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TOMPKINS ASSOCIATESSupply Chain Excellence
Worldwide Central Campus8970 Southall RoadRaleigh, NC 276161-800-789-1257(919) 876-3667(919) 872-9666 FAXwww.tompkinsinc.com
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Tompkins Associates
Setting Continuous Improvement Priorities in Warehouse Operations
Executive Summary
This monograph presents a method of setting continuous improvement priorities for ware-
house operations. The Team-Based Continuous Improvement Diagnostic Survey allows a firm to
benchmark its current status on:
n Level of warehouse excellence
n Acceptance of continuous improvement
n Cultural progressiveness or lack of cultural progressiveness
n Acceptance of a shared direction for a company
n Priorities for warehouse continuous improvement
Each of these topics is briefly discussed and the sources of additional information are given.
All firms are encouraged to use the diagnostic survey as a tool to guide their pursuit of warehouse
continuous improvement.
Tompkins Associates
Setting Continuous Improvement Priorities in Warehouse Operations
Table of Contents
EXECUTIVE SUMMARY ............................................................................................. i
1.0 Setting Continuous Improvement Priorities .................................................... 1
2.0 The Team-Based Continuous Improvement Diagnostic Survey for
Warehouse Operations .................................................................................... 3
3.0 Interpreting the Team-Based Continuous Improvement Diagnostic
Survey Results................................................................................................. 4
4.0 Warehouse Excellence .................................................................................... 4
5.0 Continuous Improvement ................................................................................ 8
6.0 Culture ............................................................................................................ 9
7.0 Model of Success .......................................................................................... 10
8.0 Prioritized Warehouse Requirements of Success .......................................... 11
9.0 Path Forward ................................................................................................. 12
APPENDIX A: Team-Based Continuous Improvement Diagnostic Survey for
Warehouse Operations
APPENDIX B: Team-Based Continuous Improvement Diagnostic Scoring Sheet
APPENDIX C: Team-Based Continuous Improvement Diagnostic Survey
Interpretation Sheet
Tompkins Associates
Page 1Setting Continuous Improvement Priorities in Warehouse Operations
1.0 Setting ContinuousImprovement Priorities
“Successful Warehousing Operations
Must Be Based Upon A Long-Term
Commitment To A Broad-Based,
Common Sense, Structured Process Of
Continuous Improvement.”
“More Important Than Doing Things Right
Is Doing The Right Things.”
Companies with world-class warehous-
ing operations will adopt continuous improve-
ment. The difference between WORLD-CLASS
WAREHOUSING OPERATIONS and WORLD-
CLASS WAREHOUSING OPERATIONS
and WORLD-CLASS WAREHOUSING
OPERATIONS is the approach they use to
set continuous improvement priorities.
There are four potential approaches to
setting continuous improvement priorities:
1. Bottom-Up
2. Top-Down
3. Top-Down Consensus
4. Broad-Based Consensus
The first two approaches are unstructured
and are heavily impacted by the perspective
of the persons setting the priorities. With the
bottom-up approach, priorities are established
by individuals with an in-depth understand-
ing of a small portion of the firm. The priori-
ties that typically result from the bottom-up
approach have very limited scope and can be
easily improved. The difficult, broader im-
pact priorities are not addressed. Often, after
several of the easily addressed bottom-up pri-
orities are handled, the organization “runs out”
of things to improve. Obviously, the company
has not reached utopia, it has simply resolved
the obvious issues and it lacks the perspec-
tive to identify the broader, more significant
opportunities.
The second approach to prioritization,
top-down, may or may not result in the iden-
tification of the greatest impact prioritie.
Never-theless, whether the priorities are right
or wrong is not the true issue. Priorities man-
dated in a top-down manner will not be widely
accepted as the persons involved with creat-
ing continuous improvement were not active
participants in establishing the priorities. For
this reason, participation lacks enthusiasm and
the process of continuous improvement is
stifled. Thus, even if the right priorities are
identified, the true potential of TEAM-
BASED CONTINUOUS IMPROVEMENT
will not be realized.
Understanding the problems with the first
two approaches, we suggested a broad-based
questionnaire to identify the priorities in
world-class warehousing operations. This
questionnaire is given in Table 1.1. The
thought behind the questionnaire was that by
asking a broad base of people for their
prioritization, several different perspectives
could be used to establish a consensus on the
true continuous improvement priorities for the
firm. Unfortunately, this approach did not
work. Instead of individuals sharing their true
perspectives, they completed the questionnaire
in accordance to how they believed upper man-
agement wanted them to complete it. Thus,
what was obtained was not the best priorities
Tompkins Associates
Page 2Setting Continuous Improvement Priorities in Warehouse Operations
Table 1.1: Warehouse Management Priorities Questionaire
1. Out of a total of 100 points, rate the importance of pursuing the following require-
ments of success (the higher the points assigned, the greater the importance).
A. Professionalism
B. Customer Awareness
C. Measurement
D. Operations Planning
E. Centralization
F. Public Warehouses
G. Pace
H. Variety
I. Flexibility
J. Uncertainty
K. Integration
L. Inventory Accuracy
M.Space utilization
N. Housekeeping
O. Order Picking
P. Human Resources
Q. Team Players
R. Automation
S. Automatic Identification
T. Control Systems
Total 100
Requirements of Success Points
2. State the goal that you think should be established fot eh five highest priority
requirements of success.
