The Greening of America

It continues to surprise me how far the green movement has come in even just the past three years. At the same time I'm surprised at how little traction has been gained on the everyday side of green. When you look in any popular magazine or newspaper there is always some new story of a company going "carbon neutral" or completing a high profile LEED project.

Where are the stories about warehouses doing mass transitions away from metal halide lighting? Where are the stories of waterless urinal/low-flush toilets flying off the shelves? Where are the stories highlighting the benefits of simple LED light bulbs for exterior use? Why is there no attention on the small stuff?

Doing the right thing isn't always sexy or easy. I get that but in this case it should be. At the very least companies should feel ashamed to be using energy inefficient bulbs. Why hasn't GE or Sylvania brought out the campaign for energy efficient lighting? Where are the press releases highlighting the cost of not switching?

I follow the environmental industries not closely but regularly. It seems that recently all the focus has been on the macro-industries: energy, fuel, cars. What I want to see are the studies highlighting the little things. I guarantee a national campaign to change light bulbs will do more in the next 2 years than any amount of fuel efficiency will do over the next 5.

Automation vs. Manual

There are a lot of conveyor salesman that like to hoover around warehouses. They love to tout the productivity improvements that can be gained by installing their products. Throw in a nice little shoe sorter and you'll be able to take 4 people out of your shipping process! Add in a Pick-to-Light forward pick zone and you'll save 6 people on your picking! Wow! Why WOULDN'T I install this wonderful stuff?

There's a balance between operating manually and operating with automation and it is a fine line between justification for automation and throwing your money to the wind. It is all dependent on your operational needs for flexibility, knowledge of long term growth and cube throughput. Conveyor salesman will point to the Wal-Marts, Best Buys, Cingulars and other big companies as examples of businesses that use automation to lower their costs, increase their throughput capacity and enable cutting edge technologies. What they don't tell you is that those companies have an economy of scale in their DCs that enable them to know with a fairly high degree of accuracy what they'll need going through their facility in 3, 5 and 10 years. They add new DCs as opposed to growing existing ones.

So why wouldn't you want conveyor even if it cost justifies based on labor savings over a two year window? Answering "Yes" to any of the following questions may mean that automation is not right for you:

1. Are you going to outgrow it in 3 to 5 years and need to replace the whole thing?
2. Would you need to procure the technology systems to support the automation?
3. Is operational flexibility important in the processes that would be automated?
4. Is your business extremely seasonal?
5. Are your products or outbound boxes inconsistently sized?

There is a similar group of questions to ask yourself about whether conveyor is right for you, but this topic is about whether manual processes will work.

Manual processes have gotten a bad rap over the past few years from the six sigma, lean and just-in-time crowds. Automation has somehow become synonymous with efficiency. There is more to efficiency than meets the eye though. The text book definition of efficiency is the ratio of effective or useful output to the total input in any system. Or put into warehousing terms: the best combination of space, capital expenses and labor for the throughput required in the process.

One way to think about the problem is by changing the terms of the problem. Let's look at pallet storage systems. You can store pallets in any number of ways: floor stack, pallets rack with 12' aisles, double deep pallet rack, very narrow aisle pallet rack, AS/RS storage/retrieval systems, etc. There is a large set of alternatives. When you look at what you have and try to decide which to go with most people just end up going with what they know, traditional pallet rack with a forklift to pick from it with. Nice, simple and effective. But was it the best alternative for everything in your warehouse?

When you explain to people the conditions that effect how you should store pallets they are usually pretty good at understanding. They deal with pallets and storage all day long anyway so they understand the dynamics of it. Give them conveyor and all the sudden it seems like Greek. It's the same justification process, it's all about understanding the numbers.

For the average operation, manual processes are exactly what is needed. Your average human is quite capable of efficiently moving a box from one side of the warehouse to the other. A conveyor doesn't move that single box any more efficiently and the conveyor isn't going to do the processing at the other end either....that's a separate piece of automation. The trick is that conveyor can process regular, consistent volume more efficiently. If you need to move 400 cases in an hour then conveyor may be what you need. If you need to move 1000 cases....it may be even easier now to justify that automation. Ask yourself the questions above though, first.

Your conveyor system has to be designed for you busiest hour on your busiest day during the life of what it is expected to handle, which could be 5 to 10 years. If you have a peaking factor of 3 and are expecting 10% growth over the next 5 years- I'd really put some thought into whether conveyor is right for you yet.

