Special AWMA Sessions at 2010 Distribution Solutions Conference

The 2010 Distribution Solutions Conference opened Monday in Tampa, FL with a healthy contingent of AWMA distributors attending, hoping to take home new ideas and information that will help them improve their warehouse and transportation operations.

“I’ve seen a lot here that I would like to be able to utilize at our company,” said Chris Smythers, Merchants Grocery Company, Inc., Culpeper,VA, as he walked the trade show floor with AWMA President & CEO Scott Ramminger.

Chris Smythers (L) with AWMA's Scott Ramminger on the show floor.

“It’s been good information, and I’ve seen a lot on the trade show floor that could definitely be helpful,” said Jon Burklund, Burklund Distributors, Inc., East Peoria, IL, AWMA's 2010 Chairman.

The show featured a wide variety of warehouse operations equipment, trucks, trailers, security systems, technology solutions and more. It was cosponsored by AWMA with the International Foodservice Distributors Association (IFDA).

Vendor Performance Reviews
On Monday, the first of four special sessions sponsored by AWMA featured a discussion by Randy Emanuelson, vice president, operations & finance, at the Sledd Company, who shared details of a system designed to evaluate vendor performance and determine which vendors are profitable and which ones are not.

“We are all looking for incremental ways to make our businesses perform better,” said Emanuelson. So, his company embarked on a mission to determine which vendors were good partners and which were not, based on criteria that carefully analyzes profitability based on financial results and other major factors involved in the vendor relationship.

A detailed Vendor Evaluation Worksheet was shared with attendees, providing grading opportunities on such attributes as order accuracy, on-time delivery, vendor initiated programs, category leadership, industry business leadership, marketplace knowledge, professionalism, shortages/damaged goods, and many more.

Each major department at Sledd Company is involved in the ratings, which ultimately allow management to make decisions about each vendor according to their rating, which is identified by color – green for good, yellow for “OK”, and red for poor.

“This information is actionable,” Emanuelson said. “We use this on an ongoing basis. It is a very powerful process. You find yourself doing everything you can for the green vendors because they are paying their bills and are good partners to work with, but you will not spend the same time on the red vendors on which you might be losing money.”

In fact, he said, the system allows the company to identify vendors that need help improving and those that do not could face delisting, if all efforts to remedy problem situations fail. Thus, Emanuelson said, Sledd has begun sharing its rating results with their vendors to let them know where they stand.

He encouraged other distributors to adopt similar initiatives. “The more convenience distributors do this, the greater the likelihood that vendors will get consistent messages and improve their performance. It is about the weight of public opinion,” he said.

Back to Basics - Warehousing Rules that C-Store Distributors New to Follow
Distributors were urged Tuesday by a top expert on warehouse operations to follow some basic steps in their effort to maximize the efficiency of their distribution centers.

Tom Williams, CEO, Thomas M. Williams and Associates, Inc., told attendees that available space in most convenience distribution facilities is significantly under-utilized, and challenged them to analyze their practices to make maximum use of their facilities and investment.

He advised distributors to determine the size of each slot to determine which products should be placed where and to set up orders in logical sequence for picking. He outlined specific steps for order selection and receiving, emphasizing the importance of making sure the proper amount of labor is available for each day’s picking according to product category.

Williams stressed that distributors should carefully schedule inbound loads and stick to that itinerary, making sure to schedule receiving work hours separate from picking work hours. He advised them to charge lumping fees for unloading outside trucks, as well.

“Is the cube movement and slot size compatible?” he asked. “Do you slot by product type, weight and crushability? Is heavier product slotted before light weight product?”

Williams urged distributors to consider using technology-based warehouse management systems (WMS), and said distributors should use either scanning or voice pick systems tied into the WMS if they hope to be as efficient as possible.

Finally, Williams said periodic sales forecasts should be converted to predict labor needs in the warehouse.

“Forecasting your needs is one of the key processes to be sure that you have the right employees in the right place at the right time,” he said.

CSA 2010 – Impact of Delivery Fleets
New federal regulations designed to improve highway truck safety take effect November 30, and distributors were urged Tuesday to act now to be prepared.

The rules, called Compliance Safety Accountability (CSA), focus on fleet behavior and expands fleet responsibility for actions by drivers. “Enforcement is not changing on the road,” explained Mark Weaver, safety consultant at J.J. Keller & Associates, Inc. “The difference is the data and how it is used.”

Weaver presented a detailed analysis of how CSA 2010 will be implemented, and urged distributors to visit the government’s website, http://csa2010.fmcsa.dot.gov/, to determine its accuracy. The site also details the new system and how it will be used.

He cautioned that information about a company’s truck transportation safety record under the new system can be used by possible customers as part of their selection process as well as by the insurance industry and even attorneys in the event someone is injured in an accident involving a company vehicle.

“If you haven’t updated your information, do so,” he said. “Make sure it is accurate, including the number of miles traveled and the number of units. Look at your inspections. Are they all yours? Make sure it is good data so you get a fair shake.”

An important task for companies will be to develop a comprehensive safety plan to address any deficiencies, such as speeding violations, that might occur. “Whatever the highest areas of exposure are, that’s what you go after first,” Weaver said.

He also recommended that companies use the information contained in the file about individual drivers when they are being considered as new employees. But he said those requirements should be spelled out in the company’s hiring qualification standards to avoid any possible problems with equal employment laws.

The whole point of the new system, Weaver explained, is to improve highway safety. “It’s just holding us to a higher standard to do our job,” he said.

Coming Tomorrow
Thursday’s Update will include a report on AWMA’s final session at the Distribution Conference, a presentation covering the AWMA InfoMetrics data program, which is designed to help improve operations along the supply chain.