Tag Archives: 5 Whys

Strategies to Fulfill Customer-specific Labeling and Packaging Requirements

Similar to each child in a family, each customer your business ships to has different needs. Specific labeling requirements help move your product efficiently through your customers’ supply chains and into consumers’ hands. Failure to follow requirements often results in a fine, chargeback, or deduction. Of course, you want to fulfill each customer’s requirements perfectly, but those requirements have an unfortunate tendency to be different. This article explores four different systems of fulfilling customer labeling and packaging requirements.

Level 1 – Rely on People and Memory

This is the weakest system, but often where most small businesses start with a new customer. A manager or supervisor will read the customer’s routing guide or vendor manual. He or she will make note of items to remember, such as pallet height requirements, labeling requirements, preferred carriers, etc. Then, that person will help ship the first few orders, remind the team that Walgreen’s pallet height limit is 60 inches, or that CVS needs the customer specific item number added to the package. With a good team and little turnover, this usually works for a while. However, eventually an exception arises, or things get busy, and the team makes a mistake or forgets a detail. The team then often gets blamed for the mistake, even though they have simply been victims of a poor system. Relying on people instead of processes is often unfair – and problems can be avoided by simply creating a better process.

Level 2 –Create a Requirements Checklist

For most customers, creating a checklist of requirements is enough to avoid problems. It gives a quick, consistent reminder of what the shipper needs to do for the customer. It also creates a level of accountability if you have the shipper sign off on the order. Signing a name to an order certainly makes one realize the importance of accountability, and the employee is more likely to ask how to fulfill each line of the checklist if he or she doesn’t  already know how.

The checklist may look something similar to the section below:

  • Customer PO# Appears on Master Carton Label and Packing Slip
  • Carton Count on Packing Slip
  • Lead Carton Marked with Bright Color Sticker
  • Stacked on Grade A Pallet without Any Defects or Spills
  • Shipped via Preferred Carrier (YRC, UPS Freight, Old Dominion)

Shipped by (sign) ______________________

If you can get these checklists to print on the pick sheets, then you’ll never need to worry about whether the order included one or not. If that is not possible, then manually stapling a checklist to each pick sheet may be an effective, although cumbersome, solution. However, the money saved in chargebacks and deductions will quickly make up for the increased order preparation time.

Level 3 – Two-Person Password Authentication

Some customer requirements are especially difficult to follow and especially expensive to mess up on. For example, forgetting a label can easily create a chargeback of $300 for some customers, a fine several times higher than the order value. For these types of customers, you want at least two people to carefully scrutinize each order. A two-person checklist is effective, but in the rush of emergencies, sometimes those checklists are ignored. For example, how many bathroom cleaning signoffs have you seen at restaurants or stores that haven’t been filled out for several days, or longer? When analyzing the problem with the 5 Why’s technique, the result may be something similar to the chain below:

Problem: We were fined by customer X

Why? Five Cartons were missing a specific label

Why? We shipped them without the labels

Why? We did not follow our checklist

Why? Because nothing stopped us if we didn’t follow the checklist (and we haven’t had a problem in months)

Why? We have no checkpoint in place in our system to ensure the checklist is followed

Solution: Create a checkpoint, or tollgate, in which we ensure the checklist is complete

Two-person Signoff Screen

 

Just like action movies in which two people must turn their key simultaneously to launch a missile, you can have two people enter a username and password verifying that they completed the checklist. When shipping an order in your system, a screen could pop up asking two people to log in and acknowledge in the system that the order meets all customer requirements. While this may feel a bit stringent, it creates shared responsibility and can help ensure that procedures are followed even in the most hectic of times.

Level 4 – Complete System Automation

The ideal is to have all customer labeling and packaging requirements automatically done by your system. Complete automation is the dream of any shipping manager, and is close to what most large distribution centers do. However, the high cost and frequent need for customization often keeps this option out of the reach of small businesses. Obviously, the more you can automate, the less human errors you’ll see – which means a decrease in fines and deductions. Creating customer specific labeling is usually the first step in automation, especially as requirements for Advance Ship Notices (ASNs) become more common. Work with your team to identify the most repeated or expensive mistakes and focus your automation efforts on reducing those first.

As you grow, you’ll eventually reach a point in which you can confidently watch truck after truck leave your docks knowing with 99.9% certainty that you won’t see any chargebacks of fines because your system helps your team perform flawlessly.

What thoughts and experiences do you have? What are some problems have you repeatedly run into? Share your comment below, and don’t forget to subscribe to future articles.

Problems are Gold to be Treasured

Lean Quote Roundup

In his excellent book The Remedy, Pascal Dennis gives this beneficial advice on improvement:

“Problems are gold to be treasured, not garbage to be buried. Problems are the process talking to us, telling us where our management system is weakest. We need to use our stethoscopes to probe deeper, get to the root cause, and fix it. It we tune out problems, we’re lost.”

I love the mental image this quote produces. Treasuring problems is completely unnatural in most organizations. Problems in a business are like weaknesses in a sports team. A sports team’s fans don’t want to admit the team has any faults, but unless the team’s coach recognizes and addresses the weaknesses, they’ll never win the championship. Certainly, we all want to see our companies win, but we must be coaches, not just fans, to help them improve.

