Make quality an important part of your warehouse
Tuesday, August 19, 2014
The process of recognizing quality has been applied for many decades. In the 20th century, a popular magazine developed its "Good Housekeeping seal of approval" based on the assumption that anything that would earn this award was a quality product. More recently, WERC launched its "warehouse facility certification" as a 21st-century equivalent of the Good Housekeeping seal.
Quality is the result of eliminating defects. It is important to avoid confusing quantity with quality.
Warehousing people, by the nature of their jobs, deal in quantity-based activity. They calculate pounds per man-hour and other quantitative measures to show how much they are doing. A highly productive warehouse operation that has high error rates, poor housekeeping and undependable service could deteriorate to the point where quantity of output is less significant than the poor quality.
During and just after World War II, quantity was more important than quality as our factories and warehouses raced to meet the demands of war and postwar consumption. During the last few decades, there was a new emphasis on quality in manufacturing. Statistical quality control and the manufacturing theories of Deming and Juran were enthusiastically adopted by the Japanese, and the rest of the world had to meet a new competitive challenge.
The most important measurements of warehouse quality are the perceptions of the customers who work with the warehouse and the consignees who receive deliveries from that warehouse. There are six quality metrics that are based on customer perceptions:
- Customer complaints
- On-time delivery
- Timely receiving
- Accurate and timely documentation
- Compliance with rules for loading and marking
- Timely and effective handling of special requests
Customer complaints are usually caused by errors, and one company has placed error reduction at the heart of its quality program. As errors are identified, the ratio between mistakes and error-free activity is noted, as well as the probable cause of the error.
For example, a shipping or receiving error might be caused by badly marked packages. Quality improvement then must involve the supplier that shipped that product to the warehouse.
On-time delivery can be checked without regard to customer complaints. If every delivery carrier is required to indicate the time that the delivery was actually completed, a database can be established.
Managing internal quality
Some quality measures are primarily internal, but if neglected they will occasionally influence customer perceptions.
Housekeeping has always been considered the primary barometer of management effectiveness in the warehouse. Academic studies have demonstrated that housekeeping is closely associated with management. Whether your warehouse is subject to inspection by customers, the customer's truck driver, a casual visitor or your boss, first impressions may be pervasive ones.
A sometimes-overlooked aspect of housekeeping is the personal appearance of the workers. This includes hourly employees as well as supervisors and managers. Some warehouses provide uniforms to create a neat personal appearance.
Sloppy appearance is considered to be a sign of low self-esteem, which is usually accompanied by lack of concern for quality. That is why we react positively to people who have a clean personal appearance.
Other internal measures include the following:
- Accidents: It is easy to measure accident-free days. Publishing this information is an effective way to communicate to your people that safety is a high priority in your warehouse.
- Employee turnover: High employee turnover is unfortunately a common problem in the warehousing industry. Although some turnover is normal, losing more than 15 percent of your employees annually may be an indicator of problems with quality of work life, supervision, compensation or some combination of these.
- Equipment downtime: Equipment downtime is a simple measurement. All machinery breaks down occasionally, but abnormal breakdowns may be a sign of poor maintenance, worn-out trucks or employee abuse.
- Product damage: When measuring product damage, consider two factors: both the damage caused by warehouse mishandling and the damage caused by carriers. Be sure that no one on your staff is allowed to falsely blame damage on carriers when it was actually caused by your people.
Monitoring customer service quality
Here are five questions that can be the basis of a monitoring system to trace your record in serving the customer:
- What percentage of shipments last week were delivered to the customer precisely on schedule?
- What percentage of deliveries last week arrived damage-free?
- What percentage of deliveries last week arrived with no discrepancies in quantity?
- How do each of these percentages compare with preceding weeks or the same week of last year?
- How can we explain the increase or decrease in any of these percentages?
By establishing a record of service that is apparently normal, you can develop a basis of comparison when actual or alleged events suggest abnormal variations in quality. It is equally important to establish a service record with senior management so that problems will remain in perspective when customer complaints are received.
Success factors for total quality maintenance
Here are four specific philosophies that are critical in maintaining quality in the warehouse:
- Strive for continuous improvement: Your warehouse operation should work to improve system performance each year. Yesterday's record may not be good enough. How can you do things better next week or next month?
- Understand the full cost of low quality: When the cost of not doing it right the first time is fully understood, your people will show increased interest in improving warehouse quality.
- Focus on causes, not symptoms: Do not emphasize inspecting after the fact. Instead, fix the system that causes the errors.
- Monitor daily performance: Utilize statistical tools to monitor the performance of every warehouse control system.
Measuring and controlling quality should be a continuous process in your organization. It is critical to maintain a log that demonstrates your quality record. Then when a customer makes a complaint, you can point to a detailed history of successful service.
One of the most significant comments about this process came from a good friend, Professor Emeritus Bud LaLonde of the Ohio State University: "If you don't tell your boss (or your customer) about your successes, you will only be remembered for your failures."
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