Warehousing is a Productivity Success

Warehousing is one area where productivity has risen steadily over the last couple of decades.This has been partly due to the rise of the ‘super retailer’, the boom in online purchasing - and the boom in online grocery sales.  All of this was energised by the COVID pandemic when customers were, or felt, unable to go to their local stores and ventured bravely into online food and grocery buying,  

The warehouses have therefore got steadily bigger and the level of technology has risen sharply. Warehousing has long been a fruitful area for technology deployments - firstly in the data processing area because effective warehousing depends on sound forecasting and stock control … but more lately in the automation arena with modern warehouses using automated order picking and fulfilment.

The best warehousing and warehousers do not just invest in technology - they also invest in the surrounding systems and business processes, in the training and development of staff , in layout planning and in communication  technology,

This is typical of technology deployment.  It needs to be part of wider management practice, built on a sound technical infrastructure and within an effective management framework.

Broadly warehousing seems to have got this balance right.  We should salute those involved for their systematic and coherent approach to productivity improvement.

Other sectors, take note!

You Don't Have To Finish Your Automation Project

When firms are looking at automation (or AI) to find other ways of changing and improving what they do), the approach should always be to look at what you do now and how you do it.  You can then automate an already-improved version of your processes and working methods.

Those who don’t do this end up automating existing inefficiencies- doing the wrong things faster.  I won’t bother to explain that this is at best sub-optimal.

So, carry out a review of your current product (or service) portfolio, of the way that production/delivery is structured and of the various production/delivery processes.  In particular note which processes give rises to most errors and rework, most customer complaints and most product returns.

Talk through issues with the management team, with supervisors and with operational staff.  Find out their complaints, frustrations, pet hates  - and preferences.

Then, work through alternative ways of satisfying the needs of your customers (including currently unmet needs) and start to build a vision of your new factory, warehouse, office or whatever with all (or most of) the negative points removed and all of the positive points retained.  Then think of the role(s) that automation might play.

Finally, within your constraints, work towards creating the nearest practical implementation of this vision that you can. You might even find that the improved structures, processes snd working methods are enough to give you a real productivity boost without automation. You might be able to use the potential investment more effectively  elsewhere.   

Create Common Sense

 Most of us have been in a situation at work where rules have been enforced which are clearly stupid to anyone with common sense.  If you doubt this, you need to read ‘Dilbert’ more.

Do you want your employees to obey rules which, to them, are ridiculous …. or do you want them to challenge those rules.

There is a useful creativity ‘technique' which asks people to temporarily overturn the rules in play while they think up new ideas.  This applies not  just to formal rules but to established ways of working.   The technique can be useful in allowing people to ‘think outside the box’ before later checking that their new ides work within the important ‘boxes’.

So, back to  ridiculous rules.  Give your employees both the ‘permission’ to challenge them - and a process by which they con do so.

If eventually, all the rules you apply  are seen as being common sense by your employees,  they will obey them.

Productivity will rise!

Does Manufacturing Matter?

 Spoiler alert!. Yes, it does!

Manufacturing, in spite of continual productivity gains over several decades, is a large employer.  But it also employs a multiple more (often several multiples more) in the wider supply chain - those providing parts, components and ancillary services to the large main manufacturing organisations - the factories themselves.

Manufacturing often supports highly skilled - and therefore well-paid - jobs.  This is obviously good for those well-paid employees but it also good for the taxman (and therefore wider society) and for surrounding businesses where that money is spent (and so its good for the local/regional economy.

Manufacturing (in specific sectors) supports a great deal of research and development, resulting patent filing and the creation of high value intellectual property.

In most countries, manufacturing is a key component of GDP and thus national productivity

Sure, productivity gains reduce the number of workers needed to produce a sheet of steel, a car or given quantity of medicines.

But manufacturing is resilient and innovative.  It continually comes up with new product ideas and new variants of existing product ideas to keep factories running and growing.  Most cities that are (or were) manufacturing hubs have spawned universities and colleges nearby - and the two form a symbiotic relationship and the start of a virtuous spiral of growth where high value jobs require high levels of skill, and high levels of skill produce greater innovation.

Any industrial strategy must include a manufacturing strategy - but alongside an education strategy, a skills strategy snd a strategy for development of the supporting macroeconomic transport and telecommunications infrastructures.

I hope the incoming UK government understands this!