A recent issue of Distribution Center Management – a US-based publication for distribution-industry professionals worldwide – featured an interview with Mike Honious, Vice President of Customer Solutions and Implementation at OHL, a third-party logistics provider, also based in the US.
Honious shared with readers how his team helped OHL make sizeable savings in a down economy. Changes included moving time clocks closer to work areas, rewarding productive employees with an early-bird programme, implementing preferred-method checklists, and using multi-purpose equipment.
According to OHL, these small improvements have led to substantial annual savings, less overtime and greater efficiency.
"In the economy today, you can’t go after that really big project that’s going to take forever to implement," says Honious. "Management wants things they can do fast. Everyone wants to save money today."
One example of a recent money-saving innovation concerns a company distribution centre in Indiana, which had many irregular-sized transport pallets. The racks at the centre were only able to accommodate standard-sized pallets, a situation that amounted to more than 21,000 square feet of lost space and over USD100,000 in lost revenue. By reconfiguring the rack space to accommodate the irregular pallets, the centre recovered 19,000 square feet of customer-storage space and began optimising revenue.
For distribution companies operating in recessionary times, it’s over such finer economies that the battle of profitability can be won or lost.