Planning, building, and running a new distribution center takes a lot of thought, continuous investment, and hard work. Around here, we love new DCs because they bring with them a ton of promise and potential for the growth of businesses. When set up strategically and run efficiently, these new centers bring in huge ROI.
So if you have a new DC, how is your operation coming along?
Last year, we released a resource outlining all of the important aspects to plan for and keep an eye on in year one. Now, we’re excited to announce that we are releasing a follow-up resource that outlines initiatives for year two so you can maintain your success while growing momentum even more. Year one is important, but if year two isn’t pursued with the same dedicated focus that you had in year one, the long-term success of your DC could be at risk.
In our experience, the successful startup of a new DC will hit 70% of design expectations during the first year, then 90% during year two, and finally, 100% by year three. Even if year one didn’t quite perform how you’d hoped it would, that’s okay. Part of driving your operation toward success is having reasonable expectations for how it will perform. Now’s the time to take stock, see how close you got to that 70% mark and start planning for year two so you can hit that 90% mark.
And we’re here to help. In our new resource, Continuing Success in a New Distribution Center: Year Two, we’re outlining a few of the key initiatives that you need to get up and running in order to hit that goal of 90% performance in your second year. Take a sneak peek at the initiatives below to see if this resource could be of value to you and your DC.
1. Unfinished Business from Year 1
Did your DC miss any of the initiatives from year one? In the first section of the eBook, we’ll outline all the initiatives that you should have met in year one and offer some advice on how you can make up for lost time in year two.
2. Post-Mortem of Year 1
The next step is to do a little evaluation. In this section, we’ll walk you through ways to consider what aspects of the new DC work well and which ones don’t. By following our list of evaluation questions, you’ll be able to identify where changes need to be made to existing initiatives before moving on to developing new ones.
3. Developing Your Direct Labor Workforce
Depending on whether your new DC is co-located with other facilities in your supply chain, you may have been able to migrate experienced folks from other locations to staff the new DC. If not, year two is an important time to develop and solidify your direct labor workforce. In this section, we’ll outline a few strategies you can use to get this off the ground.
4. Waving and Flow Optimization
One of the key aspects that sets apart a great DC from average ones is constant evaluation and analysis to identify opportunities for improvement. In this section, we’ll help you think through your waving and flow optimization to make sure you’re getting top performance.
5. Inventory and Shipping Accuracy
How accurate are your inventory and shipping processes? It’s easy to assume that automated solutions like a unit sortation system or an ASRS will provide perfect accuracy, but it’s possible to have errors, even in automation. This section of the eBook will help you identify potential errors while providing some recommendations on how you can prevent them.
6. Product Slotting
Teams often don’t have the luxury of being able to slot items in optimal picking locations during year one with the pressure to simply get the product in the door and put away quickly. In this initiative, we’ll show you how to make the most of year two by optimizing these practices and setting up a system that slots for efficiency.
7. Staff Planning
You don’t need us to tell you that the largest annual cost in most high-volume, high-SKU, high-service DCs is direct labor. In the final section of the eBook, we’ll show you how to manage your staff efficiently and effectively to keep these costs down and your ROI high.