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DC Management Best Practices!April 8, 2015!
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J. Paul Dittmann, Ph.D. Executive Director, Global Supply Chain Institute University of Tennessee [email protected]
DC ManagementBest Practices"
Sean Coakley Senior Vice President Kenco Group, Inc. [email protected]
Confidential & Proprietary!
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» Private, woman-owned company established in 1950!
» Vertically integrated third-party logistics provider !
» $520+ million in revenue (10.3% CAGR)!
» 31 million sq ft in 90+ locations in North America (8th largest 3PL)!
» $80 billion of retail value managed through facilities!
» 4,800+ employees!
Women’s Business Enterprise National Council 2014 Certification!
2014 Top 10 3PL Provider
Inbound Logistics!
2014 Top 75 Green Supply Chain Partner
Inbound Logistics!
2014 Top 100 3PL & Cold Storage Provider
Food Logistics!
2014 Great Supply Chain Partner
Supply Chain Brain!
Confidential & Proprietary! 3!
Kenco Background"
» Over 90 Facilities and 31 million SF
» Customer Dedicated and Multi-Client Facilities
» Ambient, Temp-Controlled, Food-Grade, and FDA-Regulated
» Lean Six Sigma Operating Methodology
» Integrated Value-Added Services: Packaging, Light Manufacturing, Kitting, Returns Management, Postponement, and B2C Order Fulfillment
» Transportation Presence in 40+ Facilities
4!Confidential & Proprietary!
Kenco Background"
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Expectations of 3PL"
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“The significant problems we face cannot be solved at the same level of thinking we were at when we created them.” - Albert Einstein"
Third-party Logistics providers’ core competency is the development of Processes, Technology and People required to design, execute and improve distribution networks.!
• 72% of Shippers are increasing the use of 3PLs (Source: 2014 18th Annual Third-Party Logistics Study) !
3PL's must provide a methodology to Standardize, Measure, and Improve distribution center operations (warehousing operating systems).!
PRINCIPLES"
TOOLS"
PROCESS"
» Strategy Alignment"» WERC Benchmarking"» Knowledge Sharing & Mgmt"
» Lean Six Sigma"» Standard Work"» Control Charts"
» WMS / LMS"» Gemba"» Kaizen"
» Safety & Security"» Quality Mgmt"» Communications"
» Financial Controls"» Talent/Labor Mgmt"» 6S & Visual Mgmt"
Expectations of 3PL"
» Behavioral Development"» Inter-company & cross-
company collaboration"
Operational Excellence
Continuous Improvement
Innovation & Best Practices
Confidential & Proprietary! 6!
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DC ManagementBest Practices"
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Best Practices From 3PL Perspective""Ø Know the profile!
Ø Consolidate inventory to serve all channels!
Ø Weigh flexibility vs. automation!
Ø Recognize the direct and indirect value of good people!
Ø Look at dependencies beyond the 4 walls !
Confidential & Proprietary!
DC ManagementBest Practices"
Ø The ABCs of DCs!§ Receiving!§ Picking / Order Fulfillment / Shipping!§ Lean Warehousing!§ Cross-Docking!§ Metrics and Planning!§ Warehouse Information Systems!§ Warehouse Layout and Space Optimization!§ Warehouse Network Optimization!§ Safety and Security!§ People!§ Sustainability!
Ø Distribution Center Evaluation Tool"
8!Confidential & Proprietary!