Reopening in the ‘New Normal’
Categories: DistributionBy Dick Friedman | May 28, 2020 << Back to Articles
During this pandemic lockdown, most jansan distributors are operating with fewer part-time and remote working personnel and are rushing to fill an increased level of sales orders. However, hope for employment is on the horizon.
But re-opening should not be a rushed process of bringing everyone back to work at once and purchasing. Nor should everyone be brought back. It will not be like it was before the quarantine. Here are some guidelines for reopening in a way that does not cause chaos in the office and warehouse, nor with inventory investment.
Quotations, sales order entry, and customer service
Even before the virus struck many non-distribution companies required or allowed some employees to work from home. Studies of this arrangement revealed that most remote home workers are more productive and accurate than on-site workers with the same responsibilities and tasks. The time not spent commuting allows these telecommuters to adjust their schedules so that they can do more in the same or less time than had been spent at the office. And many do not have to worry about their children coming home from school, so they are able to concentrate on their work.
The money not spent on commuting results in happier employees who are more dedicated to doing a great job. A financial and emotional bonus for those with infants is that they no longer have to spend money on a sitter nor worry about their children. Obviously, employers benefit from increased productivity and accuracy, but they also save some money by reducing in-office costs, offset by the cost of supporting the telecommuters.
Many distributors have implemented telecommuting during the quarantine isolation for quotations, sales order entry, and customer service personnel (e.g., answering the question, ²Where¢s my order?²) Once home confinement ends, every one of these distributors should consider continuing telecommuting for at least some of those now doing it. But doing it right means investing in secure, efficient, and fast remote computer and telephone capabilities, including the ability for a telecommuter to access all authorized ERP system functions and instantaneously contact another employee (e.g., contact an on-site warehouse worker to check stock or contact another telecommuter with a question about special purchasing). And doing it right on a continuing basis means setting goals for telecommuters and monitoring their performance. Those distributors who have not used telecommuting should investigate its costs and benefits for the distributorship.
Purchasing and inventory management
Purchasing and inventory management are treated separately because quickly filling a surge in orders has taken priority over order-filling accuracy and keeping on-hand data up to date and correct.
Although some distributors use at-home purchasing agents and inventory managers, many require these functions to remain on-site because of the need to walk into the warehouse (or outside yard, for some) and check stock, look for product receipts not yet entered into the system, etc. This is especially so for purchasing personnel working with computer-generated suggested buying displays/reports. Even when warehouse and data accuracy are back to traditional levels (which may or may not be high enough), these functions are likely to remain on-site.
In the warehouse
Before bringing everyone back into the warehouse, consider bringing in a few people just to put away the items on any pallets or in boxes clogging the aisles, and otherwise straighten out shelves, pallet racks, etc.; perhaps on a weekend or at night-at premium pay if necessary.
If the ERP system contains a function for recommending where to store products, do not use it unless there is a way to ignore data points that represent activities that occurred during the period when sales soared, else the recommendations will be incorrect. If possible, right after the warehouse is straightened out conduct a physical inventory and adjust system data so accurate quantities are stored.
Take care to not adjust quantities on hand without first looking everywhere for the “missing” quantities. If the system shows too much, check inventory history to determine if a similar item was actually sold instead of the item with excess quantity on hand.
Some distributors have not accepted returns while some warehouse workers were sheltering-in-place, but hopefully have used their ERP systems to record data on customers who wanted to return items and the specific items. In getting ready for accepting returns, determine if the current returns area is sufficient to accommodate much more than usual. If not, define a larger but contiguous area.
Also, determine if people know how to use the ERP system to record data as returns come in, and track the location where items are stored for evaluation (as to scalability vs. returning to a manufacturer vs. scrapping).
As sales are decreasing to pre-pandemic levels, do not use the system-forecasted quantities to buy unless there is a way to ignore data points that represent sales that occurred during the periods when sales were higher than normal, else the recommended quantities to buy will be too large.
Some ERP systems allow the user to define the periods of data to use, which should be done. Regardless of which data is used in forecasting, a very knowledgeable purchasing person(s) must review the system recommendations, and if necessary, change the quantities in the data that would be transformed into a purchase order. This process of defining the periods of data to use must continue until there are approximately six months of “normal” sales, and even then, set a parameter to look back no more than six months. Watch out for seasonal forecasting, which is likely to require manual adjustment.
Although reopening in the “new normal” won’t be easy, jansan distributors can maximize productivity and accuracy by using these recommendations.
About the Author.
Dick Friedman is an objective and unbiased certified management consultant. For more than 20 years, he has helped jansan distributors, including some using bar code scanning, prevent warehouse mistakes that lose sales and customers. You may contact him via www.GenBusCon.com.