I interviewed Tim Calie who discussed Improving Small & Medium Size Warehouse and Transport Operations.
It’s great to speak with you today, Tim. I’m looking forward to hearing your views on improving small- and medium-size warehouse and transport operations. Can you first provide a brief background of yourself?
Yes, certainly. I attended a college in northern New Jersey—William Paterson University. My major was business; my minors were Spanish and psychology. I started out in a warehouse and distribution wholesaler called Newman Distributors; they were the largest wholesaler in the Tristate Area. For 17 years, I worked as supervisor, manager, and, eventually, a director. We went from 26th to the 6th largest privately owned wholesaler in the country. The revenue went from $100 million to over $2.5 billion in sales.
I went through different areas of the warehouse and was able to see pockets of internal income not being acquired, whether it’s transportation costs, percentages, discounts, return-to-vendor programs, productivity benchmarks on the order-picking line, restructuring and streamlining the environment. Then I carried over those assets and skills to various other distribution and transportation firms and was able to streamline the existing environment and go in and look at the processes of the people and restructure and reorganize without any capital investment and reduce cost and improve service. In the process, I acquired two service awards from the largest retailers in their industries: Payless Shoe Source and Starbucks.
Great. Can you share your views on how you improve war house and transport operations that are small- and medium-size?
Yes, it’s basically going in and looking at the people and processes. There are two things in an environment, whether it’s a transportation terminal, warehouse, or distribution center. An even-treated sense of different businesses and entities. I’ve done consulting for a health spa, in my consulting environment. I’ve been doing consulting for the past five years, and I’ve worked in a health spa, in a restaurant…
In the warehouse, distribution, and transportation environments, it’s just two things in any business that exists: it’s people and processes. The main focus is to go in and look at the people, which means learn all their jobs, learn the people themselves, because the average person, as a supervisor, manager, director—in that environment, what they do is attain that position by attrition or seniority, and people don’t train them properly or they don’t give them the proper tools or support to do the position. It’s called employee suitability analysis, and it’s going in and learning the people, learning the jobs, as a leader, as an executive going in and engaging people, being highly open-minded and a communicator, and having a highly professional demeanor and showing that you care about them in general and you’re just there to help the process.
There’s a suitability factor of making sure their job descriptions are correct, because in most companies, the job descriptions haven’t been updated in years. They wait for a problem to happen. In what’s called crisis management, a company will put in a lot of procedures or people on a process, but the whole key is the root cause; what caused the issue is not resolved, so it’s looking at the root cause. That’s the people aspect of it.
As far as the procedures aspect of it, most procedures aren’t documented or updated, and there hasn’t been assigned accountability for each process in the procedures in processing the order throughout a transportation terminal, warehouse, or distribution center. The key is also establishing accountability, who’s responsible for what job, and not waiting for the crisis-management mode to come up.
Establish accountability, define job descriptions, make sure people are suitable for the job, support them in the job, have them sign off on the document, and hold them accountable in a very professional way. As far as the procedures follow-up goes, it’s looking at the procedures, knowing where they’re not updated, and then looking at how the whole operation works. Every single job has a leader; parts of the process has a leader.
The other aspect of it going forward, the next step besides people and processes is organizing the environment, which means most businesses small and medium size don’t have benchmarks in place for productivity and accountability as far as whether it’s drivers out on the road, a transportation firm, how many drivers are allocated on the road, how many people are in the order-picking line, how many people stock the warehouse.
If there’s no monitoring of the volume of the business and establishing what’s called benchmarks—whether it’s loading a truck, how many drivers to deliver X amount of goods, how many orders to pick—putting in basic benchmarks, taking the highs and lows of your analysis, and putting in a medium benchmark in and sharing the goals with the team and saying, “Here are the hours we have to accomplish in order to maintain and pay for our overhead and also to maintain a certain margin of profitability, which is critical.” On a higher level, once the benchmarks are established—they’re called KPIs, key performance indicators—and you put them in for quantity, productivity, and you put them in for quality.
On a higher note, once goals are reached, you can also put in incentive plans for the employees, whether it’s a bonus structure or it’s an hourly increase once a certain goal is met. Again, putting key performance indicators and parameters to structure the environment, what the average person should produce—productivity—and the higher goals are when we attain certain goals, what’re the incentives and rewards accepted. That’s kind of a basic structure as far as small- and medium-size businesses and what they most lack.
Can you share any successes that you’ve seen?
Yes, there was one environment I went into with a third-party logistics company called NDC/NFI Industries down in south Jersey. As a general manager, I had a regional warehouse. We were receiving a hundred truckloads of Ocean Spray juice from Bordentown, New Jersey, which is 20 minutes away, and the main facility was in Burlington, New Jersey. When I walked through the warehouse, we had over 20,000 cases of missing Ocean Spray juice in the inventory. It wasn’t stolen; it was just missing in the inventory. They had a WMS, which is a warehouse management system. Again, it was for processing out the procedures and lack of availability and properly structuring the environment.
After going in and analyzing the operation and maintaining and restructuring the proper procedures and redirecting the proper personnel suitability in certain job functions—which is the inventory-control area, which is the key to the environment—we were able to reduce a 20,000 missing-case inventory to 50 cases in 26 days and maintain a 50-case or less.
Another entity was in Teterboro, New Jersey, Sara Lee Coffee and Tea, which was not a 3PL as an asset-based environment. They had an order-picking error ratio of 14 percent. By restructuring the job descriptions, establishing accountability, and restructuring process and procedures, we were able to reduce the 14 percent error-pick ratio to 1 percent in approximately a month and a half.
Do you have any final recommendations?
Most small- to medium-size businesses, for some very obscure reason—I received two calls in the past two months; I’m establishing my own consulting firm, as well as a team of consultants, which we just started to do this—these two executive positions that people contacted me had the same thing in common. Both companies—one in Queens and one in Jersey City—said that the acquisitions or increase of sales and in the distribution centers. Again, the costs were going sky high; the costs were not being consistent. With the increase of growth in sales, the costs were still a lack of restructuring, lack of streamlining, and accountability. The only advice I’d give to people would be to get some leaders in such as myself on a limited bases. We would go in, streamline it; no capital investment, no increase as far as software or hardware, so no large money being put into the operation; have us restructure the environment, and we’ll be able to improve the existing operation.
Thank you, Tim, for sharing today.
Tim: You’re very welcome. I’m developing my own Web site and I’m on LinkedIn. My name is Tim Calie. The team of consultants I just established—we’re just putting out our Web site over the next month and a half—is Complete Supply Chain Systems. It’s www.CompleteSCS.com.
About Tim Calie
Top 1% .Executive Manager/Consultant/
Entrepreneur operations/supply chain/distribution/transportation/