Seven Hurdles to Achieving Real Results for Material Handling Systems

By Jim Tompkins, President, Tompkins Associates

Gaining executive support for a material handling systems implementation can be very difficult. Often projects are hindered by a thought process on the part of the many executives that believes:

• The best material handling is no material handling.
• Material handling does not add value.

Much of this thinking comes from executives being uncertain if past material handling systems implementations were successes. The reality exists that all of commerce would come to a halt without material handling and material handling does add value. It is not unusual to get a 20-30% after-tax return on investment on properly planned and implemented material handling systems.

But like all business improvements, especially those that require significant capital, there are hurdles that must be overcome. Knowing what they are and clearly defining a plan to overcome them, is the way to gain the respect and support of executives for pursuing major investments in material handling systems. It is only once a path is defined over these seven hurdles that material handling systems will achieve real results and be considered successful.

Hurdle # 1: Planning

The most certain way to undercut material handling success is to do a poor job of planning. No matter what takes place after a plan is put in place, if the plan is wrong the results will be disappointing. The most common material handling system planning problems are:

1. Planning for the past
2. Planning for the average
3. Planning while assuming the current process
4. Not fully investigating a wide variety of options
5. Attempting to cover all contingencies within a plan even when the contingencies occur very rarely

It is only by really understanding the future requirements of a system, defining a wide variety of alternatives, economically and qualitatively evaluating all alternatives, selecting the best alternative, developing an implementation plan and then selling this plan to executives that the planning hurdle can be overcome.

Hurdle # 2: Accountability

The challenges with the accountability hurdle can thwart a project. Make sure you know the answers to the following questions:

1. Who is responsible for each aspect of the planning and implementation activities? Does everyone involved have a common understanding of his or her roles and responsibilities?
2. Are the right qualified people with the correct experience involved to get the job done?
3. What activities will the team accept responsibility for and what will be outsourced?
4. Is everyone communicating results so that the relationships between the accountable parties are acceptable?
5. How does accountability evolve over the life of the project from planning, design, and implementation to operation?
6. When will aspects of the project be passed off? Who will take the project to the next level? And to the next? And the next?

It is only by being sure that these questions are all answered that a company will be able to crawl over the accountability hurdle.

Hurdle # 3: Go Live

Go Live is not just something that occurs at the end of implementation. Go Live is a process that requires the clearing of the following hurdles:

1. Go Live must be proceeded by a rigorous, hierarchical acceptance testing that is well thought out and deployed.
2. The Go Live plan must adequately allow for the hardware, software and "human ware" learning curve. Training must be incorporated.
3. Contingency and back up planning must be rigorous.
4. Decision points and GO Live "points of no return" must be managed.
5. A smooth, logical methodical ramp up plan must be pursued.

It is by overcoming these hurdles that major disappointments, Murphy's Law and system shock can be avoided.

Hurdle # 4: People

Problems with people always crop up with large-scale implementations. With the downsizing that has occurred and the hectic pace of our work lives, the people issue is often the tallest hurdle that needs to be cleared to achieve true material handling system results. The most significant people hurdles are:

1. A consistent project team from initial data gathering through to implementation must be put in place and kept in place. Too much shifting of personnel can result in major loses of continuity.
2. All people fear the unknown. Implementing major change has a significant emotional and intellectual impact on people. Efforts must be made to eliminate the mystery and help people grow comfortable with the new system.
3. Technology can be scary stuff. Hands on efforts must be completed so that people are not only trained, but also really ready to use a new system.
4. Supervisors are people too and they often have significant resistance to change. They have the most to gain by protecting the status quo. So, extra effort must be invested with supervisors to ensure their acceptance.
5. Do not forget the maintenance people. Without them really buying in and understanding the new system requirements all progress will come to a grinding halt.

The greatest challenge with new systems is really people. Do not let this hurdle trip you up.

Hurdle # 5: Managing Expectations

A major hurdle in achieving real material handling results is in the area of managing expectations. What you expect from the system and how you will measure its success must be established. The following practices are therefore very important to ensure the managing expectations hurdle does not result in systems failure:

1. Operations people must be involved with system evolution and have a clear mental image of their jobs after Go Live.
2. Executives must understand the results that will be achieved and the timing for the realization of these results.
3. Everyone must be given realistic expectations about Go Live and the reality that there will be many bumps in the road to success.
4. Key Performance Indicators (KPIs) must be established, explained, tracked and understood.
5. Real time communications to all parties involved must be a priority, as folks who do not understand what is happening will envision the worst.

Clearing this hurdle takes time. But not addressing these practices will result in major problems. So realize the importance of this hurdle and make these practices standard operating procedure.

Hurdle # 6: Budget Conformance

Executives will expect budget conformance so there is no choice but to clear this hurdle. The major challenges of the budget conformance hurdle are:

1. Trying to do a job even though inadequate budget exists to get it done properly.
2. Selecting vendors based only upon low bid.
3. Not building adequate contingency into the initial project budget.
4. Looking only at start up costs and not life cycle costs.
5. Others trying to burden a good ROI project with their favorite pet project even though the pet has no ROI justification.

Budgeting is important and if these hurdles are not addressed the results will not be achieved.

Hurdle # 7: Schedule Conformance

Just like budget conformance, executives demand conformance with schedules. It is only by addressing the following scheduling hurdles that real results can be achieved:

1. When milestones are missed be realistic and adjust the schedule. Not doing so will result in major difficulties latter.
2. Adding more people to late projects only makes the projects later.
3. All projects have a critical path. Do not keep this a secret. Let everyone know the critical path and manage accordingly.
4. Do not try to repair a broken schedule by reducing testing, burn in, training and ramp up.
5. The earlier in a project one can get ahead of schedule they should. It is easier to beat the schedule early on.

Missing a project schedule can often have major implications with executives' view of the systems' expected results. Clearing the schedule conformance hurdle is therefore critical.

Executives expect material handling systems to result in reduced operating costs, reduced damage, reduced lead times, increased customer satisfaction, increased adaptability, improved information quality and improved safety while providing a high Return on Investment. And they expect material handling systems to be implemented on time, on budget and to achieve the results that were promised during the justification of the system.

By climbing over these seven hurdles there is a tremendous opportunity to improve the acceptance of material handling systems by executives. Following a methodical process of planning, design and implementation all the while emphasizing quality communications will net the executive support necessary for your material handling systems project to succeed. Having the right expertise, the right schedule, the right budget, the right solution and the right justification for your material handling systems will provide bottom line improvements and real results for your company.