Get Caught In
The Modification Trap
Michael D. Atherton
appeared in APICS Magazine. APICS is the American
and Inventory Control Society.
select package software systems as part of their efforts to
achieve business objectives. In the world of physical distribution the
temptation to modify a system to match a current operating environment
overwhelming. Warning: don't get caught in the modification trap.
The decision to
invest in a physical distribution system should be driven by
objectives spelled out in the corporate strategy. The strategic
drive all activities, from the decision to invest through acquisition,
implementation and , ultimately system operation. Project teams may
into the modification trap when they lose sight of strategic objectives.
elements disseminated from the strategic plan should drive the
requirements for a package distribution system. A package system will
have documents to serve as a functional specification. These may
concept manuals, user manuals, and design documents. The project team
these documents, vendor demonstrations, and even invest in a pilot
select and verify the system. The team must keep in mind at all
it is not selecting features and functions , but selecting the system
enable the firm to achieve its objectives.
that relate to logistics and physical distribution often
customer service through:
order placement inquiry and transmission
and reliable order delivery
complete undamaged damaged orders
free paper work
utilization of fixed assets to increased throughput and cube
improving integration with suppliers and
customers to increase customer value
are part of Total Customer Satisfaction (TCS) marketing
strategies and Total Quality Management (TQM) philosophies firms are
implementing. They emphasize the improvement process as essential to
competitive advantage. Improvements in the quality of
services lead to increased customer satisfaction and customer loyalty.
factors contribute to increases in market share and margins.
must focus on the corporate goals of the improvement
process. It is easy to fall back into myopia, focusing on
functions as ends in themselves. The value that customers receive
firm's products and related services is dependent on the efficiency
they're produced (competitive price potential) their inherent quality
reliability of delivery.
planning is a closed-loop process. It should incorporate the
systematic improvement of quality as the cornerstone to its success.
step in the strategic planning process is to execute the plan.
This is the
step where systems are designed, acquired and implemented. It is
in this step that project teams fall into the modification trap.
distribution has the potential of being a bottleneck for the
delivery of the highest quality products in the marketplace. How ironic
many firms invest in improving product quality but cannot get those
customers efficiently, accurately and on-time. Increased costs
customer service in physical distribution can erode value both in terms
and service. Many firms have identified logistics, specifically
distribution, as a primary element of competitive advantage. If
justification for investing in a physical distribution system is
advantage in price and service, why modified a system to match an
is not achieving those objectives? The acquisition of a physical
distribution system is an opportunity to reevaluate all procedures,
and systems for their contribution to customer value and the firm's
provide many benefits. They're fully tested and implemented
systems, which reduces project risk. They possess broad functional
for achieving the existing objectives and satisfying future
Package systems also cost less than customs systems and have a shorter
implementation life cycle, thus providing a higher return on investment
shorter payback period. Furthermore, vendors provide support,
development and implementation services.
are designed to accommodate a wide variety of distribution
requirements across diverse industries, while enabling the user to
best practiced functionality such as:
and random locations
for worked stocking locations
and picking verification
creation and verification
The systems are
configurable to unique environments and make the benefits of
best practice functionality available to the user. Many project
into the trap by specifying and modification and system procedures that
make a package system fit their "unique" existing operations. A
project team can quickly dilute the benefits of a package system if it
keep objectives in the forefront during each step of the project life
cycle. Take for example the project team whose operation manually
product into available locations and then marked the locations on a
at the end of each aisle. The corporate plan in part called for
a physical distribution system to:
- Maximize spatial utilization to a naval
facility consolidation across divisions
- Improved inventory accuracy
- Eliminate the expense of expediting and
- Implement cycle counting to eliminate and
expensive for a day full physical
distribution systems do this by consolidating product into locations
until they are full. The system issues putaway tasks and
verify the tasks have been completed. With directed Radio
technologies the material handler confirms the placement of product in
location in real-time. Strict operating procedures and
picking with verification eliminates the need for expediters.
The design team
wanted to continue putting material away manually, then tell
the system where it had been put away. The chalkboard would be replaced
system's location database but because they would not be using system
locations for directed putaway, the system could not maximize cube
utilization. A corporate objective and an element of the
justification would not be achieved. Fortunately, a design review
brought this out and the project team stuck with baseline functionality
enabled it to achieve the original objective.
Focus on that
project teams first review corporate strategic objectives. If the
logistics strategy is defined in the plan, the team reviews it.
If it is
not, the team develops its own pace on the corporate plan.
Next, it reviews
operations and determines requirements for meeting
objectives. This leads to an operating plan.
Finally the team
evaluates distribution control systems based on the
operational requirements that will enable the organization to meet its
that fall into the modification trap do so because they review
their current operations and then specify a functional
Their evaluation identifies the system and modifications that most
closely match their
process does not identify the system that enables the firm
to meet its strategic objectives. Project teams must be vigilant and
that there is no benefit in systematizing an operation that is not able
meet strategic objectives.
fall into the modification trap by writing a detailed
specification for the "perfect system." It narrates in great
exactly how the system should work. The magnitude of modification that
from this type of specification usually leads to very high cost, added
complexity, confusion, delay and dilution of the benefit of
When to modify
The project team
should select a physical distribution package based on the
baseline system's capacity for achieving strategic objectives. Once the
has been identified that supports this, modifications should be
specified only to the extent
that they contribute to meeting those objectives.
modifications and enhancements include changes to comply with specific
industry standards, customer requirements, and government regulations.
provides the core of the system. The modifications close any
between baseline functionality and the implemented system's capacity to
the firm to achieve its objectives.
If you have
questions, please click here to email Mike
Atherton or call him at 703-486-8497