RF Strategies

The most popular post on this blog is Warehouse RF Network. If you do a Google search for Warehouse RF it is the number 2 result. How we got to that spot I'm not sure, but there we are. A lot of the organic traffic that we get comes in through that post. Looking at the search terms that drive people there it seems that RF networks in warehouses are one of the biggest questions that people have when they go about setting up a new facility.

RF is one of the fundamental blocks of an efficient warehouse. It is the driver of so many "Best-in-Class" style processes that it is simply foolish to not implement it. The cost has come down over the many years since it was introduced that it should be part of any operation. However as is the case with most technology, a lot of operators are confused by it and what needs to happen to implement it.

When it comes down to it, an RF Warehouse system is not all that different from your at home wireless network. Most of the general equipment is the same in concept, simply bulked up to industrial grade. The real difficulty to RF is getting the right software and processes around it. Picking a WMS is the hardest part really. There are now so many options for Warehouse Management Systems that going through them to find the best for your situation can be a truly daunting task.

The trick to RF is making sure that the planning around it is complete. Follow these steps and you’ll be well on your way to putting in a very strong solution:

1. Implement a reliable WMS system
2. Setup a warehouse map and picking rules
3. Develop new putaway and picking processes to leverage the RF and WMS systems
4. Train all warehouse employees in detail on how to use the system
5. Perform a complete inventory count
6. Activate the system

The difference between RF and a paper system is, at the simplest level, the interface. Everyone you would employ in your warehouse is familiar with paper and how to work with it. There is a mindset about RF that it is more complicated because it involves a lot of technology. The truth is that the technology is now developed to the point where it is highly user friendly.

Lately when the topic of RF comes up, the natural follow-up becomes “What about RFID?” RFID is the next generation of Radio Frequency. There has been a lot of investment by organizations trying to push RFID as an efficiency driver. A lot of people know by now that Wal-Mart dictates their suppliers use it and the US Military has adopted it for inventory control as well.

What you probably haven’t heard is that even Wal-Mart is having a hard time driving their suppliers to RFID. They just recently began imposing a $2 per pallet fine for every pallet that comes in without RFID tags. The implication of course is that there are quite a few pallets coming in without it. Why aren’t companies moving towards it? Why is it always on the horizon as the next big thing without actually hitting? The simple answer is that the cost to implement continues to refuse to drop. Technologies usually drop in price as they become more widely used, RFID isn’t.

If you have any questions about these systems feel free to give us a call or send us an email. We are here to help you understand how to make these systems work for you and your company.

Warehouse RF Network

It is becoming more and more common for warehouses to have an RF or wireless picking system. The advantages of the system outweigh the initial costs. Increases in productivity, inventory accuracy and order visibility reduce overall costs every single year as the warehouse becomes more adept at using the system. However the installation of the system has become a point of question to many looking at RF. Who should design the system? How do I know what I need? What am I missing?

Having built and fit-out several warehouses with this technology it is not going to be as bad as you think from a design and installation point of view. The key to a successful system install is to team with a quality and knowledgeable IT and Data Wiring vendor. Whichever vendor you ultimately select should have the ability to layout and procure the IDF cabinets, Access Points, wire pathways and all other equipment. They should know the proper specs and ranges for all of the equipment they recommend and should give you an electronic drawing of everything in your warehouse.

There are several aspects to an RF system that you will need to decide. The first is what kind of bar code technology will be used on products and locations. Wikipedia has a page describing the many types of bar codes that exist and their many uses. Most handheld scanners have the ability to read multiple bar code types, but it is still important to coordinate and make sure that everything is compatible from the bar codes to the printers to the scanners to the WMS. If you receive product from other vendors they may already have their own standard that you can use. Check with them if you are thinking of matching their technology.

In the typical warehouse there are many ways that bar codes will be scanned and many obstructions that could interfere with the wireless signal. Rack in particular is the biggest issue with warehouse RF. It is important to take into account several rack related RF issues during your strategy:

1) Lift Equipment Scanners - Vehicle mounted RF or Handheld units. Forklifts present several issues of their own. Vehicle mounted RF is typically more robust, more difficult to steal and more difficult to drop and break. However there is the additional cost to mount it to the forklift and you don't have the flexibility to use the scanner for floor picks.

