In the mindset of a company focused on continuous improvement, hitting all the marks is just the beginning. The persistent question always remains: How can we get better?
Genco, a major third-party logistics service provider, operates a 410,000-square-foot distribution center for document management giant Xerox in Groveport, Ohio. Even before launching an effort to improve operations, Genco was meeting its client's expectations. "The facility was performing very well," says Marek Jezior, who works in Genco's Lean Solutions Group. "But we wanted to see what else we could do to impact performance." Specifically, he says, Genco was looking for ways to improve efficiency and take out cost—"anything that would bring value to the company and the customer."
The company decided early on to focus its efforts on its lift truck fleet. What ultimately brought substantial savings and improvements in productivity (not to mention safety) was linking lift truck management and labor management software. Historically, labor management systems (LMS) have not covered lift truck movements; they monitor workers using time-stamps, which are created whenever a worker scans a bar code. Genco and its software partners extended the concept of labor management from order selectors to the forklift drivers. Because it has more visibility into lift truck operations, Genco now can better manage its lift truck driver workforce.
The effort began with a close look at lift truck fleet management—an area where Genco felt its management systems were falling short. "One thing missing in our management was detailed information for the optimization of our material handling equipment," Jezior says. "We are in the business of moving materials for our customers. That's how we get compensated. And we had absolutely no way of measuring the activity and efficiency of our forklift drivers or the utilization of the equipment. We were interested in moving more material and reducing the cost of ownership." After consulting with Bob Simon, director of process solutions for Genco, Jezior set the twin goals of improving operating efficiency and operational safety.
The most obvious choice for a partner in developing better information on the fleet was The Raymond Corp.: All 26 pieces of lift truck equipment in the facility were Raymond trucks. And Raymond also brought to the table its iWarehouse fleet management system, a fleet optimization solution designed to manage driver access to vehicles, ensure compliance with record-keeping rules, record and alert managers when impacts occur, and track operational performance.
But the decision to go with iWarehouse wasn't a slam dunk. Jezior says Genco selected the system only after conducting an evaluation of Raymond's offering along with competitive products. The result was a decision to go with the iWarehouse system to improve safety and utilization of the facility's lift truck fleet.
SUM GREATER THAN THE PARTS
That proved a success. The iWarehouse system provided managers with better insight into the way the fleet was being used, opening the door to changes that would boost productivity.
"The biggest thing was visibility—what was happening on the floor," says Melinda Laake, manager of enterprise solutions for The Raymond Corp. "The management team knew they had opportunities for improvement, but they did not have the measurements or the visibility to make informed decisions."
She cites equipment use as an example. Managers had suspected that pickers weren't always using the right vehicles for specific jobs, Laake says. "After turning on iWarehouse, they found that to be the case." For instance, workers were using high reach trucks—one of the more expensive pieces of equipment in the fleet—for case picking on lower levels, an inefficient use of the equipment.
Once the lift truck management system was installed, managers were able to run the fleet more efficiently. But that was just the start. What made the project stand out was the successful effort to link the iWarehouse system with a labor management system. That is, by combining management of the lift truck fleet with management of the lift truck drivers—and other employees in the DC—Genco achieved even greater efficiencies.
For its labor management software, Genco selected a cloud-based LMS provided by Easy Metrics Inc., a division of Integrated Management Systems. (Integrated Management Systems originally developed Easy Metrics for its own use as a third-party provider of DC labor management services, but later commercialized the product and spun it off as a separate division.)
The integration of Easy Metrics and iWarehouse proved challenging at first, says Easy Metrics CEO Dean Dorcas, requiring the partners to solve problems that might seem simple on the surface, such as aligning clocks in the two systems and ensuring accuracy even if an employee forgot to sign off from one scanning device before picking up another. "We had a lot of different issues we had to work through," he says. But the basic components were pretty straightforward.
Jezior concurs. "Like anything new, the two systems did have some issues," he says. But he applauds the efforts of the two providers to make it work. "We had exceptional project management," he says. "After the initial start-up problems, the systems showed they had great potential to provide us with a 360-degree view of everything going on in the facility, not just the material handling equipment, but everybody.
As for how the initiative is working out, Jezior reports that the Groveport site has seen marked performance improvements since the introduction of iWarehouse and Easy Metrics. "We have seen a significant increase in productivity," he says.
For example, one key measure of lift truck productivity tracked by Genco—travel with load (the percentage of time lift trucks are carrying a load)—has risen by 8 percent since the implementation of the software systems. In addition, in the first three months after iWarehouse was installed, labor hours dropped by 18 percent. After the two systems were linked, the results got even better, with labor hours falling by 27 percent from the original level. Another important metric for Genco—labor cost per case handled—dropped by about 10 cents.
In addition, as a result of closer monitoring of driver activity, accidents have fallen sharply. Medium- and low-impact accidents fell by 80 percent, and severe impacts dropped to zero. The last is important financially: Jezior says a single severe impact incident could cost as much as $16,000. (Damage largely resulted from truck impacts with racks, damaging both.) The iWarehouse system reports any impacts, which are then confirmed by supervisors. As drivers have become aware of those reports, their safety record has improved. And the system flags underperforming drivers for retraining and operating restrictions until the retraining is completed.
Overall, the changes have led to more efficient and productive operations within the DC. Jezior reports that compared with 2011, the facility processed a higher monthly volume in 2012 with 15 fewer teammates on average.
Laake adds that the project was the first time that Raymond had merged iWarehouse data with an LMS, but it proved an excellent test. "We have quite an opportunity to expand this offering to other customers," she says.
Jezior is already taking the idea to other Genco sites. "We looked at the Xerox facility as a proving ground," he says. "The facility was performing well. If we can show significant improvement in a facility that is working to requirement, what impact will it have on a facility that is underperforming? We have several facilities that we are targeting for implementation."