Requirements of Success Goal
1.
2.
3.
4.
5.
Tompkins Associates
Page 3Setting Continuous Improvement Priorities in Warehouse Operations
for continuous improvement, but opinions of
what upper management was thought to de-
sire. Even though this involved a broad base
of people, what really resulted was a top-down
consensus of what people thought were up-
per management’s priorities.
What was needed was a survey that ex-
tracted from a broad base of people what they
believed, from their perspectives, were the true
priorities for continuous improvement. Such
a survey has now been developed and has been
successfully used to establish the true priori-
ties for companies to pursue continuous im-
provement.
2.0 The Team-BasedContinuous ImprovementDiagnostic Survey forWarehouse Operations
The Team-Based Continuous Improve-
ment Diagnostic Survey For Warehouse Op-
erations is a tool that may be used to define a
broad-based consensus of the continuous im-
provement priorities for a warehouse. The
survey is presented on pages 13 through 21 of
this monograph and the Team-Based Continu-
ous Improvement Diagnostic Survey Scoring
Sheets are given on pages 23 and 24. The
Team-Based Continuous Improvement Diag-
nostic Survey Interpretation Sheet, found on
pages 25 and 26, allows each company to de-
fine its Team-Based Continuous Improvement
Acceptance as well as its Warehousing Pri-
orities. The survey consists of 98 pairs of
questions in which each person responding to
the survey is asked to place a weight on each
question (0 - 5) to indicate the relative accep-
tance of each question, where the total weight
for each pair of questions is 5. For example,
consider the pair of questions below:
n I love hot dogs.
n I love pizza.
If I hated hot dogs and loved pizza I
would rate Question 1 “0” and Question 2 “5”.
If I loved hot dogs and hated pizza I would
rate Question 1 “5” and Question 2 “0”. If I
liked both hot dogs and pizza, but like pizza a
little better I would rate Question 1 “2” and
Question 2 “3”.
The 98 questions consist of:
n Questions on an organization’s accep-
tance of continuous improvement
n Questions on an organization’s culture
n Questions on an organization’s model
of success
n Four questions for each of the 20
Warehousing Excellence Require-
ments of Success
Once a survey is completed, the Scoring
Sheet and the Interpretation Sheet may be used
by individuals and companies to define their:
n Level of warehouse excellence
n Acceptance of continuous improve-
ment
n Cultural progressiveness or lack of
cultural progressiveness
n Acceptance of a shared direction for
the company
n Priorities for warehouse continuous
improvement
Tompkins Associates
Page 4Setting Continuous Improvement Priorities in Warehouse Operations
3.0 Interpreting the Team-Based ContinuousImrpovement DiagnosticSurvey Results
The five key outputs from the survey are:
n Warehouse excellence
n Continuous improvement
n Culture
n Model of success
n Prioritized warehouse requirements of
success
The following sub-sections present a
brief overview of these five topics. The best
source for additional information on continu-
ous improvement is the book Winning Manu-
facturing. The best source for warehouse
requirements of success is the video Ware-
housing Strategies. The best source for addi-
tional information on culture and models of
success is the video tape Manufacturing:
Making A Difference.
4.0 Warehouse Excellence
Today’s warehouses are marked by cer-
tain trends which must be understood prior to
implementing any new strategies on your jour-
ney to warehousing excellence. The first of
these trends is a reduction of all inventories.
Inventory is being recognized as an even more
important area of cost reduction than labor.
Along with inventory reduction comes some
form of Just-In-Time. Not only must there be
less inventory, the inventory must move from
supplier to user with as little interim storage
as possible. There is also an increased amount
of customization taking place. In order to sat-
isfy the customer’s demands, companies are
increasing the product mix - more styles, col-
ors, features, sizes - and they are also respond-
ing to the customer’s desire for faster delivery.
At the same time, many companies are find-
ing that warehouse space is being taken over
by manufacturing. In order to improve flex-
ibility and quality, companies are installing
manufacturing equipment in the space once
reserved for warehousing. Finally, the em-
phasis on improved quality has been extended
to the warehouse in the form of accurate, com-
plete orders shipped promptly in image-en-
hanced packaging with accurate data tracking.
Without recognizing these trends, any
planning for today’s warehouses will be based
upon an obsolete vision of the direction that
warehousing is headed. While strategic plan-
ning is one of the most important functions of
warehouse management, a prerequisite to stra-
tegic planning is the establishment of a clear,
long-term, consistent vision of successful
warehousing in the 1990s. Although the spe-
cific vision may vary somewhat from com-
pany to company, a number of fundamental
strategies must comprise the core of the vi-
sion. Here, then, are the twenty requirements
of warehouse excellence.
1. Professionalism: Warehousing must
be viewed as a critical step in the material flow
cycle and not as a necessary evil.
Tompkins Associates
Page 5Setting Continuous Improvement Priorities in Warehouse Operations
n Warehouse managers must be consid-
ered part of the management team and
not second-class citizens.
n Warehouse management and employ-
ees will be trained to handle their
tasks and not viewed as overhead.
n Management will understand the true
value of warehousing and the reality
that warehousing often is one of the
last frontiers for improvement.