2) Lift Equipment - Man-up forklifts or Man-down forklifts. The type of forklifts used in the warehouse come into play with where location tags can be placed on the rack. For man-up forklifts the tags will go directly underneath the product on the beams. In man-down environments the tags will have to all be placed on the first or second level to allow scanning. If there is a mixed environment there could be room for quite a bit of confusion.

3) Rack Density - The more packed together the rack in your warehouse is the harder it will be to get a clear signal to every point a scanner could be used. For a density of one pallet every 4 square feet you will need to have the wireless access points much closer together than for a density of one pallet every 7 square feet.

4) Rack Flexibility - If there is the ability to add and remove pick levels or locations there will be a need for a more flexible labeling scheme throughout the warehouse. The most flexible scheme I've come across follows the AA-12-34-56-78 format. AA stands for the rack type or forklift used to pick and putaway in the area. 12 is the aisle, 34 is the bay number in that aisle (odds and evens should be on opposite sides), 56 is the beam level within the bay and then 78 is the location on the beam. (ex. SS-23-34-02-02 would mean the location is in the Single Selective rack on aisle 23 in bay 34 (with evens being on the left) 2nd level up and in the right hand position.)

Once all of these issues are decided it is time to work with the IT vendor to actually develop the design. Don't stretch any of the equipment you get to its maximum range. Your IDF cabinets will likely be about 250 ft apart. Your access points will be staggered throughout the building on about 100 ft to 150 ft centers depending on rack density. With a 500,000 sf building your probably looking at a 400 ft depth which gives you two rows of IDF cabinets running along your building and 3 rows of access points. There are a lot of items that need to be coordinated so much sure you develop a robust plan for what you want and need this system to handle.


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UPDATE:

There has been a lot of interest in this post. If you have any additional questions feel free to email me at dmusic [at] integratedstrategiesinc [dot] com .



Technorati Tags: rf, wireless, warehouse, design, barcode

CAD Tech Turns 25

It was 25 years ago today that AutoCAD was first released upon the design world. That's 25 years of increased design productivity, 25 years of better design drawing quality and 25 years of computer frustrations. No one will ever get past aggravating computer issues, but just imagine going back to drawing everything out by hand. I think everyone will agree that we'd rather not.

There is barely an industry out there that doesn't use a CAD program. Most notably will be any engineering, architectural or manufacturing company but think of all the new ways that computers are aiding in design. Marketing comes to mind as the beneficiary of many new tech toys to assist in design. Why can't PowerPoint or Photoshop be considered a CAD program?

What will the next 25 years of design be like? What new programs and innovations will come around to make life simpler for us engineers? If I have my say it will probably be something like Google's SketchUp program which is already replacing much of the 3D CAD work I used to do in AutoCAD. Once programs make it as simple to work and design in three dimensions with color and texture as it is to draw in two dimensions now there will be a new design revolution. Most of the arguments against CAD programs are that they take the human element out of the project. It is difficult to envision and feel what is being designed.

Not many news rooms are running this anniversary but it is one that really has changed the world a little bit. How many buildings are currently built that don't use CAD? How many products are manufactured without an electronic design developed first? How many engineering companies (design or otherwise) haven't invested in at least one copy of a full CAD program? Why would anyone continue to design by hand when it can be designed faster, better and more accurately on a computer?

If you are working with a company that isn't employing these technologies you should really be asking them why they aren't using them. Sometimes there really are valid reasons not to use computer programs to assist in the design but they are few and very far between. For any real estate acquisition you should ask for the electronic site plan (and I do not mean in PDF). Too often clients come to us asking for design help with their facility and we learn that there are no electronic copies of the property. Recreating a CAD from a hardcopy is possible but it shouldn't be necessary anymore. Even simple office renovations require drawings to get permits completed. Having that electronic version is a requirement. It should accompany any lease or building purchase.

Welcome to the next quarter century. It should be a fun time.


Technorati Tags: autocad, cad, tech, computer, design

Forklifts, Order Pickers and Pallet Jacks.....Oh, My!

Sorry for the late post today and for the cheesy title. I simply go with pops into my head too often for that. Forbes.com has a great article today on Crown Lift Trucks. Crown is another company that we have worked with a lot when we deal with warehouse design and equipment. It seems like every time we've needed something out of the ordinary they were able to pull it together for us.

