Magazine Article | January 1, 2002

Where's Your Weakest Link?

Source: Innovative Retail Technologies

Your employees are just as important to your supply chain as the hardware and software systems you install. Make sure humans aren't the weakest links.

Integrated Solutions For Retailers, January 2002

It is always beneficial to see technology implementations in action, so in preparation for this month's cover feature, I visited the American Eagle Outfitters distribution center (DC) in Warrendale, PA. As I walked through the facility, the retail supply chain appeared before me, threaded on yards of conveyors twisting and turning over multiple levels of the DC. The conveyors began and ended at trailers that linked the DC operation to its endpoints - suppliers and stores. I was there to see how technology made the shipping and receiving processes more efficient, but I realized that machines and software are not the only joints that connect the infrastructure. The unsung links of the retail supply chain are employees. In the end, your technology investments are only as good as your employees' ability to use them.

Technology Ignorance Is No Excuse
As part of the generation that grew up in a hi-tech world, I admit that I am stubborn when it comes to training myself on new gadgets. When I first got my cellular phone, I didn't read the manual. I just played with the buttons until I figured it out. Consequently, I'm probably not getting the most out of my technology investment simply because of my own ignorance. Some companies that install technology without taking the time to conduct proper training are guilty of the same mistake on a much larger and more expensive scale.

I even see it here within my own publishing environment. We work with a contact management application to track our interactions with advertisers and analyst firms. When we upgraded our $200,000 software last year, I sat in a training session that lasted three hours and focused on many sales functions rather than how an editor could make use of the system. The software has powerful capabilities when it comes to relationship management, but I simply use it as a glorified Rolodex. Would your employees say similar things about your latest CRM (customer relationship management) or SFA (sales force automation) implementation?

Make Training Costs Part Of The Job
American Eagle spent more than a year planning for its WMS (warehouse management system), and to its credit, one major part of the preparation was focused on people power. When the retailer upgraded its facility, it recognized that 75% of current jobs would change. But instead of burdening DC managers with training responsibilities on top of their already taxing jobs, American Eagle appointed one of its key operations directors to all issues regarding the installation. This proved to be a wise decision in a business world where people are often expected to juggle multiple jobs at one time while never really succeeding at any of them. Committed to success, the retailer ate the additional costs of holding training sessions during off-hours and on weekends to prepare its employees. Michael Fostyk, VP of distribution at American Eagle, remarked that the success of the technology implementation stemmed from its training team, which ran sessions for three months before flipping the switch on the new system.

In hindsight, the only thing Fostyk would have done differently was to allow his employees to fix errors during the training sessions without intervention from software experts. Built-in glitches during training would have better prepared employees once the system launched. Overall, the installation proved worthwhile as the retailer broke shipping records in the first week and was able to eliminate the third shift from its operations. In addition, Fostyk said the DC is better able to handle fluctuations in demand, like those it had to face in the fall, because the cross-trained staff can work in multiple areas of the facility.

With so much talk about how technology can improve efficiency and eliminate jobs, keep in mind that until machines are walking the DC floor, people will always remain a major link in the supply chain process.