Three factors — data analysis, accountability, and communication — can combine to improve your logistical processes. But the trick is to find a balance between the three that will support continuous improvement. Each factor has its place: Analysis generates performance standards, without which you cannot enact accountability. Accountability enforces the implementation of data-generated insights. Communication is the glue that holds analysis and accountability together; if communication fails, accountability and analysis alone cannot yield successful results. Let’s cover in more detail how each of these three factors can improve your operations.
How do you use data to improve logistical processes?
Data is available now more than ever before. But it takes more than the mere presence of data to truly impact efficiency. Reap the benefits through these simple steps:
Collect and Organize Data
Not only do you need to collect data, but you also must understand what the data you collected means and what it pertains to. For example, most operations have data collection systems for both productive hours and paid hours. Paid hours data should be used for budget management while productive hours should be used for productivity analysis. If one doesn’t understand the underlying meaning of this data, they can easily reverse the use of the two types of hourly data.
Visualize and Analyze Data
Present data in a manner that can spark questions. The figure below shows productivity for four warehouses. From the graph, you can see that the fourth warehouse is far more productive than the rest. This can spark a number of questions: Is building D more productive because it has more skilled staff? Does the building receive orders that are easier to process? Is the building cleaner and thus easier to navigate for operators? Investigating these questions generates insights that can improve productivity for the other three buildings.
How can accountability improve logistical processes?
Accountability is about setting objectives and enforcing them. Accomplishing one goal usually means setting a new goal. Over time, this leads to a gradual improvement in operational processes.
If there is no structure in place to sustain and guide accountability, it will eventually fail. To ensure accountability thrives, you must build a formal accountability structure that clearly defines each person’s role in improving processes. The structure can also be the vehicle through which operations targets get enforced. Below is a sample of what a formal accountability structure can look like.
Having a formalized accountability structure means you can consistently enforce target-oriented performance while controlling operational activities. Without a formal accountability structure, goals can fade into complacency, which leads to unnecessary costs.
How can communication improve logistical processes?
Effective communication creates process-improvement culture. All operations stakeholders are experts in their respective areas of the supply chain, and their collective knowledge produces far better results than individual efforts. To benefit from this collaboration of expertise, it’s important to have channels in place to facilitate communication. There are three ways to leverage communication towards a culture of continuous improvement:
The Ultimate Goal
The most important aspect in process improvement is a thorough understanding of operations. The lack of an in-depth understanding of operations means analysis, accountability, and communication cannot improve operational outcomes. Instead of making these three factors your main ambitions, use them as tools to deepen your understanding of operations.