25 June 2024

Logistics efficiency measures increase labour utilisation as volume levels lift

Efficiency measures reduce labour costs at Derrimut DC as volume levels lift2

HSV’s Derrimut Distribution Centre (DC) recorded its highest outbound volume month to date in May 2024. The team fulfilled a total of 94,552 order lines or 766,000 individual items – an increase of nearly 10 per cent since its previous peak in May 2023, while maintaining a 99.7 per cent delivery in full on time (DIFOT) rate. This means our DC customers are consistently receiving timely, accurate and full delivery of their orders.  

In addition to reaching this milestone, the team also improved labour utilisation by 15 per cent thanks to new efficiency measures delivered through a program of continuous improvement.

Head of DC Operations Josh Lotter says one of the measures – a new rostering tool – gives team leaders greater visibility of forecast volumes against actual volumes for each shift, allowing them to plan accordingly to achieve performance targets.

“The tool gives us greater visibility of the labour required to meet those forecast volumes, which means we can be more proactive in our decision making. It’s about working smarter by planning and scheduling in line with activity.”

Josh says the team is also placing a greater focus on performance targets and metrics in their twice-daily operations meeting held at 8:00am and 12:30pm each day.

“We discuss our performance metrics and KPIs including an outbound group target for each shift, which equates to a certain number of lines picked.”

Another improvement the team has put in place is to ensure shift patterns align with the DC’s daily workload. Instead of a morning and afternoon shift, workloads are now split across three daily shifts to better align with customer orders. Josh says this means customer orders can be processed more quickly.

“Stock orders are being received, picked and dispatched to our customers in a more timely and efficient manner. We also have full confidence that the right stock is on the shelves waiting to be ordered,” he says.

The team is also focussing on upskilling staff to meet additional work requirements instead of recruiting new staff, which has further reduced unnecessary labour costs. This has meant training team members across multiple work areas, who can then be deployed to provide support when workloads peak.

“This has reduced the need to bring in additional resources trained only in one area such as picking and dispatch,” he said.

The above measures are in addition to those reported in April, as part of the 5S lean methodology introduced at both Derrimut and Dandenong DCs to drive continuous improvements in operations.

HSV Chief Executive Neil Rodaway said the initiatives were a great demonstration of HSV’s values, with teams being open to new ideas that deliver solutions and customer-focused results.

“All of this happens in a safe environment with clear positive outcomes that are evident to all. Congratulations to Josh and the team for leading the way”, he said.