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Supply Chain Challenges, Warehouse Operations

What’s Wrong with Continuous Improvement Programs in Logistics?

Alex Stark | September 12, 2019

Lip Service.  According to Merriam-Webster, it’s a belief “expressed in words but not backed by deeds.”

There’s a lot of that going on when it comes to programs for continuous improvement in logistics. Some companies do quite a good job presenting the image of a quality-driven operation. But too often the banners, slogans and award certificates – the eye candy – don’t translate into real cultural change.

That’s what continuous improvement is, really.  A culture, not a program.  Culture can’t be created.  It just is (Click to Tweet).  Continuous improvement cultures develop organically, over time. And for logistics operations, such a culture is incredibly important.

Excellence in our space is doing a great job and then coming in the next day having the motivation to do it just a little bit better. It’s not always glamorous, but it’s necessary.

That’s why it’s so critical to get it right. And to call attention to it when we get it wrong.

Problems with continuous improvement programs in logistics

continuous improvement in logisticsLean programs that aren’t very lean. That’s right, the management approach that seeks to eliminate waste can, if we’re not careful, become weighed down with bureaucracy – meetings, paperwork, reporting and budgets. We wrote an entire eBook about the problem. Yes, efforts around continuous improvement in logistics do require some structure, but the tools, forms and processes amount to nothing if you don’t change the way people think.

The lack of an unwavering, long-term commitment. Executives who seek the efficiency-driving benefits of continuous improvement too often look toward “lean-in-a-box” solutions – and there’s no shortage of consultants selling such programs. But instilling a culture of continuous improvement is not like installing whole-house air conditioning. You can’t simply write a check and enjoy the results. It requires a year-after-year commitment of time, energy and money until every associate understands that the commitment, and the expectation, is real.

Too much focus on soliciting ideas, rather than problems. Here’s an example. Let’s say office workers need pens clipped to their breast pockets to be most efficient, but those pens leak and often ruin their work shirts. The idea-oriented quality program wants these workers, before they even surface the problem, to come up with the idea for the pocket protector or the never-leak pen. Why are we asking associates to be inventors? We want them, first and foremost, to be observers who can recognize waste and inefficiency and aren’t afraid to say “Let’s fix it.” It’s the problems that should be the trigger for continuous improvement, not the solutions.

Download the Free KANE eBook, How Lean is Lean?

Continuous improvement case example

At KANE, we haven’t completely cracked the code on instilling a continuous improvement mindset in every facet of the business (if we had, we’d have nothing to improve upon!), but we’re making progress. One recent example illustrates some of the key success factors for a continuous improvement initiative. For a large liquor distribution operation, we reduced over, short and damaged (OS&D) product as a percent of total inventory by 68%. 

The following elements of this logistics continuous improvement initiative helped to drive success:

  • We worked as a cross-functional team. The team included members from warehousing, transportation, IT, and quality. Senior executives from KANE were involved, and a client representative was also an integral member of the team.
  • A lean program coordinator drove the effort. The initial root-cause analysis session surfaced many sub-initiatives, so the effort required solid project management skills to keep all the plates spinning. This helped us stay on task with deadlines and remain accountable to each other.
  • We put our money where our mouth is. As an example, the operation had 4 turntable wrappers but we requested capital to purchase 3 orbital wrappers to eliminate pallet movement during wrapping, which was causing some damage.
  • We improved SOP training. Training was being done, but sessions were different for different teams and shifts. We standardized all training and decided to use the same trainer for all teams and shifts for continuity.
  • We changed our incentive system. Associates admitted that the drive to hit productivity-related metrics led them to take shortcuts. To drive OS&D numbers down, we actually lowered the production requirement and raised the accuracy requirement for associates, which changed behavior.
  • We measured daily. This operation integrates warehousing and direct store delivery services using a dedicated fleet. Numbers were fed back from the stores to the operation and regularly reviewed with associates.

Bottom line: we committed to a bold improvement objective and did not shy away from spending money and making pretty material changes to the business (e.g., incentive system) to make it happen.

And we did it all without banners, slogans and t-shirts. 

All action; no lip service.