• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » ROI and the Elephant in the Room

ROI and the Elephant in the Room

October 11, 2007
From Supply Chain Digest

How can companies best navigate the people issues-more specifically, headcount reduction-when it comes to new automation that in the end really depends on those moves to deliver the ROI? That's the question Dan Gilmore, editor of Supply Chain Digest, posed recently. He points out that ROI is often the proverbial "elephant in the room" when it comes to implementing new initiatives and achieving the expected results turning productivity gains in a distribution center into true bottom line benefits.

It seems we are in an era now where it is relatively easy (or at least easier than in the past) to shutter whole factories or outsource large functional areas or processes, but still (understandably) very difficult to do at a more micro-level. In many cases, things are a little easier in distribution, where for lots of companies turnover is quite high, often approaching 50%.

It would seem in many cases that no one should fear automation from a headcount reduction issue, since the core group of associates that don't turn wouldn't normally be affected even if total headcount is reduced. It's also easy, in a sense, for fast growing companies. Often, investments in DC automation are not sold or justified on the basis of reducing current headcount, but on slowing or stopping the growth in headcount versus projected requirements based on expected throughput growth over some period of years. Sometimes the growth happens-but sometimes it doesn't.

Gilmore spoke earlier this year with a VP of transportation for an industrial company that had recently moved from a decentralized transportation operation to a centralized one. Each of several dozen ship sites previously had local transportation managers; now a much smaller central group was managing the whole process enterprise wide, and the efficiency gains in overhead for transportation were significant. When asked if the local transportation managers were still there, the answer was yes-but mostly doing other things, was the response.

Gilmore points out that management often dances around issues when it comes to investments in process improvement. In many cases fear or concern on the people impact has kept companies from investing in automation or technology that would reduce headcount requirements, blue collar or white collar.

On one hand, he says, it isn't right to make investments based on theoretical cost improvements that in reality never really show up on the company books; or to strongly resist clear opportunities for process improvement in this hyper-competitive market environment. On the other hand, he asks how does management keep up morale and get employees to provide the critical buy-in to the process when the end result might be a RIF for themselves or a co-worker. That's the question to ponder when dealing with the ROI Elephant in the Room.
http://www.scdigest.com

RELATED CONTENT

RELATED VIDEOS

Warehouse Management Systems
KEYWORDS Warehouse Management Systems
  • Related Directories

    SnapFulfil

From Supply Chain Digest

Import Warehouses-The Next Bottleneck in Global Supply Chains?

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • A PAINTING IN WHICH A RED HOT AIR BALLOON IS TETHERED TO A GIANT ANCHOR

    Will FTC Succeed in Banning Non-Compete Clauses in Employment Contracts?

    HR & Labor Management
  • WORKERS INTERACT WITH VARIOUS TYPES OF CARGO MOVING EQUIPMENT ON A CROWDED DOCK

    White House Urged to Intervene in West Coast Port Labor Talks

    Global Gateways
  • A MEDLEY OF GRAPHS SHOWING ZIG-ZAG RESULTS AGAINST A MAP OF THE WORLD AND AN IMAGE OF OIL DERRICKSiStock-peshkov-1316669671(1).jpg

    Bringing the Supply Chain Closer: Nearshoring Is Here

    Sourcing/Procurement/SRM
  • A WOMAN STANDS NEXT TO A BIKE, DAPPLED BY THE SHADOWS OF BICYCLE RACKS.

    Walmart is Changing the Way Its Employees Get to Work

    Sustainability & Corporate Social Responsibility
  • TWO FINGERS MANIPULATE WOODEN LETTER BLOCKS TO TURN FROM SHOWING THE WORD RECOVERY TO RESILIENCE

    A Data-Driven Approach to Supply Chain Resilience

    Technology

Digital Edition

Scb q1 2023 cover

2023 Supply Chain Management Resource Guide: Packing for a Difficult Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Holman Logistics Honeywell Intelligrated
IFM Infor Inmar
Keelvar Kinaxis Korber
Lean Solutions Group 2H Liberty SBF Locus Robotics
Logility LogistiVIEW Lucas Systems
MCA Connect MPO Nvidia
Old Dominion OpenText ORTEC
Overhaul Parsyl PMMI
QIMA Redwood Logistics Ryder E-commerce by Whiplash
Saddle Creek Logistics Schneider Dedicated Setlog Holding AG
Ship4WD Shipwell Shyft
Sourcemap Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing