Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
Though not yet two years old, the Warehousing Education and Research Council's (WERC) facility certification program has already built a track record of providing benefits to the companies that take part. Participants say those benefits can come in at least two forms: improvement in operations in preparation for certification, and validation of existing capabilities and efficiencies by the certification itself.
The program was launched in late 2010 to fill what WERC's leadership saw as a void in the industry. Kate Vitasek, co-founder of the consultancy Supply Chain Visions and one of architects of the program, says the idea was to create a standard against which warehouse managers could measure their facilities' performance. "We've been doing benchmarking for several years, and I've been in over 300 warehouses," she says. "It is always sad to see companies that think they are much better than they are." She adds that she has literally seen warehouses that use sticky notes for labeling racks and write numbers on boxes for cycle counts.
The program, which is open to third-party logistics service providers (3PLs) as well as "first-party" private warehouses, also provides a means of independent verification of a facility's capabilities. Vitasek sees that as a major benefit for shippers who use contract warehouse services. Certification will assure those customers that a 3PL meets minimum standards, she explains, adding that she hopes that someday, third parties will be required to be certified before they're even allowed to submit an RFP.
Getting certified
To earn certification in the voluntary program, a facility must undergo an inspection and assessment of its processes by an independent auditor. The auditor grades the operation against the standards outlined in WERC's Warehousing Fulfillment Process Benchmark and Best Practices Guide. The assessment covers eight standard warehousing processes: receiving and inspection, material handling, slotting, storage and inventory control, warehouse management systems, shipping documentation, picking and packing, and consolidation and shipping. The auditor assigns scores to each activity based on a five-point scale—poor practice, inadequate practice, common practice, good practice, and best practice.
Steve Murray of Supply Chain Visions designed the program under the guidance of Vitasek and Michael Mikitka, WERC's chief executive officer. Murray now conducts the audits for WERC and has completed more than 20, including assessments of facilities run by major companies like Colgate and Starbucks. (To avoid the appearance of conflict, Supply Chain Visions is contractually barred from providing consulting services to a company it has audited for the program unless the two had a pre-existing business relationship.)
For companies considering going through the process, which does carry a fee, WERC provides an audit preparation guide. That guide, Murray says, includes a step-by-step explanation of what the auditor will look for.
The process itself involves a questionnaire, an initial telephone conversation with Murray about the procedure, and a full-day site visit. "We go through a kick-off meeting, then go out and walk the facility," he says. "We follow the flow of product from receiving to shipping, then we talk about the WMS and other tools used to run the warehouse." The evaluation covers 114 individual process elements categorized within the eight process areas.
After the audit, Murray prepares a spreadsheet tool and a report that normally runs 20 to 30 pages, which WERC sends to the facility. Finally, Murray and facility management hold a conference call to review the document. "I go through it to the level of detail they want," he says.
Earning the certification requires achieving a minimum score on each of the 114 elements. "You fail one, and you are not certified," Murray says.
Big benefits
As for what prompts companies to go through the certification process, Murray says it's a couple of things. "We believe it's in everyone's best interest to meet a minimum level of best practices," he says. While companies could perform self audits using the WERC guide, both third parties and first-party warehouse operators see value in the certification, he asserts.
"If you're a 3PL, theoretically you're in a better position to market your services if you can declare you are certified," Murray says. In a few cases, he adds, third parties have gone through the process at the insistence of their customers.
For first-party warehouses, it's usually about the process, Murray says. "Often we find that internally they know have problems and want someone to help them understand where the problems are and where they could improve. Or the managers of supply chain or distribution feel they're not getting enough respect from senior management. I've seen cases where a facility may be lobbying for capital, technology, or manpower. Going through the process will show weaknesses and support the request. Another potential motivation: If a facility manager can prove through the certification process that a facility has adopted best practices, it could dissuade management from considering outsourcing."
A fan of the program
Those who've been through the program can attest to the benefits. One such company is Hunter Fan, a Memphis, Tenn.-based manufacturer of ceiling fans. As Michael Ritter, the company's senior vice president of operations, explains, the manufacturer decided to seek certification last year in order to demonstrate to senior management and investors that its Byhalia, Miss., DC was among the best in the business.
Ritter credits David Phillips, general manager of warehousing and distribution, for leading the 936,000-square-foot DC through the certification process, a distinction it earned in November. Ritter says that when Phillips took over management of the DC last year, he began to roll out lean management tools to the facility's 85 employees, including the management group, supervisors, and the shop floor, with the aim of developing best-in-class processes as outlined in the WERC program. Other members of the DC's leadership team included Leone DeGaetano, director of transportation; Mike Bradford, operations manager; and Jim Bond, rework/returns and receiving manager.
Earning the certification, Ritter says, validated for him and other senior managers that the DC was operating as well as if not better than others. "It told me the facility is managed better than average and that we had a professional environment focusing on the right things and performing very well." For employees, he adds, it provided reinforcement that the work asked of them has been worthwhile.
Quest for validation
For OHL, a major third-party service provider, the decision to go through the certification process was part of a broader effort to standardize operations across its facilities as well as ensure it was staying abreast of industry trends. As Randall Coleman, OHL's senior vice president for the South region, explains, "We had embarked on a program about a year ago trying to drive consistency across all our operations, so what the customer is seeing is the same in each DC. At the same time, we wanted to challenge ourselves to show we were moving in the right direction in regard to best practices."
Coleman says OHL used the WERC best practices guide as a roadmap to improve service levels. To date, the Brenéwood, Tenn.-based company has completed certification of three facilities.
Looking at best practices, he says, helps alert companies to how those practices evolve. "There's always a tendency to allow yourself to be constrained by what's going on within the four walls," he says. "You don't look outside. But what was acceptable performance two to five years ago is now run of the mill or subpar. So participating in the certification program was a good way to benchmark against the best in class."
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
After years in the military, service members and their spouses can find the transition to civilian life difficult. For many, a valuable support on that journey is the U.S. Department of Defense (DOD) SkillBridge program. During their final 180 days of service, participants in the program are connected with companies that provide them with civilian work experience and training. There is no cost to those companies while the service member continues receiving military compensation and benefits.
Both sides benefit from the program. “We’re proud to work with SkillBridge to give back to our military veterans for the bravery and sacrifices they’ve made for all of us,” Troy Pederson, director of training and development at LiftOne, a Hyster-Yale dealer and established SkillBridge employer, said in a release. “In the last year, we’ve helped 10 SkillBridge interns transition from military to civilian life, and the value and positive impact of the program can’t be overstated. At LiftOne, we’ve gained so much from the experience and diverse mix of technical and leadership skills of our SkillBridge candidates.”