2. Customer Awareness: Successful
warehouse operations must have a high regard
for the customer, must know the customer’s
requirements, and must consistently meet
these requirements.
n Warehouses must be measured by
how well they meet the customer’s ex-
pectations.
n Warehouses will function as a support
activity for customers and will be anx-
ious to fulfill customer requirements.
n Warehouse and customer adversarial
relationships will be eliminated.
3. Measurement: Warehouse standards
must be established; performance must be
measured against these standards and timely
actions must be taken to overcome any devia-
tions.
n Warehouse management will produce
monthly reports on space utilization,
labor utilization, damage, inventory
accuracy and equipment utilization.
n Management will view warehousing
from a positive perspective because
of the information they receive about
warehouse performance.
n Warehouse measurements will be
used to plan future capacity.
4. Operations Planning: Systems and
procedures must be put into effect that will
allow the warehouse manager to proactively
plan the operations as opposed to reactively
responding to external circumstances.
n Warehouse managers will truly man-
age their warehouse.
n Firefighting will be minimized.
n Warehouse plans will be established
that will result in the warehouse be-
coming a strategic weapon for cus-
tomer service.
5. Centralization: The trend must be
toward larger, centralized warehouses instead
of smaller, decentralized warehouses.
n Continued improved transportation
responsiveness and reliability will
support the trend towards fewer ware-
houses.
n The logistics information and mate-
rial movement systems will be more
integrated.
n Systems and procedures will be put
in place to achieve continuous flow
distribution.
6. Third Party: More intelligent use of
third party distribution organizations will be
the norm.
Tompkins Associates
Page 6Setting Continuous Improvement Priorities in Warehouse Operations
n As the true costs of warehousing are
understood, third party distribution
services will be seen as a viable al-
ternative.
n Third party distribution services will
continue to improve, reduce costs, and
broaden the range of tasks performed.
n Third party distribution organizations
will be viewed more as partners than
service providers.
7. Pace: The reduction of lead times,
shorter product lives, and increased inventory
turnover will result in an increase in the pace
of the warehouse.
n Warehouses will be required to be
more responsive and will accommo-
date this requirement by working
smarter, not harder.
n The pace of warehouse changes will
be greater than in the past and this
pace will be expected and accepted.
n Systems will be put into place to sup-
port continuous flow warehouse op-
erations.
8. Variety: More different SKUs and
more special customer requirements will re-
sult in an increase in the variety of tasks per-
formed in the warehouse.
n Warehouses will be responsive to spe-
cial customer packaging, pricing and
labeling requirements.
n Warehouses will be required to do op-
erations that were traditionally thought
to be manufacturing operations.
n Systems and procedures will be put
in place so that we can handle orders
the way the customer desires.
9. Flexibility: Due to the increase in
warehouse pace and variety, all warehouse
systems, equipment and people will be more
flexible.
n Warehouse organizations will be
structured so as to provide the maxi-
mum flexibility.
n Warehouse employees will be cross-
trained to handle a wide variety of tasks.
n Warehouses will make better use of
part-time and temporary work forces.
10. Uncertainty: All uncertainty will
be minimized; discipline will be increased.
n Warehouse employees will be held ac-
countable for doing it right the first
time. Checkers will be eliminated.
n Dock operations will be planned and
will function according to the plan.
n Exceptions and deviations will occur
infrequently, and when they occur,
they will be rectified quickly.
11. Integration: Activities within the
warehouse (receive, store, pick and ship) will
be more integrated and the warehouse will be
more integrated within the overall logistics
system.
n Operational synergy will occur as a
result of warehouse employees work-
ing together as a team.
Tompkins Associates
Page 7Setting Continuous Improvement Priorities in Warehouse Operations
n The warehouse will no longer be an
organizational island, but will be in-
tegrated with manufacturing, market-
ing, transportation and the entire
organization.
n Communication networks will sup-
port the integration of the customer
to the warehouse and the entire orga-
nization.
12. Inventory Accuracy: Real-time
warehouse management systems will utilize
cycle counting to manage inventory accuracy,
and accuracy above 99% will be the norm.
n As management demands accurate in-
ventory, annual physical inventories
will be eliminated.
n The true purpose of cycle counting
will be understood as the proper man-
agement of inventory.
n Systems will be put in place to sup-
port ongoing cycle counting.
13. Space Utilization: Space will be
more efficiently and effectively utilized.
n Management will better understand
the cost of space and this will lead to
improved space utilization.
n Innovative material handling and stor-
age equipment will be installed to
minimize aisles and maximize cube
utilization.
n Random storage will replace assigned
storage.
14. Housekeeping: Quality housekeep-
ing will be a priority and a source of employee
pride.
n The fact that there is efficiency in or-
der will be widely understood.
n Warehouse facilities will promote a
high level of warehouse housekeep-
ing.
n Housekeeping discipline will become
a portion of the warehouse culture.
15. Order Picking: The criticality of
order picking will be understood, and proce-
dures and layouts will be designed to maxi-
mize picking efficiency and effectiveness.
n Orders will be pre-routed and pre-
posted to result in increased effi-
ciency.
n The issues of zone, batch and wave
picking will be understood and fully
evaluated in the design of the best
picking system.
n A wide variety of material handling
and storage equipment will be evalu-
ated in the design of an order picking
system.