Yesterday we discussed warehouse metrics and I'd like to tie this in with that. Having the proper storage equipment and material handling systems is critical to proper productivity. Racking and forklifts go hand in hand. Sure if you want to set your warehouse up to handle every type of forklift available you can. Throw 12 foot aisles in everywhere and you really won't have an issue using any piece of equipment you can find off the street. You're sacrificing all kinds of valuable real estate, but if up front costs are all you care about then you may be onto something.

If you operate either a high volume or large footprint warehouse then you know how much that forklifts cost over the life of your operation. Nothing has more far reaching impact as your equipment. Proper material handling strategy can help ensure that your warehouse is successful. There are all kinds of concepts that we could go into that would blend together the use of a Warehouse Management System, product storage areas and material handling equipment. That will have to be a post for another day to really give it the thought it deserves.

On a high level though you need three strategies no matter the size of your operation:

1) Receiving
2) Putaway and Picking
3) Shipping

These are three distinct areas of the warehouse that have a high chance of handling either different volumes of product or different sizes of products. Any material handling decision that you make should always account several factors:

1) Size of product to be handled (there could be multiple)
2) Volume of each size product through the area
3) Space you have available to work in

It can sometimes not be obvious what the obvious solution is. There are so many factors that go into making the proper warehouse design factors that it can be hard to really wrap your hands around it. Once you do get it figured out it looks really good and works very well.

Our relationships with both ISS and Crown put us in the ideal position to design and implement the best warehosue solutions for your company or to give you the help you need to put it together internally. The life span of a warehouse implementation can be anywhere from 3 to 10 years. That is a long time to be losing money because a bad plan was put into place.


Technorati Tags: warehouse, design, crown, iss, forklifts

Distribution Design Mistakes to Avoid

Distribution Centers (DCs) are some of the most important aspects of any supply chain. An effective distribution center can be the difference between losing money and making money. As we've discussed previously, Supply Chain health can often be overlooked. Without putting the correct processes in place the supply chain won't function correctly even if every aspect was well designed and implemented. But in order to even have a chance to run an effective supply chain, the design at each step must fit the purpose. The first cog to the supply chain is the DC.

Many DCs fail to even minimally live up to the high business expectations set for them during the initial strategy and planning stages. The issues that they face are varied but the symptoms are usually the same: low throughput, processing errors that impact service levels, inadequate inventory controls, poor productivity due to inefficient design. Many reasons exist for the struggle to open successful DCs. Most struggles can be associated to either lack of consensus on the plan, project plans run over budget and cannot be fully implemented or the proposed ROI for the design is inadequate to justify the project.

Beyond those, there are 10 common mistakes that should be avoided:

1. Incomplete Supply Chain Strategy
2. Lack of Financial Objectives
3. Overstated Inventory Levels
4. Failure to Utilize Postponement Strategy
5. Planning Without Data
6. Failure to Apply Lean Principles
7. Irrational Demand Buffering
8. Ineffective Space Utilization
9. Poorly Designed Value-Added Services Operations
10. Misapplication or Lack of WMS Technology

Ultimately a Distribution Center is a large machine where each part must work together. If even one part is incorrectly designed or fails to perform correctly the entire operation will suffer. Information and products must flow between areas seamlessly or it will back up and cause havoc.

Look at receiving docks in DCs. It is a fairly straight forward area where product comes in and relatively few tasks must be performed. A truck backs up to the dock and product is unloaded either manually or with some sort of fork lift. There may be a quality and count verification once off the truck, but for the most part the product is now ready for putaway into the storage area. Too often the receiving dock gets clogged with processed inventory that has not been put away. Usually this also means that orders cannot be placed against that product. The backup is usually caused by pickers focused on filling orders in hand and forgetting the putaway process. Eventually no more product can be received if nothing else is putaway simply because there is no room to put anything else.

The best way to avoid design mistakes is to always design with a process flow in place for facility operations. Before you can design a receiving area you must know what tasks will be performed there, what the putaway strategy will be and how many people will be in the area. It is not possible to design an effective storage area without knowing the picking processes and technology that will be used.


