DC Metrics

People are our greatest asset. We’ve heard this – and similar sayings – for years. Now, however, leading firms are actually putting this into practice, and are reaping rewards for doing so. Going into 2018, people are still a critical link in the supply chain. -Donnie Williams, Asst. Professor of Logistics & Supply Chain Management, and Karl B. Manrodt, Professor of Logistics and Supply Chain Management, both at Georgia College & State University

What should you expect in 2018? Here are three things to consider:
Employees really do matter – and firms are measuring their performance. In this year’s study, we asked what companies consider the primary importance to their organization: people, processes, or technology. Sixty-two percent of respondents stated that people were their primary importance. This wasn’t just lip service either, as employee metrics accounted for four of the top 12 most popular metrics for the first time in the history of the study. Additionally, our results show that firms that focus on people first show significantly better results on many of the operational and customer facing performance metrics. These firms also experience the benefit of greater workforce agility, more full-time employees, and greater strategic human resource practices, which allow the firm to gain better utilization of their workforce through skill development and alignment. While technology and processes are still extremely important, these results really do demonstrate that people are still the most critical link that keeps our supply chains running.
Strategy: division and consolidation. Over the past seven years a mix strategy (be all things to all people) and customer service strategy has consistently garnered 80 percent or more of the respondents. During the past three years, customer service has taken the lead (54 percent in 2017) compared to mix at 29 percent. This means that organizational leaders are really focusing on understanding and pleasing their customers. As competition continues to increase, the ability to deliver consistent results that meet customers’ expectations is more critical than ever, particularly with the impact that Amazon is having on the markets through their rapid fulfillment strategies. The benefit of focusing on customer service strategy is that it helps align operations to what could be the most important skill for distribution centers in today’s environment: consistent and rapid execution!
The best get better. In the race to the top, who’s winning? Considering changes in performance from year to year, gains were made by all. Best-in-Class leads the others on improving or maintaining performance on 25 of the measures. Median performers followed closely behind improving or maintaining performance on 23 of the measures, and Major Opportunity performers improved or maintained performance on 21 of the measures.  Why is this important? Three of the five categories of respondents continue to improve year after year. Quite simply, this means that if your performance remains the status quo, you will have trouble keeping up with the competition and fall further behind in your ability to perform well for your customers. This could also impact your ability to retain your employees if you are falling behind on important workforce metrics. Either way, if you aren’t improving, you are losing.

The Outlook

How then should we live? Simply put, people are still our most important asset, particularly in a rapidly changing global supply chain environment. Workers still provide the flexibility and adaptability needed in 2018 to serve their customers. People really are our greatest asset – a fact that still isn’t outdated.