16. Team-Based Continuous Improve-
ment: The power of the people will be un-
leashed via a methodical team-based process.
n Warehouses will be leadership driven
and self managed.
n Employees will be actively involved
with teams and the process of con-
tinuous improvement.
Tompkins Associates
Page 8Setting Continuous Improvement Priorities in Warehouse Operations
n Warehouse employee development,
alignment, and participation will be
an important priority.
17. Continuous Flow: There will be a
clear focus on pulling product through the lo-
gistics system and not building huge invento-
ries.
n DRP and EDI will support continu-
ous flow.
n Inventory turns will be a high priority
throughout the organization.
n Customized warehousing will allow
for a reduction in storage SKUs while
increasing the SKUs offered to our
customers.
18. Warehouse Management Systems:
Real-time, bar code based, Rf communication
Warehouse Management Systems (WMS) will
be required to meet today’s requirements.
n WMS will be real-time, bar code
based, RF driven systems that maxi-
mize warehouse performance.
n WMS will be planned, justified, and
implemented by professionals who
truly understand warehousing.
n All warehouse employees will receive
the appropriate level of competency-
based development for their tasks.
19. Total Costs of Logistics: The goal
will be to minimize the total life cycle costs
of logistics, from order submission to prod-
uct delivery, while providing excellence in
customer service.
n There will be a clear understanding
and awareness of the costs of logis-
tics.
n Logistics will be viewed as an area
for considerable performance im-
provement.
n Logistics partnerships will support
both cost reduction and customer ser-
vice improvements.
20. Leadership: There must be a bal-
ance between the control aspects of manage-
ment and harnessing the energy of change to
create peak-to-peak performance of leader-
ship.
n Leaders will understand their roles of
achieving peak-to-peak performance.
n Leaders will establish a culture that
is progressive, participative, vision
based, and encourages growth and
learning.
n Leaders will actively communicate di-
rection and performance and work to
achieve organizational alignment.
5.0 ContinuousImprovement
Continuous improvement is the founda-
tion for successful companies and warehous-
ing excellence. The difference between
continuous change and continuous improve-
ment is that continuous improvement is based
upon a consistent direction of where the firm
is headed. Continuous improvement is the
never-ending process of improving today,
improving tomorrow, improving the next day
Tompkins Associates
Page 9Setting Continuous Improvement Priorities in Warehouse Operations
and so on. Continuous improvement firms do
not believe in implementing programs nor in
optimization. Continuous improvement firms
understand that programs tend to come and
go but the process of continuous improvement
is permanent and never-ending. Continuous
improvement firms understand that today’s
optimal solution is next month’s acceptable
solution, next quarter’s marginal solution and
next year’s obsolete solution. Continuous
improvement warehouses realize that
everyone’s job is to improve the firm’s per-
formance and that leadership must understand
that its greatest asset is the power of the
people. Harnessing the power of the people
and empowering teams to continuously im-
prove the firm is a prerequisite of warehous-
ing excellence. Every sucessful firm will
adopt the process of continuous improvement.
6.0 Culture
Every person has a personality and ev-
ery firm has a culture. In fact, a good defini-
tion of culture is that culture is the personality
of a firm. Your firm has a culture. This cul-
ture has evolved and now must be understood
and often changed. The culture of a firm may
be categorized as:
Type I: Static Consistency
Type II: Dynamic Inconsistency
Type III: Dynamic Consistency
Type I firms resist change. They pride
themselves on maintaining the status quo and
seldom realize there is an opportunity to im-
prove. Type I managers believe:
1. “We have optimized our operations;
there is no room for improvement,”
and/or
2. “We have always been profitable; why
should we change anything?”, and/or
3. “If it ain’t busted, don’t fix it.”
Type I organizations will not only not
win, they will not even survive.
Type II organizations have a culture of
dynamic inconsistency. They realize they are
not successful and are actively installing new
programs. They are busy organizations. Ev-
eryone is on a task force or two, but no one
has a chance to work as the entire day is spent
in meetings. There is no shared direction of
where they are headed. Dynamic Inconsis-
tent firms are pursuing Management By Fad
(MBF).
Table 6.1 presents some of the programs
that have been and continue to be pursued in
Type II firms.
Each person within a Type II firm has
his or her own direction. Although there are
pockets of brilliance, the whole of the firm is
not improving. Managers within Type II or-
ganizations are frustrated; the harder they
work, the more they seem to lose. A Type II
culture is dangerous and will result in a
company’s demise if not replaced with a Type
III culture.
Type III organizations truly understand
the meaning of dynamic consistency. Dynamic
indicates continuous improvement, and con-
sistency indicates a shared understanding of
direction. Firms with a Type III culture are
driven by an “improve, improve, improve”
mentality based upon a consistent direction
Tompkins Associates
Page 10Setting Continuous Improvement Priorities in Warehouse Operations
Activity-Based Accounting
Computer-Aided Order Picking
Computer-Based Information System
Computer Integrated Distribution
Crossdocking
Decision Support System
Direct Store Drops
Distribution Requirement Planning
Efficient Consumer Response
Fluid Logistics
Integrated Logistics
Just-In-Time
Paperless Picking
Paperless Warehouse
Participatory Management
Quick Response
Quality Function Deployment
Reverse Order Picking
Supply Chain Management
Third Party Distribution
Total Quality Management
from leadership. Firms with successful ware-
house operations will have a culture of dy-
namic consistency.