Technorati Tags: design, warehousing, process

Entrepreneurial America

Small business is the backbone of America. Economic growth depends on new businesses and small businesses. Sometimes it can be scary to hear the success rate statistics or about the flash in the pan businesses. A lot of people that would like to break away from the corporate world decide not to because they hear that only 20% of businesses survive past 4 years.

Fear not though. According to many recent studies most small businesses actually make it past the four year mark. 50% according to some studies. If ever there was a time to break out on your own and ride that idea that has been sitting in the back of your head it is now. Most people have that one idea that they think could be their key to independence and financial security. Deciding to actually break out and execute it is the hardest part. Leaving a secure job and pay check is a scary thing to do.

Fortunately, it has never been easier to find assistance in starting up your business. Venture capital companies seem to be everywhere giving out money to all kinds of new businesses. Small business loans are fairly easy to get for the common entrepreneur. Consulting companies are around to help you plan out every aspect of your business you don't have the know how to set up perfectly yourself. Consulting companies specializing in every aspect of business exist: Real estate, management, recruiting, logistics, inventory, workplace, business strategy, strategic assessments, site selection, etc. The list is as long as your imagination.

Unfortunately it is nearly impossible to find a consulting company that specializes in everything you are looking for. Who wants to bring in five different companies to help them. Life would just become more complicated than if you tried to figure everything out yourself. Those people that pull the trigger and start their business go out and get their financial backing, find a real estate broker and start getting everything lined up. All the ducks seem to be in a row, but are you sure you aren't missing anything?

Integrated Strategies works with real estate brokers. Our job is to help those brokers' clients be in the best position to succeed long-term. Our goal is to create partnerships with businesses so that we can help each other over the long-term. We see our role as that of client advocate, setting up everything necessary. We can set you up with procurement strategies with the vendors you will need on an everyday basis. We have the capabilities to manage your facilities or assist with your asset tracking. We have the tools to implement, design, or manage any physical work you need completed. And we aren't outsourcing any of that work, it's all done in house so you can meet, know and have that single point of accountability for the entire aspect of your business that you need help with.

America has become a small business, service economy. Specialization is the key to success anymore. Specialize what you do well at and we'll help you with the rest.


Technorati Tags: consulting, entrepreneur, small business

Warehouse Design

When it comes to product storage in a warehouse there are all kinds of choices. Knowing which one you should use in your operation becomes a little trickier. A lot of people cut out the hassle and simply install pallet rack everywhere and use it to suit whatever needs they happen to have. Need to store a single box of paper? Throw it in the rack! Want a forward pick area? Front, lower section of the rack!

There are a few people that run in the opposite direction and end up with 7 types of storage mediums: Pallet rack, push-back rack, pallet flow rack, carton rack, carton flow rack, bin shelving and floor storage. Maybe this was what they needed during their first look at what they had on hand, but does it help them grow their business? Is it actually making them more efficient?

First let's go over what each type of rack is and what it is used for (in-depth looks within the links from Integrated Storage Solutions a company we have worked with extensively over the years):

Floor Storage / Bulk Storage: The simplest, cheapest, easiest and sometimes most dense storage solution. Highly flexible and if your pallets can be stacked 3 or more high the density is comparable or better than traditional pallet rack.

Single Selective Rack (SSR): Traditional pallet rack installed in a back-to-back configuration. Used for storing pallets of products on multiple levels. It can be installed with varying aisle widths depending on the material handling equipment that will be used in the operation. If you're looking for the most dense configuration you'll have to spend about $75,000 on a Turret Truck, but your aisles will only be 5 feet wide (the so called "Very Narrow Aisle" (VNA) configuration).

Double Deep Rack (DDR): Pallet rack with a twist. Like SSR it is used for storing pallets on multiple levels, however DDR takes puts two bays of SSR together so that you can store two pallets of the same product together. Think of all that slow moving product you have in multiple quantities but can't get rid of. With a double deep configuration you improve your storage densities without sacrificing significant investment in fancy rack. You will have to spring for a double deep forklift and you can't use the VNA configuration.

Push-back Rack (PBR): Double deep rack with a twist. Like DDR, multiple pallets are stored in the same location. Push-back rack is significantly more expensive because of the moving parts but if you product moves at a fairly swift pace and you have wall space to spare this could be for you. One of the great things about it is that you can bring back the VNA configuration because the next pallet will always be in front position. It's a great space saver for expensive real estate like freezers and refrigerators.

