Tag Archives: Inventory

Interview for Bank of America Article

A couple weeks ago, I did an interview with Robert Lerose, who writes for the Bank of America blog. His article was posted this week, and it has some great advice for small business supply chains.

Check it out here:

Optimizing The Pipeline: Managing your supply chain more efficiently

Bank of America Logo

Are Your Reverse Logistics Leaking Profits?

Reverse Logistics Leaking One of the issues many growing companies face is obsolete inventory and customer returns. These have a nasty habit of sucking up cash and bringing otherwise profitable firms to their knees. In this episode of the Supply Chain Cowboy Podcast, I talk with Curtis Greve to get his expert advice on how best to handle reverse logistics.

Reverse logistics are kind of funny in that they tend to fly under the radar. Returns usually aren’t thought of as one of the most attractive parts of operations. However, improving how you handle obsolete inventory and returns by just a fraction could be the best thing you can do for your bottom line.

You can listen to or download the podcast from the link above, or check out the full transcript. Also, please subscribe to the podcast through iTunes to receive new episodes automatically.

About Curtis Greve

Curtis Greve managed returns for Walmart, ran the 3PL GENCO as its CEO, and started his own consulting firm, Greve-Davis. He’s also one of the founders of the Reverse Logistics & Sustainability Council (RLSC), the premier group on advancing the field of reverse logistics.

RLSC’s upcoming annual conference will be held on January 19-21, 2015, in Dallas. More information on the conference, as well as a wealth of advice and information, is available at ReverseLogistics.com.

7 Simple Ways to Manage Temporary Workers Better

Temporary WorkersWhether it’s a seasonal jump in orders or an unexpectedly large rework project, calling on temporary workers is often the only way to get everything done on time. I refer to temporary employees as one of my three supply chain silver bullets that help me pull off operational miracles. Having managed dozens of projects with workers I just met, I’ve gathered a list of seven ways to make those projects run smoother and quicker. By incorporating the concepts below, your next project with temporary workers will be a better experience for everyone involved.

1.     Start Right with a Clear Orientation Huddle

The first twenty minutes together with your new team sets the tone for the entire day. Use this opportunity to set clear expectations and preempt later distractions and problems by answering common questions.

When temporary workers first arrive, I have them read over a laminated, double-sided sheet. Not only does this protect our company by letting them know of HR policies, but also addresses common issues and questions. The sheet contains a two- or three-sentence summary of our policies on the following topics:

  • About Our Company
  • General Warehouse Safety
  • Forklift Safety
  • Dress Code
  • Time Clock Procedures
  • Breaks and Lunches
  • Bathrooms, Break Area, and Smoking Area
  • Cell Phones and Personal Items (be sure to address cell phones specifically)
  • Substance Abuse Policy (from HR)
  • Harassment Policy (from HR)

After reading over the list, each temporary worker signs an acknowledgement sheet that we keep on file. This protects the company and gives us recourse to send people home that break policies.

After gathering everyone’s signed acknowledgement, I hold a brief huddle. Before going into the days’ work, I emphasize a few key expectations. Specifically, I show them the lockers they can put personal items (or when lacking lockers, ask them to keep everything in their cars). I also point out work and break areas as well as recommend local places for lunch. These few minutes answer 90% of the common questions I encounter, which allows us all to focus on the work at hand.

2.     Set Clear Expectations

Having given a clear orientation, I then strive to set very clear expectations of the day’s work. The key here is many visual examples of the end product and a clear standard procedure to reach that result. For example, if we are trying to build 3000 retail displays that day, then I have several completed examples to show everyone. Each station has a color picture of what the display should look like at that station’s point in the process. I build one or two displays completely with everyone watching to ensure they understand how the display look as it is built and completed.

As much as possible, I strive to make the work mistake-proof. Setting up checks to ensure the display is built correctly helps catch errors. If physical checks aren’t possible, then I ask several people to act as quality lookouts along the assembly line to catch any defects. I empower them with the ability to stop the process and call for help when they see errors. I also let everyone know I’ve asked them to do this job to avoid offense.

Finally, I share with the team hourly and daily production goals. This gives a score to the team’s work and helps them gauge their speed. When I’m building something new and have no experience on what to set the goal as, I just guess optimistically. The team usually rises to meet my estimated goal. Sometimes I even run the process myself ahead of time. This allows me to time how long it takes me to complete a few rounds of the process to set a realistic expectation.

3.     Add Meaning to the Work

Just before they get set to work, I answer the often-unasked question of “why am I doing this?” Even though these workers may just be on the job for a day, I’ve seen impressive results when they know the deeper reason behind their work. My goal becomes theirs as well, and many of the workers will give extra effort and suggestions to better accomplish the larger goal.

The explanation doesn’t need to be long. It could go something like this: “Today we’re building 3000 displays that we’re sending to Walmart. They have to be built this specific way because it helps the Walmart employees quickly put the product out in the store. In a couple weeks, you can visit your local Walmart and find one of the displays you built. Then you can point to that display and tell your friends or children ‘I helped make that.'” As your team is able to focus on the higher goal, not just the menial work that lies ahead, they will rally behind the cause and work hard to produce something they are proud of. Five minutes before lunch or the end of the day, I gather everyone around and solicit their feedback for improvements to the process. Without your team knowing the end goal of their work, helpful feedback is rare.