7.0 Model of Success
Successful firms will be characterized by
a dynamic consistent culture. The shared con-
sistent direction of the firm can best be ex-
pressed by a Model of Success. The five
elements of a Model of Success are:
Table 6.1: Our Pursuit of Fads
1. Vision: A description of where you
are headed.
2. Mission: How to accomplish the vi-
sion.
3. Requirements of Success: The be-
liefs that will guide us to accomplish
our mission.
4. Guiding Principles: The values we
practice as we pursue our visions.
5. Evidence of Success: A series of past
tense, single focus statements that de-
scribe measurable results character-
izing the organization when the vision
is being achieved.
The first four elements can be graphically
presented, as shown in Figure 7.1. This bull’s
eye approach can serve as the target of a com-
pany where the Evidence of Success is used
as a yardstick against which progress is mea-
sured.
Figure 7.2 illustrates the process of vi-
sionary pursuit. The prioritized Requirements
of Success are the focus of the continuous im-
provement process, using the Guiding Prin-
ciples and the Mission to advance an
organization towards its Vision. Team-based
continuous improvement can only occur
within the context of a Model of Success.
Firms with successful warehousing op-
erations will have implemented the visionary
pursuit as presented in Figure 7.2. The con-
tinuous improvement process that should be
pursued is as shown in Figure 7.3. The key to
the continuous improvement process in Fig-
ure 7.3 is the fact that it is never-ending. The
application of the Figure 7.3 Continuous Im-
Tompkins Associates
Page 11Setting Continuous Improvement Priorities in Warehouse Operations
provement Process within the context of the
Figure 7.2 Visionary Pursuit results in team-
based continuous improvement.
8.0 Prioritized WarehouseRequirements of Success
As was stated in the last section, Require-
ments of Success are basic beliefs that will
guide a firm to its Mission. We believe the
requirements of success form the science of
warehousing and are the same for all ware-
housing organizations.Figure 7.1: Model of Success
Figure 7.2: Visionary Pursuit
Figure 7.3: Continuous Improvement Process
Tompkins Associates
Page 12Setting Continuous Improvement Priorities in Warehouse Operations
We believe all organizations must em-
brace the 20 Requirements of Success as stated
in section 4.0 in this monograph.
9.0 Path Forward
The next step is for you to compile the
results of the Team-Based Continuous Im-
provement Diagnostic Survey For Warehouse
Operations. The results of the survey will
define your path forward. Respond to the
identified path forward and then, in four
months, use the survey again. Your progress
will be noticeable and you will be on your
way to winning the war. You will have a cul-
ture of continuous improvement and you will
be pursuing the highest priority opportunities.
Tompkins Associates
Page 13Setting Continuous Improvement Priorities in Warehouse Operations
Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations
Each person has a different perspective on the present status of the warehouse and the priori-
ties which must be pursued to bring about improvement. This survey, when combined with the
surveys of others in your company, will allow us to develop a consensus view of your status and
your priorities. The following items are arranged in pairs (“a” and “b”) and each member of the pair
represents a possible description of your present operation. Rate the descriptions by how true they
are for your operation by giving them a score of 0 to 5 (0 meaning absolutely not true and 5 mean-
ing absolutely true). The scores for “a” and “b” of each pair must add up to 5 (i.e., 0 and 5, 1 and 4
or 2 and 3). Do not use fractions such as 2 1/2.
Score Question
1a ______ Receiving, storing, picking and shipping are each performed as separate functions.
1b ______ Receiving, storing, picking, and shipping work as a team.
2a ______ We frequently introduce new programs to improve our competitiveness.
2b ______ We are methodically pursuing the process of continuous improvement.
3a ______ Warehouse employees are cross-trained to handle a wide variety of tasks.
3b ______ Warehouse employees typically handle one function.
4a ______ We use assigned storage locations.
4b ______ We use random storage locations.
5a ______ Management understands the cost of space.
5b ______ Management does not factor in the cost of space in planning.
6a ______ We have a standard auto identification system between our vendors, manufacturers,
and users.
6b ______ We do not have ability to automatically transfer data with other organizations.
7a ______ Housekeeping is not promoted by management.
7b ______ The fact that there is efficiency in order is widely understood.
8a ______ Excessive analysis of alternatives exists within our company.
8b ______ There is a good balance between analysis and visioning pursuit within our company.
Tompkins Associates
Page 14Setting Continuous Improvement Priorities in Warehouse Operations
9a ______ Our warehouse is measured by how well we meet customer expectations.
9b ______ We do not measure customer satisfaction in the warehouse.
10a _____ Warehouse operations are structured to provide the maximum flexibility.
10b _____ Our systems, equipment, and people are not able to meet today’s requirements.
11a _____ Orders are pre-routed and pre-posted.
11b _____ Orders are not efficiently routed.
12a _____ We have not evaluated new picking methods for our orderpicking system.
12b _____ We evaluated and use either zone, batch or wave picking.