Problems are Gold to be Treasured

A healthy exercise to begin treasuring problems, and finding solutions, is a problem brainstorm. Gather your team around and spend 20 minutes listing all the problems and emergencies you have experienced in the last month. I like to use post-it notes for every idea so I can easily rearrange them, but a whiteboard also works well. Once you have a thorough list of problems, begin organizing them into main categories. “We ran out on item Z”, “we have way too much of item Y”, and “we had to expedite inbound shipments of item X” may all be grouped together into one category of “Inventory Management Problems,” or they may represent three different categories based on your circumstances. Usually, 80% of the issues fall into just a few categories, while the remaining 20% are outlying concerns.

The next step is to begin analyzing the common root cause of the problems in each category. I recommend the 5 Whys technique to dig deep into the problem’s origin. This will probably extend beyond the initial brainstorm meeting. A good analysis often takes an uncomfortable amount of honest thought and analysis. Often the instinct of self-defense drives us to hide problems. Focusing on solutions rather than blame can help break down obstacles hiding true problems.

The concept of listening to problems as the key to improvement has many other applications outside of business. Rather than ignoring problems with ourselves or relationships with others, we can instead use a stethoscope and learn the real reason for the trouble. Ignoring problems rarely leads to real and meaningful solutions. However, the reward for investing the effort to learn and enact appropriate solutions highlights the value of problems.

What are your thoughts? Add your comment below or subscribe to future posts.

The Three-year-old Why Technique

Giant problems often appear to need giant solutions. However, honest analysis and investigation usually points to something small that nobody thought of. This small oversight upstream often results in the fire downstream. For example, thousands of products can have an incorrect barcode because the packaging designer didn’t have a good proofreading process. While the giant solution of relabeling all the products may be needed to fix the immediate problem, a two-minute process upstream could avoid future problems. To find the root cause of an emergency, I often use the 5 Whys technique, which helps get down to the bottom of what caused the current problem by asking “why?” repeatedly. However, I think most companies need another technique to catch problems before they turn into emergencies. I call this method the Three-year-old Why Technique.

Profound Questions by Three-Year-Olds

Girl Asking "Why?"

Whenever I talk with a child age three to five, I usually hear several “Why?” questions. From reading a couple online articles about the subject, I’ve learned that this behavior is most likely children’s method of both learning and capturing attention. However, the part of this behavior that always surprises me is the profound questions that children stumble upon simply by questioning everything. “Why do I have to sleep?” “Why can’t we eat grass?” “Why do we eat with forks?” These questions likely helped neuroscientists, biologists, and anthropologists earn tenure by publishing deep scientific responses. These questions also leave me with a much different question of myself: Why don’t I still ask ‘why?’ question? Most likely, my sense of wonder and curiosity has taken a back seat to the demands of meetings, action items, and everyday operations. Yet, when I am able to take a few minutes to ask, I usually stumble upon an opportunity to improve.

Relearning to Ask Why

One time that many of us ask a great deal of questions is when we start a new job. Trying to learn the duties of a new position is stressful, but the questions I ask often highlight opportunities for the department to improve. Each ‘why?’ question gives my manager an opportunity to reflect on the answer and validate the reasoning. Without fail, I eventually receive an answer that I love to hear: “I’m not sure why. That’s just the way we’ve always done it.” To a process engineer, this is the low hanging fruit to improve the company. But how do we find those golden answers? In order to find improvement opportunities before problems erupt, you must ask questions without a reason to ask. This is hard, especially with a long To-Do list of urgent initiatives. Perhaps stepping back every hour or two and asking, “why am I doing this?” is the easiest way to get started. Eventually, it will become a habit of questioning processes and decisions. As many parents of three-year-olds will warn, the key is to always be optimistic and never become annoying.

The Goal Answer

The goal of your questions should be a response such as “I don’t know. That’s just the way we’ve always done it” or something similar. Alternatively, there may be a logical answer, but the circumstances have changed. For example, “Why do we use this supplier?” “Because when our company started four years ago, they were our neighbors and were willing to give us great credit terms.” Loyalty is important, but if your company has moved across the country and you need better prices, it’s probably worth some analysis.

Examples

The following is a table of questions I’ve asked before that may help you start thinking.

Question

Possible Improvements if Answer Unknown

Why do we use this specific supplier? Opportunity to save money, improve service, or improve quality
Why is our warehouse organized this way? Opportunity to improve efficiency or capacity
Why do we track this data on a spreadsheet and not in our database? Opportunity to improve information sharing
Why do we have our garbage picked up (or another service) so often? Opportunity to save money
Why don’t we look at this data when we make decisions? Opportunity to increase customer service, efficiency, or quality
Why is everyone in this meeting? Opportunity to maximize people’s time

Final Thoughts

Now, I do not recommend just questioning everything all day. Too many questions can sometimes hinder us from moving forward. I certainly don’t advocate questions to stir up commotion. Rather, I believe questions are an underutilized tool in a quest for solutions. Start asking a few unprovoked questions and see where they lead. Reach for quick wins with the limited time you have. The most rewarding questions fireproof processes so they’ll never erupt into emergencies, which will give you more time to improve your processes. If you find you just don’t have time to ask “why”, perhaps you can consider adding a three-year-old to your staff.

What are your thoughts? Why not add your comment below, or subscribe to future posts through our feed?

Image: © Vladacanon | Stock Free Images & Dreamstime Stock Photos