4.     Create a Positive Work Environment

As the workers begin, I help set the pace and atmosphere by working alongside them. This helps me make sure the project gets off to a good start, but it also helps me learn more about my team. I rotate people to find their strengths and adjust workloads to balance bottlenecks. Once everyone is comfortable in his or her role, I try to ensure enthusiasm remains long after the first hour of work.

If everyone can do a great job while talking together, then those conversations often keep everyone upbeat. However, if they become distracted while talking, then I instead turn on the radio. I always see better results when I try to have a little fun with my team, especially toward the end of the day, than when I am overly strict and serious. Simple rewards for meeting goals, such as cheap popsicles if it’s a hot day, or letting the team take five minutes longer on their break, go a long way toward motivation.

5.     Don’t Make Leadership a Mystery

The biggest problems I’ve had with temporary workers come from not assigning adequate supervision. I am frequently called away from the work, and when I don’t assign someone to be in charge, disagreements often arise. Therefore, if I can’t be there to supervise, I do everything I can to have one of my full-time employees, or at the very least a returning worker, assigned to answer questions that arise. This isn’t to quell power struggles, but to create order in a group of workers who still don’t know each other. Knowing there is a supervisor close who can answer question creates order and prevents most problems.

Having someone you know and trust working on the project also fosters more communication. That person can act as a liaison to the shyer, new employees by giving voice to concerns or suggestions they have. I’ve received some great suggestions for improvement that passed from a new worker, through a returning worker, to me.

6.     Be Detailed in Time Management

Simple Excel Punch Clock

Being exact in timing brings great results. I once used a clipboard to have temporary workers track their time each day. This created some tension because some people would write 8:00, even though they really showed up at 8:07. To avoid this problem, I put together a simple punch clock in Excel – which you can download from the Supply Chain Resources page. Having the computer track the time took away any question of timing – and saved our company a few hundred dollars.

Another time trick I love is something I learned from my high school band director. Whenever we had a concert, she would ask us all to report at 6:53 PM. Such a detailed time was memorable, and many more people showed up on time than had she said 7:00 PM. I use this same concept with breaks. If its 2:03, then I tell everyone, “Ok, it’s break time, we will start the line back up at 2:14 – so be back by 2:13.” This brings much more success than “Be back in 10 minutes.”

7.     Build Your “A” Team

Finally, do all you can to build your temporary worker dream team. If your project spans over many days, only invite back the hard workers – and ask the temp agency to send you others to try out.

If someone is not working, hindering the work, or fostering a negative work environment, don’t be afraid to send him or her home. I’ve only had to do this on rare occasions because talking to the person often resolves the issues. However, if someone is causing a safety risk or HR issue, send that person home as soon as you can. Failure to do so not only invites the issue to grow, and other workers may mirror that behavior since it’s bringing no consequence.

For the most part, however, your team will likely be full of good, hard workers. Pay attention to the best and consider bringing them on full-time. We have found some of our very best employees through temporary assignments. It’s our vehicle of choice to add a new team member in our warehouse because we can try them out for an extended period before investing completely in them.

These seven simple tips have helped me better manage the projects I’ve run with temporary workers. Investing some time and effort into the process will result in more efficient workers and better results. These projects, although sometimes stressful, can become positive experiences for everyone involved.

What other suggestions do you have for managing temporary workers? Please leave your thoughts in a comment.

New Business and Lean Quotes Page Added

Lean and Business Quotes

I’m excited to announce that Supply Chain Cowboy now has a page devoted to business and lean quotes. I’ve gathered over 60 of my favorite business and lean quotes and added my own thoughts to many of them. They’re currently grouped into seven categories:

Here’s a sampling, five of my favorites:

“Continuous improvement is not about the things you do well ‐ that’s work. Continuous improvement is about removing the things that get in the way of your work. The headaches, the things that slow you down, that’s what continuous improvement is all about.”

– Bruce Hamilton

“A chess novice can defeat a master if moving twice each round.”

– M. Goldenson, Ten Lessons from a Failed Startup, in VentureBeat. 2009. Quoted in Nail It then Scale It, p. 96

“Small wins are a steady application of a small advantage.”

― Charles Duhigg, The Power of Habit: Why We Do What We Do in Life and Business

“A ship in port is safe – but that is not what ships are built for.”

‐ Rear Admiral Grace Hopper

“As long as I listen to my customers, I never need to have another original idea.”

– Niel Robertson, founder of Trada, in Do More Faster

I’ll add to the page regularly, so be sure to check back for updates. Also – if you have a quote that means a lot to you, add it in an email or shoot me a message on the contact us link.