13a _____Material handling and storage equipment minimize aisles and maximize cube utilization.
13b _____Our material handling and storage equipment do not support maximum space utilization.
14a _____ Public warehouses are evaluated as viable alternatives.
14b _____ Management does not understand public warehousing values.
15a _____ We do not have real-time information in the warehouse.
15b _____ Automatic identification is our foundation for real-time warehouse control.
16a _____ We have small, decentralized warehouses.
16b _____ We have large, centralized warehouses.
17a _____ Warehousing is considered a necessary evil.
17b _____ Warehousing is viewed as a critical step in material flow.
18a _____ Employees receive training “on the job.”
18b _____ A formal training program exists that addresses general as well as technical needs.
19a _____ My company has always been profitable; there is no need to change.
19b _____ My company is profitable and is always changing.
20a _____ Our warehouse does not have many formal standards.
20b _____ Warehouse management measures space utilization, damage, and inventory accuracy.
Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)
Tompkins Associates
Page 15Setting Continuous Improvement Priorities in Warehouse Operations
Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)
21a _____ We have optimized transportation responsiveness.
21b _____ We are continually improving transportation responsiveness and reliability.
22a _____ We are always busy, but we don’t seem to be improving.
22b _____ We are continually improving.
23a _____ We are not a support activity for our customers.
23b _____ We fulfill all our customer requirements.
24a _____ We are unsure how to react to business and the economy.
24b _____ We know what it will take to be successful in our business.
28b _____ No clear performance standards exist.
29a _____ Inventory accuracy is below 95%.
29b _____ Inventory accuracy is above 95%.
30a _____ We are changing in several directions at once unsuccessfully.
30b _____ We have a clear organizational plan for improvement.
31a _____ We have an established vision and mission.
31b _____ Due to business unpredictability, we have no formal mission.
32a _____ We use cycle counting to manage inventory accuracy.
32b _____ We use annual physical inventories to manage inventory accuracy.
33a _____ Management has a strong desire to control warehousing.
33b _____ Management is less concerned about control, but more concerned with continuous
improvement.
34a _____ Management views warehousing positively because of warehouse performance
reporting.
34b _____ Management is unclear about level of efficiency of warehouse.
35a _____ Management doesn’t see need to utilize automatic identification.
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Page 16Setting Continuous Improvement Priorities in Warehouse Operations
35b _____ Management understands that automatic identification is pre-requisite to modern
warehousing.
36a _____ Warehouse is responsive to special customer packaging, pricing, and label require-
ments.
36b _____ Warehouse can handle only so many “specials.”
37a _____ People at the lowest levels understand the corporate vision.
37b _____ The corporate vision is only understood at the highest levels.
38a _____ Warehouse can not handle any more new assignments.
38b _____Warehouse can handle operations that were once thought manufacturing responsibility.
39a _____ Management has established clear corporate goals, but they are not well understood
or communicated through organization.
39b _____ Management goals are clear and well understood throughout organization and we are
following management’s plan for success.
40a _____ The decision process in our company moves at the proper pace.
40b _____ Decision making at our company is too slow.
41a _____ Warehouse staff feels like we are separate from rest of company.
41b _____ Warehouse staff functions as a team with manufacturing, marketing, transportation,
and rest of company.
42a _____ We have created a layout to best support orderpicking operations.
42b _____ Our layout is a liability in orderpicking.
43a _____ Housekeeping is a portion of our culture.
43b _____ Housekeeping is rarely brought up to employees.
44a _____ Warehouse automation is historically justified based on labor savings.
44b _____ The primary justification for warehouse automation is improved control.
45a _____ We do not have a warehouse control system.
45b _____ We have a warehouse control system.
Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)
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Page 17Setting Continuous Improvement Priorities in Warehouse Operations
46a _____ Inventories are evil.
46b _____ Inventories are the result of how we run our business.
47a _____ Advanced technologies in warehousing are more easily embraced today.
47b _____ We can’t economically justify warehouse automation.
48a _____ We have multiple sources for the majority of vendor-supplied materials.
48b _____ We have reduced the number of vendors.
49a _____ We don’t have reliable information to plan future capacity.
49b _____ Warehouse measurements are used to plan future capacity.
50a _____ We are continually cramped for space.
50b _____ We have continuously improved our space utilization.
51a _____ Communications within our company are very good.
51b _____ Communications in the company are not good.
52a _____ We are looking for ways to work smarter, not harder.
52b _____ The reduction of lead times has created turmoil in the flow of material.
53a _____ We don’t know what our business will be like a year from now.
53b _____ We have a strategic business plan in place.
54a _____ Warehouse personnel have no pride over work area.
54b _____ Quality housekeeping is a source of pride for warehouse personnel.
55a _____ Firefighting happens on a daily basis.
55b _____ Firefighting is an exception, not the norm.
56a _____ Our systems and procedures cause frustration in handling customer desires.
56b _____ Our systems and procedures are designed to accommodate customer requests.
57a _____ Our employees are happy.
57b _____ The relationship between management and workers is stormy.
Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)
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Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)
58a _____ Warehouse changes are slow and not easily accepted.
58b _____ The pace of warehouse changes is expected and accepted.
59a _____ We have too many SKUs.
