– Supply Chain Insight –
Simplify your next site activation with this 6-point checklist
New site activations are among the most costly (and most impactful) projects warehousing and distribution professionals can undertake in their careers.
Along with many other things, a new site activation is a sign of organizational growth and should be an exciting time for all involved. Unfortunately, the feeling of excitement and new beginnings can quickly turn to stress – or outright panic – if things start to go awry. If you’ve ever been a part of a new site activation – whether it was a brownfield or greenfield build – you know what I’m talking about.
You also know that, if things do start to go south, you usually won’t notice until the later stages of the project, when the rubber hits the road so to speak. Unfortunately, by then, it’s difficult to course correct and priorities often shift from “getting it done right” to just “getting it done”.
If you follow our LinkedIn page, or have visited our blog before, you’ll be familiar with our Fishbone Friday continuous improvement series. The driving force behind the series was to provide root-cause analysis for some of the biggest and most impactful challenges faced by warehousing and distribution professionals today. Naturally, a new site activation was among one of the first topics covered. When it comes root-cause analysis, while extremely important, it tends to be a reactive measure taken once certain symptoms are noticed that could point to a larger underlying issue i.e., a small but consistent decline in direct labor productivity, or increased instances of capacity constraints.
Sometimes you do need to notice symptoms before you can start to address any underlying issues. However, when it comes to new site activations, while we created the Fishbone Friday diagram the same way as any other, we don’t recommend that you use this one reactively. If you’re using it reactively, it’s too late.
It’s in this line of thinking that we created a site activation checklist based on all of the potential root-causes for a sub-optimal or failed site activation. We hope the following checklist serves to help you avoid some of the more common and costly mistakes faced during these projects.
1. Leadership & direction
With any project, proper leadership, goal setting, and direction is paramount. This is especially true for new site activations. Whether it’s a full greenfield build or a brownfield retrofit, design and activation projects (done properly) can take over a year of consistent work and can involve multiple teams, skill sets, and personalities. Due to the lengthy and detailed nature of these projects, it’s critical that the direction is set from the beginning and that all project personnel are fully aligned on the budget, timeline, process, tools, and, of course, the end goal.
2. Skills & tools
Unless your organization is in hyper-growth mode or a recent merger or acquisition has prompted a network consolidation initiative, it’s likely that a site activation is a rare occurrence and your internal resources are relatively inexperienced in carrying out this type of project. If this is the case (and it is quite often), don’t be hesitant to leverage third party expertise – whether in the form of consultation, data analytics or even specialized tools – and be sure to do it from day one. Making the decision to bring in a partner once things start to go south means they’re there for damage control and nothing else.
3. Data-driven conceptual requirement planning
Whether you choose to leverage third party expertise or not, every site activation project should begin with a deep dive into any and all relevant – and validated – operational data. We get that the market is tough in some geographic areas and that options may be slim but, if you can help it, do not commit to a lease, equipment, or anything else until you understand your requirements. The only thing worse than making concessions on day one is having to make them consistently throughout the term of your lease. Spend the time up-front to understand your requirements, and be sure to rely on your data, not assumptions based solely on experience.
4. Connected detailed design
Having been around numerous new site activations and through multiple processes audits and even more conversations with analysts and operators, this is often the biggest point of disconnect within an activation project. There are two primary reasons for this: the process itself is disconnected, or the teams are disconnected.
A disconnected process often means that the conceptual work is done but there’s nothing actionable that can be used to guide the detail design, either because of a lack of data or lack of trust in the data. Sometimes conceptual work is done so far in advance, by the time it comes to applying it to the final design, it’s mostly irrelevant, or being loosely adapted by a different team that may or may not agree with how it was put together.
When it comes to disconnected teams, this is more in reference to a potential disagreement in methodology, usually between analysts and operators. Conceptual work should be backed up with a sufficient amount of analysis showing proof of concept. It should take into account potential constraints, and leave little room for interpretation.
5. Simplified implementation
It might seem contradictory to see these two words paired up, but let me explain. Implementation is where the rubber meets the road, so to speak. If any corners were cut or erroneous assumptions were made during the conceptual design and requirement planning process, this is where you’re going to find out, unfortunately. It’s also the worst possible time to have a wrench thrown in your plans because even when an implementation goes smoothly, it’s a major disruption to the operation. So, when I say simple, I mean keep it as simple as possible. At this stage of the game, you should be carrying out a previously designed implementation plan step-by-step. This isn’t the time for additional decisions or re-work. Keep it simple and keep to your plan.
6. Maintenance / growth plan
A maintenance / growth plan isn’t typically a part of a design and activation project, though I would argue that growth projections and scenarios should be taken quite seriously when planning requirements for a new build. This isn’t just when it comes to being as accurate and granular as possible in your projections but it’s also important to plan how you expect your layout to change over time based on changes to your requirements – we usually recommend creating a few different requirement scenarios to cover all of your bases.
The other part of this is consistent maintenance, starting from day one. If you implementation / mass slotting goes according to plan, your site should be fully optimized but it won’t stay fully optimized for long unless there is a maintenance plan in place. Through changes in SKU variety and fluctuations in shipping volumes, even after a period of a few weeks, your optimization level will drop considerably and will likely continue to drop in a linear way until a maintenance process or tool is put in place. This is important to know as, most of the time, conceptual design ROI’s (especially if there’s mechanization or automation involved) are usually calculated annually. Without an effective maintenance plan in place, you’ll be lucky if you maintain 50% of what you had expected, potentially doubling your ROI.
If I can leave you with one more piece of advice, I will draw on an old carpentry proverb that’s never steered us wrong: