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Want ROI? You Need Rationale, Organization, & Initiative

ROI. There are so many ways to measure this across a warehouse operation. What determines what's financially worthwhile, what's not, and what your time horizon needs to be to begin seeing economic value? Numbers, like forecasts, however they are presented and how much you believe in them, are just that. Numbers. They are only one consideration in evaluating a capital project, like one warehouse management system over another. 

From a more holistic point of view, perhaps we can substitute the abbreviation for “Return On Investment,” with “Rationale, Organization, and Initiative.” Because that's really what needs to happen. You have to ensure a project has the right purpose, you have the right organization to embrace what needs to happen, and the ambition or initiative, to launch and continuously improve your processes to drive results.

Rationale

So why are you considering embarking on implementing a warehouse management system in the first place? It's important to think this through properly, so don't short-change the exercise. Once you've discovered the reasons, dig down, and understand your company's modus operandi. What problems have you identified in your operations that need attention? What strategies do you believe will get you there? The better these issues are investigated and thought through, the better the quality of the decisions you can make about scoping such a project for your enterprise. Of course, the more pain you can admit to having, whether its bottlenecks preventing great customer service, competitive pressure, or lost inventory, the more you will be inspired to get going.

Being able to isolate the project's raison d'etre will make you more interested in measuring the results of your efforts and your investment. If the challenges in your warehouse are not well understood, or the magnitude of them is not appreciated by the stewards of the business (aka executive management), then I would recommend that you break down each area of the operation to see where these component parts are impacting your employee productivity, space utilization and process efficiencies.

That's the rationale taken care of. Now let's look at the Organization.

Organization

Organizations are about people. They can benefit or burden any project depending on structure, funding and capabilities. Like a truck traveling through a washboard road that's been a great byway for so many years, it finds itself needing a realignment after such a journey. Organizations also need to realign themselves to step up to the new challenges facing the business. Does the organization need to be dismantled and reassembled differently to ensure it has the right people doing the right things? 

Ask yourself – who are the champions, the change agents who will carry the torch and take one for the team to power through setbacks as they arise? These people will be vital to the success of any major project. Then turn your attention to the company's management. How agile is the old guard? Can they pivot and be flexible enough to pounce (to a reasonable degree) on opportunities in front of them? Does the organization believe in continuous learning to benefit itself, its customers, suppliers, and community?

The final piece of the puzzle is Initiative.

Initiative

Why is “business as usual” the easiest way people fool themselves into moving forward? Why is procrastination so convenient and inertia so hard to challenge?  Perhaps it's because too much time has passed, or you've made your rationale so complicated that it's fuzzy in the minds of stakeholders. Is it possible that the intent of the project has lost momentum? Sure it is. So remind yourself what the end game needs to look like, and how this will be communicated consistently through the on-going change management process. Add employee performance incentives for meeting targets if that works for your organization.

Write a note to yourself and ask, “What will it take for this project to fail?” Success means commitment. Why do most people go off their diets? It's not that they can't stick to them. It's that they won't . As with any complex undertaking like a warehouse management system deployment, the leaders and the organization itself need the patience and endurance to see the project through to completion and the commitment to sustain its proficiency in order to achieve the best ROI possible.

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