59b _____ We can handle the proliferation of SKUs now and in the future.
60a _____ We have a general understanding of where we want to go but not measurable goals.
60b _____ We have clearly defined, measurable goals.
61a _____ We are attempting to plan our warehouse control system without much analysis.
61b _____ We are seeking the best qualified resources to plan our system.
62a _____ The level of trust in the company is high.
62b _____ The level of trust in the company is low.
63a _____ We have a totally manual warehouse control system.
63b _____ Our warehouse control system is real-time and paperless.
64a _____ We have checkers to assure quality and accuracy.
64b _____ Checkers have been eliminated in our operations.
65a _____ Nothing ever changes and there is no plan to do so.
65b _____ Change is a part of our culture and is continuous.
66a _____ We believe that if it ain’t broke, don’t fix it.
66b _____ We believe there is always a better way.
67a _____ Warehouse managers fight fires.
67b _____ Warehouse managers really manage their warehouse.
68a _____ Warehouse management and employees are well-trained.
68b _____ Warehouse personnel are viewed as overhead.
69a _____ We make the best use of part-time and temporary work forces.
69b _____ We are not sure how to utilize part-time or temporary employees.
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Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)
70a _____ Absenteeism and turn-over are problems.
70b _____ Absenteeism and turn-over are not problems.
71a _____ We have a warehouse strategic master plan.
71b _____ We do not have a warehouse strategic master plan.
72a _____ Our systems support continuous flow warehouse operations.
72b _____ We are unable to make continuous flow warehousing a reality.
73a _____ Warerhouse has an adversarial relationship with customers.
73b _____ Warehouse and customer ad- versarial relationships have been eliminated.
74a _____ Our vision/mission statement is documented.
74b _____ There is no vision/mission document but everyone knows what our objectives are.
75a _____ We have poor communication channels with our customers.
75b _____ Communication networks support the integration of the customers to the warehouse.
76a _____ Automatic identification is used in data acquisition and transfer.
76b _____ Manual systems are in place for retrieving and transferring data.
77a _____ Shorter product lives have meant more product obsolescence.
77b _____ Shorter product lives have increased the pace and productivity requirements in the
warehouse.
78a _____ A key component of our company’s culture is the learning and development of staff.
78b _____ A key component of our company’s culture is adhering to policies and procedures.
79a _____ Exceptions and deviations occur frequently.
79b _____ Exceptions and deviations occur infrequently and are rectified quickly.
80a _____ We are attempting to implement work teams in our organization.
80b _____ Our company is very “political”.
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Page 20Setting Continuous Improvement Priorities in Warehouse Operations
81a _____ We do not know who our customers are.
81b _____ We know our customers and encourage partnerships.
82a _____ The team concept is well accepted and successful in our company.
82b _____ The team concept does not work well within our company.
83a _____ We have many warehouse locations in our company.
83b _____ We have only a few warehouses.
84a _____ The warehouse is integrated into the whole material flow cycle.
84b _____ The warehouse is where material flow stops.
85a _____ We constantly renegotiate contracts with vendors to drive prices down.
85b _____ We treat our vendors like a member of our team; they are friends.
86a _____ Automation is difficult to justify.
86b _____ Excelling at other requirements of success has made automation easier to justify.
87a _____ Warehouse control system is interactive.
87b _____ Warehouse control system is canned and difficult to use.
88a _____ We do not understand our options in warehouse automation.
88b _____ We understand our options in warehouse automation.
89a _____ Timely actions are taken to overcome any deviations from plan.
89b _____ It is hard to determine in a timely fashion any deviations from plan.
90a _____ Systems support ongoing cycle counting.
90b _____ Systems still support physical inventories.
91a _____ We have recently reviewed our distribution network.
91b _____ Our distribution network has evolved over time.
92a _____ Our facility layout can easily allow expansion.
92b _____ Our facility layout is not easily expanded.
Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)
Tompkins Associates
Page 21Setting Continuous Improvement Priorities in Warehouse Operations
93a _____ Spills are often found on floor.
93b _____ Floor is typically free from spills or trash.
94a _____ Unsatisfactory employees are usually sent to warehousing.
94b _____ Management understands the importance of warehousing to the company.
95a _____ We have standard warehouse training.
95b _____ We use competency based testing in the warehouse.
96a _____ We perceive public warehouses poorly.
96b _____ We believe public warehousing is increasing in sophistication and professionalism.
97a _____ Warehouse is not a team with any other function in the company.
97b _____ Warehouse has developed a team with public warehouse.
98a _____ We do not believe our inventory records are true.
98b _____ We are confident in our inventory records.
Appendix A: Team-Based Continuous ImprovementDiagnostic Surveyfor Warehouse Operations (continued)
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Page 22Setting Continuous Improvement Priorities in Warehouse Operations
A. Dynamic 2b___ 2a___
Consistency 19b___ 19a___
22b___ 22a___
30b___ 30a___
39b___ 39a___
65b___ 65a___
66b___ 66a___
TOTAL A
B. Culture 8b___ 8a___
33b___ 33a___
40a___ 40b___
78a___ 78b___
82a___ 82b___
TOTAL B
C. Organizational 24b___ 24a___
Model 31a___ 31b___
37a___ 37b___
53b___ 53a___
60b___ 60a___
74a___ 74b___
TOTAL C
D. Professionalism 17b___ 17a___
68a___ 68b___
94b___ 94a___
95b___ 95a___
TOTAL D
E. Customer 9a___ 9b___
Awareness 23b___ 23a___
73b___ 73a___
81b___ 81a___
TOTAL E
Appendix B: Team-Based Continuous ImprovementDiagnostic Scoring Sheet
Instructions: Transfer your responses from the survey to the blank spaces below. Be sure to
record “a” and “b” responses for each pair in the right space. Then add scores for each categroy.
