�Close the door and have a seat, Jon,� the boss said. Jon felt his face grow hot and was surprised that his shirt was soaking wet with sweat. This was a new job, a great company and an exciting time. However, he�d only been on the job a few months and now sensed the boss was not pleased with his performance.
�Jon, in our business, we make a promise to our customers. A promise which declares that, if they place their orders by 3 PM, we�ll get the packages shipped that day. Your department is not fulfilling our promise,� the boss said in a controlled voice. �Over the past several weeks, I have received numerous customer complaints. Do you realize the impact this has on our business?�
�I�m doing the best I can,� Jon replied defensively. �The volume of orders has increased, and we just can�t seem to get all the packages processed before the carrier comes to pick them up.�
�Jon, this is affecting our reputation and creating a negative impact on our customers. Our competition can get them out the same day and if we don�t, we will lose business.� The boss� voice was increasing in volume. �You have to turn this around, and you have to turn it around now! I don�t know what the problem is, but I suggest that you speak with Doc Erminda. He is a consultant that we have on retainer that has helped us with problems in shipping before.� Jon replied, �Yes sir. I will right away.�
Jon knew who Doc Erminda was; he had been a student of Dr. Alan Erminda, a professor at the University and the author of several books on shipping. Affectionately called Doc, Dr. Erminda was recognized as the expert in the shipping industry. Jon was lucky that Doc could meet him that afternoon but still felt embarrassed to be asking his old professor for help. After reintro-ducing himself and bringing Doc up to speed on his career since college, Jon began to articulate the problem. �The boss is really on my case to get all the orders out the same day. We�re working hard. We don�t even take a break after 3 PM,� Jon complained. �I�ve asked everyone to work faster, but it�s not good enough. Tempers are short and nobody in my warehouse even wants overtime because the pressure is so intense. If I don�t find some ways to reduce this bottleneck, the boss said he will find someone who will. Can you help me Doc?�
�Jon, I would be glad to work with your firm again. I am particularly happy to work with one of my former students,� Doc replied in a friendly voice. �May I ask you a few questions so that I can better understand your situation?�
�Ask away,� Jon stammered.
The Conversation
Doc paused for what seemed like an eternity to Jon. �I understand that the main problem is that you are not getting all of your packages shipped out in time. Why do you think that is?�
Jon looked like he was thinking hard � his face scrunched up and his eyes were gazing at the ceiling. �I think it�s because the company is growing and the workload has increased by 10%. One of my team members says that it goes up this time every year due to seasonality, but I�ve looked at last year�s records and this year it is even higher.�
�I see, �Doc said. �What percentage of your packages is not getting out?�
�It�s not that bad. We get 80% to 90% out the door! I don�t understand why the boss is making such a big deal out of this.� Jon�s frustration was beginning to reveal itself.
Doc sensed that Jon did not understand the severity of the problem. �Let me ask you something,� Doc continued. �What effect do you think it has when a customer does not get his order when it was promised?�
Jon frowned. �The boss said that it is negatively affecting our reputation and that we could lose business,� Jon answered. �But I just don�t understand why we can�t tell customers that the cut-off time is an hour earlier.�
�If you were a customer and you could get your order shipped if you ordered by 3 PM at your competitor and at your company the cut-off was 2 PM, all other things being equal, which shipper would you choose?�
�Okay, I get the point.� Jon said.
�What happens to the packages that don�t make the cut-off?�
�The next day, we look at where they are going, and if it is far, like a Zone 8, we upgrade the service level so it can still get there on time.�
Doc wanted to drive home the point. �How do you think that affects profitability?�
�Negatively!� Jon was seeing the implications of the problem.
�What have you done so far to try and reduce this bottleneck?� Doc asked.
�I�ve asked everyone to work as fast as they can, cut out any breaks after 3 PM and I ride them to make sure that no one is slacking.�
�And, how�s that working for you?�
�I had a guy quit last week and attitudes stink.�
�So if you keep that up, what impact will that have on turnover?�
�Yeah, I know; it will get worse.�
�And, if you have to bring in new people or temps, what will happen to your productivity?�
�It will be horrible; I�m getting depressed.� Jon answered.
�I�m wondering; if everyone is rushing to get the packages out the door and the stress has people in a funk; has quality been impacted?�
�Doc, you�re killing me here. How did you know? Mistakes are double what they were.�
Doc paused and spoke slowly. �So let me see if I can sum-marize; your shipping bottleneck is creating upset customers, putting your company in a noncompetitive situation and possibly causing lost sales. Your department has increased expenses from expedited shipping, double the mistakes, more turnover, overtime costs, and morale in the shipping department stinks. Is that right?�
Jon thought, no wonder the boss is so upset. �I�ve got to do something, can you help us?� Doc�s smile broke the heavy mood. �I think so. What if you could get your carrier to pick up at a later time?�
�I tried that already, but they say this is the latest they can come.�
�Have you talked to any other carriers?
�No, why?�
�Because pickup times are negotiable and sometimes when a carrier realizes they may lose some business, they become more resourceful. A new carrier that is anxious to get your business may make arrangements to service your need. Would it help if you could use the second carrier to ship all the packages that didn�t make the first carrier�s cutoff time?�
�It sure would!� Jon was feeling some relief. �It could reduce my expedited costs. That�s a great idea Doc � thanks!�
�Let�s brainstorm a little. Do you know, in advance, of pack-ages that need to be shipped out in the future?�
�On some jobs we do.�
�What if you packed and labeled those boxes ahead of time, when you�re not under the gun?�
�I thought the carrier labels had a date on them and had to be processed the same day.�
�It�s true that they have a date, but most shipping systems have a function called Future Ship, which allows you to process shipments ahead of time with a specific date; could that be useful for reducing your bottleneck?�
�Wow! That could help.� Jon thought about it for a few seconds. �But what if we don�t know the actual date these packages are going to ship?�
�There is another function, called Pack and Hold, which lets you process the packages ahead of time. It captures the address information and the weights; then it produces a barcoded label that you put on the boxes. When you are ready to ship, you simply scan the barcodes and relabel them; you save the time of having to weigh each piece and pull the addresses.�
Jon took out his notebook and pen and began to write.
Ideas on How to Reduce Bottlenecks
1. Negotiate with our carrier for a later pickup.
2. Get a second carrier to pick up later than the first one.
3. Prepare known orders ahead of time.
4. Find out how to use Future Ship or Pack and Hold features in our software.
�Thanks Doc... I really appreciate your help.�
This was an excerpt from Taylor�s upcoming novel, The Shipping Manager. Stay tuned in the next issue for more about bottlenecks.
Mark Taylor is the CEO of TAYLOR Systems Engineering Corporation. He is the author of two books; his latest is �Compu-terized Shipping Systems: Increasing Profit & Productivity through Technology.� Mark can be reached at 734-420-7447 or mtaylor@TAYLORSystemsEngineering.com.