High Rise Decked Rack (HRD): Now we move away from the pallet storage to case storage. HRD exists mostly on the carton side but can be used as pallet storage in a pinch. HRD is essentially SSR that is 48" to 66" wide and not in a back-to-back configuration. Even though it is not installed back-to-back, there is a pick face on each side because cases are stored instead of pallets. Picking is performed by hand from an order picker or cherry picker instead of with a pallet forklift. Because pallets are not being stored it is possible to increase the number of beams and create customized slots for your various smaller products. Very good for getting your non-standard products in 2 pallet or less quantities into dense storage. A floor pick can be set up on the bottom levels to increase picking efficiency.

Bin Shelving: Simple 72" tall gray shelving. Used for storing small product in a dense environment. Perfect for non-automated and minimal investment operations. If you are starting small this is generally what you will have. It can be put into a mezzanine configuration to pick from two or three levels. Flexible and more easy to reconfigure than most other types of rack. More expensive than most people realize and usually only cost justified in small areas or operations.

Carton Flow or Pallet Flow (CF / PF): Great for a Forward Pick area. If you know you need a certain amount of a product in a three to five day period and want to minimize the labor to pick it, this is the system you'd be looking for typically. Product goes in the back and slides forward for convenience. This is not a storage medium necessarily, but a pick medium. However it usually gets classified as storage. Forward pick justification will be a topic for another day.

There are additional racking systems including Drive-in Rack, Cantilever Rack, Triple Deep Rack (for the truly brave) or Stacking Rack but for the most part these are used sparingly and for very specific needs.

With all of these choices, how should a warehouse storage solution be designed? The answer, of course, varies by requirements. No warehouse will be the same. The products, building specs, capital available, labor rates and more will vary project to project even within the same company. What flexibility is required for long-term business objectives? How much real estate is actually available for use? What sort of processing areas are needed besides storage? Warehouse design is not a simple process and good warehouse design requires pouring through at least a year's worth of product and ordering history.

Recently we have been working with brokers to help clients develop space models for their needs. They usually come to us with two or three spreadsheets showing their overall product on hand numbers, warehouse turns and some general requirements. Of course this is helpful for the design but it ultimately doesn't tell us anything about the operation. If their operation turns 4 times a year there could still be significant product turning 8 times and significant product turning 1 or fewer times. Overall numbers don't showing seasonal peaking. There may be an average of 30,000 pallets on hand during the year, but if their peak period requires 50,000 the design will be wrong before the design period even begins.

Once the data issues are worked out there is still the problem of balancing capital costs with on-going operational expenses. Almost any operation can operate entirely off the floor or in bin shelving, but the labor costs and real estate costs would be through the roof. Similarly, any company could implement a completely automated warehouse with almost no labor, but the capital cost would put them out of business before the first product was picked. Those are the extremes, but even for warehouses that are entirely SSR there are break points. Different Material Handling Equipment (MHE) has different labor productivity rates and capital costs. They require different aisle widths which affect the real estate costs. Which one should you use?

Warehouse design is not a task that is performed every year or even every third year for most companies. It should be a well though out process to help develop an effective plan. There is a reason that Third Party Logistics providers (3PLs) are adding customers everyday. They offer a convenience service to people that don't want to deal with these issues. Before looking to outsource, bring in a specialist to evaluate what is right for your company. Some networks should be outsourced because of size or regulation issues, but most can be kept in-house for minimized costs or even to operate at a profit to the business. With new Value Added Services that can be performed simply there is opportunity to sell services to your customers before the product even leaves the door. Not to mention the potential to add e-commerce to your existing business.


Technorati Tags: rack, consulting, design, warehouse, ecommerce

Strategic Facilities and Operations Assessment

Aging infrastructure and stale business practices can weigh down a company's operating flexibility. More than just a tactile look at what is going on, a company needs to look at the way they are doing business and validate that the core assumptions they are operating under still apply. A building built in 1920 could be fine for some companies but completely inappropriate for another, even a competitor. It comes down to the principles that are grounding your business.

Any assessment should start in the boardroom with the executives. Brush off the mission statement and business plan and see if they are still applicable to the way things are truly running in the day to day operations. Compare it to the competitors and see if it could relate to any of the competitors business plans. If there is any misalignment, sit down and figure out why things are no longer the same. Rewrite the business plan and mission statement if necessary. Make sure that these get distributed through the layers of your company; your people need to know how things should be done and that their executives are staying ahead of the curve.