F. Measurement 20b___ 20a___
34a___ 34b___
49b___ 49a___
89a___ 89b___
TOTAL F
G. Operations 25b___ 25a___
Planning 55b___ 55a___
67b___ 67a___
71a___ 71b___
TOTAL G
H. Centralization 16b___ 16a___
21b___ 21a___
83b___ 83a___
91a___ 91b___
TOTAL H
I. Public 14a___ 14b___
Warehouses 26a___ 26b___
96b___ 96a___
97b___ 97a___
TOTAL I
J. Pace 52a___ 52b___
58b___ 58a___
72a___ 72b___
77b___ 77a___
TOTAL J
CategoryWorld-ClassWarehousing
Score
TraditionalWarehousing
ScoreCategory
World-ClassWarehousing
Score
TraditionalWarehousing
Score
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Page 23Setting Continuous Improvement Priorities in Warehouse Operations
CategoryWorld-ClassWarehousing
Score
TraditionalWarehousing
ScoreCategory
World-ClassWarehousing
Score
TraditionalWarehousing
Score
K. Variety 36a___ 36b___
38b___ 38a___
56b___ 56a___
59b___ 59a___
TOTAL K
L. Flexibility 3a___ 3b___
10a___ 10b___
69a___ 69b___
92a___ 92b___
TOTAL L
M. Uncertainty 28a___ 28b___
46b___ 46a___
64b___ 64a___
79b___ 79a___
TOTAL M
N. Integration 1b___ 1a___
41b___ 41a___
75b___ 75a___
84a___ 84b___
TOTAL N
O. Inventory 29b___ 29a___
Accuracy 32a___ 32b___
90a___ 90b___
98b___ 98a___
TOTAL O
P. Space 4b___ 4a___
5a___ 5b___
13a___ 13b___
50b___ 50a___
TOTAL P
Q. Housekeeping 7b___ 7a___
43a___ 43b___
54b___ 54a___
93b___ 93a___
TOTAL Q
R. Order Picking 11a___ 11b__
12b___ 12a___
27a___ 27b___
42a___ 42b___
TOTAL R
S. Human 18b___ 18a___
Resources 57a___ 57b___
62a___ 62b___
70b___ 70a___
TOTAL S
T. Team 48b___ 48a___
Players 51a___ 51b___
80a___ 80b___
85b___ 85a___
TOTAL T
U. Automation 44b___ 44a___
47a___ 47b___
86b___ 86a___
88b___ 88a___
TOTAL U
V. Automatic 6a___ 6b___
Identification 15b___ 15a___
35b___ 35a___
76a___ 76b___
TOTAL V
W. Control 45b___ 45a___
Systems 61b___ 61a___
63b___ 63a___
87a___ 87b___
TOTAL W
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Page 24Setting Continuous Improvement Priorities in Warehouse Operations
I. Team-Based Continuous Improve-
ment Acceptance: Record Total Scores for
A, B and C from scoring sheet and total these
scores.
n A World-Class Warehousing Score of
90 would indicate a company which
had totally adopted a culture of con-
tinuous improvement.
n A Traditional Warehousing Score of
90 would indicate a company which
had totally rejected a culture of con-
tinuous improvement.
n A World-Class Warehousing Score
above 70 indicates a progressive cul-
ture.
Appendix C: Team-Based Continuous ImprovementDiagnostic Survey Interpretation Sheet
n A World-Class Warehousing Score
between 50 and 70 indicates a culture
with some good tendencies but in
need of work.
n A World-Class Warehousing Score
between 30 and 50 indicates a nonpro-
gressive culture having a tremendous
opportunity for improvement.
n A World-Class Warehousing Score
below 30 indicates a traditional ware-
housing company in significant
trouble. Immediate change is neces-
sary.
WORLD-CLASSWAREHOUSING
SCORE
TRADITIONALWAREHOUSING
SCORE
TOTAL - A
TOTAL - B
TOTAL - C
Team-BasedContinuous
ImprovementAcceptance
Score
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Page 25Setting Continuous Improvement Priorities in Warehouse Operations
II. Warehousing Priorities: For To-
tals D through W, list each category where the
World-Class Warehousing Total Score is less
than 10 points.
n The three categories in the above table
having the lowest total World-Class
Warehousing Scores should be the
focus of your first three improvement
teams.
n If you have more than three catego-
ries in the above table tied for the low-
est total World-Class Warehousing
Score, list the three categories you feel
should be the focus of your first three
improvement teams.
CATEGORYWORLD-CLASS WAREHOUSING
TOTAL SCORE(Less than 10)
TOMPKINS ASSOCIATES: Supply Chain Excellence
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APPENDIXBackground Information