making that happen.
Clearly, the DC's effectiveness depends on close coordination of what were once perceived as discrete functions—material handling, transportation, inventory management and so on. Assembling the perfect order means it must be on time, damage free, complete, and with the right documentation. That's possible only with collaboration across and beyond the enterprise.
That's why even the manager whose stated job description is overseeing internal DC operations has to pay attention to the turmoil in the freight transportation marketplace. Goods don't materialize in the DC—they arrive more often than not on a truck. Goods don't get to customers mysteriously—they depart from the DC on a truck.
Not that finding those trucks is easy. With a shortage of drivers, tighter regulations on drivers' hours of service, and other pressures, transportation capacity is hard to come by these days. And if managers are able to find trucks, they're discovering that it costs more money than ever to hire them.
Yet even amid the turmoil, some businesses are finding ways to assure transportation capacity is available when they need it and to minimize costs. In a new study, Best Practices in Transportation Management, researchers from the Aberdeen Group identified several markers of best-practice transportation management, including carrier collaboration, universal information access, and what they call 360-degree scorecarding.
To me, those are all inextricably linked. Collaboration means sharing information to help one another plan, so cross-enterprise information sharing is crucial. So, too, is honest assessment of not only providers' performance, but one's own—which means asking yourself whether your DC operations are helping or hindering carrier efficiency.
The Aberdeen Report highlights seven companies that have demonstrated best-practice leadership. We bring you similar stories here. For instance, in this issue, we report on Scholastic's success in working with its carriers to ensure that the newest Harry Potter release moved quickly in and out of Scholastic's DC. That didn't happen by accident. It happened because all the parts, and all the people, worked hard to make it happen.