It’s a mystery worthy of a logistics-minded Sherlock Holmes: Why don’t distribution executives want their warehouses to get better?

By John R. Brandt, CEO, The MPI Group

It’s a mystery worthy of a logistics-minded Sherlock Holmes: Why don’t distribution executives want their warehouses to get better?

Here’s the conundrum: Even though the 2017 MPI Distribution & Logistics Study finds that 85% of distributors expect their volume of shipments to increase in the next 12 months (31% expect increases of more than 10%),[1] they still lag in the adoption of best practices common in other industries.

A few clues as to how badly they trail other industries:

  • Just 20% of warehouse facilities train their workers at a world-class level (i.e., more than 40 hours per year). Over half (51%) train 20 hours or less per year.
  • Only one common operational best practice is used by a majority of warehouse facilities (continuous improvement program). ALL the rest are used by less than half of all facilities, including lean thinking (41%), benchmarking (35%), and a three-year planning process (26%).
  • A scant 31% have a significant or full application of IoT technologies within their facilities. A majority of manufacturers, by comparison, actually increased profitability via the IoT in the last year.

These curious facts suggest three related questions for distribution and logistics executives as they expect a banner year:

  1. Don’t you want smarter, more engaged employees? (Hint: Train more).
  2. Don’t you want your facility to become more efficient? (Hint: Add some best practices. There’s a reason other industries use them).
  3. Don’t you want to make more money, and prepare for a digital future? (Hint: If you don’t, you’re going to be left behind).

Improving performance isn’t a mystery. Benchmark other industries. Copy their best practices. Repeat.

It’s elementary, my dear Watson.

 

[1] All data from 2017 MPI Distribution & Logistics Study and 2017 MPI Internet of Things Study.