Supply Chain Cowboy Business and Lean Quotes Page

10 Tips to Make Physical Inventory Counts Less Painful and More Accurate

Warehouse Physical Inventory Count

Given the option of getting a voluntary root canal instead of physically counting inventory, many of you would likely being calling your dentist right now. Certainly, physical inventory can be a painful process, especially for the many small businesses doing their best just to get orders out the door. However, accurate inventory can help reduce a long list of problems with which many small businesses are familiar:

  • Wasting time looking for items
  • Holding extra inventory as a safety stock against inaccurate numbers
  • Avoiding orders for older items because you’re not sure you still have what your system says you do
  • Expediting reorders because you suddenly can’t find any more of the product

Below are ten tips that will make physical inventory counting much smoother, so you can quickly get back to helping your company make money.

1 – Make Inventory Accuracy a Higher Priority than Order Fulfillment

Raising the priority of accurate inventory is perhaps the most important, yet most difficult, step in inventory accuracy. Many inventory problems arise from pushing a transaction through the system with the intent of going back and fixing the numbers later. In the rush of other emergencies, however, we often forget to go back and correct the numbers in the system. This leads to missed production entries, negative lines of inventory, and a whole mess of other problems. Only by putting systems in place that will prevent an employee from moving forward without the necessary system transaction can you effectively keep accurate records of inventory.

One example of success that my team recently implemented was changing our accounting system so that it will not process any shipment that contains more inventory than we have on hand. For example, if we’re trying to ship 15 of an item, but our system says we only have 5 in stock, then an alert will pop up and force us to fix the problem before moving forward. This helps us address problems before the product goes out the door. By forcing us to address missed production entries before the product leaves, our modified system helped us eliminate most of our major inventory issues.

2 – Put Everything in a Marked Location

When the time comes to count inventory, having everything in a marked location is a necessity. Those loose boxes and stray pallets without a home are often the problems that come back to haunt you while you try to reconcile. Even if you must make new, temporary locations for the duration of the count, put everything in a well-marked and defined place, and leave it there.

3 – Reduce Inventory as Much as Possible

Do all you can to count as little inventory as possible. Whether it’s holding up an inbound shipment a couple days, or shipping extra in the days prior to the count, counting less means fewer chances for mistakes. You’ll also want to be sure to not receive or ship any product during the count, since this can easily cause discrepancies.

4 – Count Overstock Locations Beforehand

Even before the count has started, counting the overstock locations beforehand can mean much less counting on the days that inventory is frozen. Fully stocking the picking locations first, then wrapping and marking the count of overstock location can drastically reduce the stress on count day. However, be sure that if inventory is taken from the overstock location, the count tag is either removed or adjusted to the lower quantity.

5 – Be Visual with Counts

With so many people counting, keeping track of what has and has not been counted can often be difficult. To avoid confusion, be extra generous with visual labels and controls. Large count tags, bright colors, and unmistakably clear signs can save you hours of confusion later on. Especially if you are bringing in employees or temps unfamiliar with your product, erring on the side of too big and obvious can be well worth the expense. If something is not in inventory, mark it so even those with the poorest of eyesight can easily understand to not count the product.

6 – Have Someone Familiar with the Product on Every Count Team

Another problem that I often encounter is the unit of measure of items to count. Is an assortment of 24 items in inventory as 1 pack or 24 eaches? While box markings can help, nothing replaces an experienced team member. If you bring in additional people to help count, be sure to include someone who knows the products well on each team. Partnerships with one experienced person and one new work well.

7 – Be Quick and Creative with Immaterial Counts

Weighing Immaterial Items

Some small items aren’t worth the effort to count individually. Whether its tiny plastic bags, plastic hooks, tons of grain, or gallons of chemicals, physically counting out the amount is often not worth the value of the product. For large quantities of small items, a sensitive scale is the best method. Weighing out a sample and then calculating piece count from the total weight is accurate enough for an inexpensive component. For large quantities that are difficult to weigh, calculating volume by lead lines and extrapolating is preferable to simply guessing.

8 – Audit Counts Right After the Count Starts

Auditing counts are essential to ensure each team is counting the products correctly. However, if you wait until all the counting is done, you can’t do much but go back and recount whatever that team counted. Instead, auditing counts from each team soon after they start gives you an opportunity to correct any problems and train more to avoid future miscounts.

9 – Discipline Yourself to Regular Cycle Counts

As your to-do list grows, taking time to cycle count is likely to slip to the very bottom of your priorities. However, installing incentives and consequences to ensure regular cycle counts happen will not only reduce the pain of a complete physical count, but also give you more confidence in your system’s numbers throughout the year. Whether you schedule your cycle counts based on ABC analysis, items likely to have problems, or some other method suited to your business, rotating through items helps catch inventory issues before they become larger problems.

10 – Review Problems and Change

Finally, after you’ve recorded your last counts and everything is reconciled in your system, take a few minutes to reflect. Gather the team together and review what problems you encountered. What went well? What caused problems? Most importantly, what can you put in place to avoid these same problems in the future? Each small change you put in place today can save your team headaches in the future.

What other tips do you have for making physical inventory counts smooth and painless? Share your comment below, and be sure to subscribe to receive our future articles.