Next, evaluate the organizational structure to make sure that is supports the business. Often times groups will spring up out of momentary business requirements and never disappear when those requirements change or go away. A good organizational structure will have a clear role for every group. It will also be apparent how the groups will interact and support each other. Organizational structures and the related Org Charts should not be considered fixed entities. As business changes and evolves these need to change and evolve with it. The organization as a whole is simply the chosen method for executing all requirements for performing business functions.

With the business plan and org chart in place, take a look at the facilities and infrastructure. The environment where work is performed is as important as the actual plans. If you have created places where no one wants to work or your employees can't be productive evaluate ways to resolve the situation.

We were working with a client on assessing their facilities two months ago and they were trying to figure out why their work force was older than their competitors and why they couldn't retain young employees. Their problem was entirely related to their space. They had 1970s style workspaces and cubicles, their buildings were former military grade construction (almost no light or design elements), and their technology was completely out of date. Some employees were still using 15 year old beige analog telephones! Older employees didn't mind the setup because it was the environment they had come up in, but young employees essentially refused to work there. Fortunately their lease was nearly up and moving to a new space with new furniture was an option.

The last step of the assessment, after all the changes have been made and communicated, is to put in procedures to create continual improvement. This is not related to six sigma, this is reevaluation. Over the course of a year after all these changes have been made, you will probably notice reduced operating costs through reduced turnover, higher margins and increased productivity. Without continual improvement these costs will begin to increase again until it is necessary to perform a full assessment again. The cost of making all the changes necessary for realignment is not insignificant but they typically pay for themselves in a relatively short time frame.


Technorati Tags: facilities, assessment, org chart, consulting, operations

Green Design and LEED

Leadership in Energy and Environmental Design (LEED) seems to be the coming trend for quite a few businesses. Some companies seem to just be jumping on the bandwagon so they don't get left behind, some are using it as a marketing play and then some see it as their part toward being environmentally friendly. The LEED Certification process is a valuable tool to gaining recognition of your achievement. Fundamentally it is a marketing tool though. Why worry about meeting a LEED standard if the marketing bonus has no value to your business. The important question you must ask yourself as a company is why you are looking for a LEED build-out.

It is easy to find reports and research saying that the cost of building LEED is no more expensive than traditional construction. This is true for ground up buildings. For Interior fit-outs or renovations (the vast majority of projects) this is far from the truth. Due to the overall scale and budget of these projects it is near impossible for the added certification and validation costs to blend into the budget background or be factored out by other design changes. Putting the extra cost down as a marketing expense is the easiest way to justify a LEED project. Almost all other methods lead to the extra expense being non-justified.

The popular environmental news magazines and stories have companies believing that cannot be green without being LEED. This is the farthest thing from the truth. Utility companies and large manufacturers are the clearest example of this. These companies are constantly striving to do their part for the environment through small and big initiatives. Whether it is capturing vent stack CO2 for oil recovery or offering green electricity generation or discounts for cutting your power consumption they are making an impact without the LEED program.

If you decide like most companies to not go LEED, now you must ask yourself: what can I do to help the environment while helping my business? The answers to that question are much easier than most people think. Some solutions are as simple as changing out all the light fixtures in your building to be more energy efficient (the payback is quicker than you would think at 1 1/2 to 4 years). Some solutions are more complicated involving grey water capture for irrigation systems and low flush toilets. It all depends on the payback period that your company requires for investments of this type and taking the time to look at all the costs.

One of the easiest ways to evaluate green systems for your building is to work with a consulting company. Our company is currently applying green systems to every project that we're involved in including environmentally friendly carpet, low VOC paints, energy efficient lighting, and wall systems instead of drywall. Every project and geographic area will have different variations on what is allowed by code, but there is a lot of room to be environmentally sensitive without blowing the budget and actually securing on going cost savings.

Being environmentally aware as a business is a critical challenge for every company large and small. Over both short and long term it can have significant impact on your business. Companies that are not environmentally friendly are going to have a hard time growing in many markets and will be spending more on their infrastructure and operating costs than competitors. LEED is a good way to go about achieving the green goal, but it is definitely not the only way and usually not the best way.


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