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Consumer Goods Logistics Blog


Want Better Inventory Accuracy? Hire for Performance

Published by Richard Reilly on January 24, 2014

You've heard of pay for performance, where workers are incented for higher than standard productivity?  At KANE, we have had good results by hiring for performance.  Let me explain…  

Inventory accuracy is a critical component of warehouse operations, particularly when tracking by specific lot numbers.  Over time, we have added procedures and cycle counts to minimize errors.   For associates whose performance drops below acceptable levels, we invest time in counselling and training to successfully address any issues.  But, this approach sucks up valuable manager time. 

At one of our process improvement sessions, we hypothesized that hiring new associates who were more accurate, by nature, would reduce picking errors, and improve accuracy and lot control.   It would also greatly increase productivity by eliminating the time required to intervene and retrain associates who were not meeting productivity goals. 

So, we developed a test to be administered during the interview process.  The candidate is shown a wrapped, placarded pallet of mixed cases.  The candidate is then given instructions to break down the pallet, record all lot numbers and the number of cases of each lot number in the pallet, then re-palletize, wrap and placard the pallet – all while being timed.   Candidates are judged based on speed and accuracy.

Results to date have shown clear improvement.  This as an example of problem solving using the "open space" concept.  We expanded our limited field of view and successfully addressed an ongoing challenge – inventory accuracy – using a completely new approach.

Two Case Studies

Logistics Services for Health and Beauty Aids

 

Filed under: Warehouse Operations