As described in The VUCA Warehouse, we need to balance personnel flow and material flow very well in order to manage the VUCAs better and thereby increase operational excellence.
Successful planners start with strategic, long-term personnel planning derived from the respective budget and business goals. From thereon, they refine it down to the level of the daily operations.
Strategic Planning - Capacity Plans
Strategic Planning starts top-down from the business needs and KPIs of the respective company. The main question is: How many pieces of article XY are we going to sell over the planning period (next months or year(s))? This information typically comes from marketing- and sales forecasts or production forecasts. From this forecast, we derive the number of people we will need to run our warehouse. It results in a capacity plan. There are various limiting factors, like the budget approved for the respective period. Strategic planning involves various stakeholders like general managers, supply chain managers, operations directors, sales management, and procurement. Those stakeholders make up the strategic planning team and meet regularly to adapt the rolling strategic capacity plan.
The capacity plan gets broken down into smaller planning periods: quarters, months, and weeks. Changes to the capacity plan are usually done only by the strategic planning team because they involve profound business KPI knowledge and have many consequences and side effects.
Tactical Planning - Rosters
Tactical planning translates the “anonymous” number of people of the capacity plan to real people, in other words, to a roster. The roster assigns people to shifts over several weeks. A shift is a recurring sequence of days and time slots per day, e.g.,
- Morning shift: Monday to Friday, 6:00 to 15:00
- Late shift: Monday to Friday, 15:00 to 24:00
Shifts can repeat in rolling cycles; an employee might work the morning shift one week, the late shift the week after, and so on.
Operational Planning - Keep Your Balance
While strategic and tactical planning are proactive by nature, operational planning is proactive and reactive.
The first step of operational planning is to amend the roster with workstation or area information: Which warehouse operative will work at which workstation (or in which area) and in which shift? This is the proactive step. The period we look ahead into the future depends highly on the kind of business. We might assign people to workstations just for the next three weeks, or we might assign people to future peak seasons.
Even if we plan proactively, we know that the warehouse remains VUCA. The best plan cannot prevent numerous reactive changes throughout daily operations. To keep VUCA in check, we need to
- coordinate the incoming goods very well: We need to know exactly which day and when a truck arrives.
The delivery information in ERP systems is usually not exact; it is just an indication of incoming goods.
That's we need a really good and integrated goods-receipt-planning. As soon as delivery dates change, we potentially must react and change the roster and shift plan for the affected week.
- predict the expected load per hour and workstation, e.g., "at 10:00, we will need 25 people at picking."
- adjust the predictions based on changing conditions (a customer places 10,000 additional orders, five trucks are late, ...)
- rotate people between workstations quickly in case of changes.