This is part six of Shifting Profit Drivers, a periodic collection of essays.
The first hour of the workday is often referred to as the “Golden Hour” by Operations Department managers for good reason: if you don’t get it right the first hour, the balance of the day will likely go downhill from there. An apt analogy is that a busy highway’s traffic will be still be stop-and-go for hours after an accident is cleared.
To have the deliveries out of the door as promised during the first hour (and all other hours of the day, for that matter) requires adherence to a reasonable set of rules. I refer to these as the non-negotiables. The list is short but critical for accurate, on-time deliveries:
- “A” and “B” items can never be out of stock.
- The address for every delivery must be accurate.
- Delivery times are promised by only one person and cannot be overridden without approval by the highest level of management at the local level.
- All orders must be checked for accuracy.
- For first-outs, either:
- All orders must be pulled the day before, and all other deliveries are pulled and staged before the assigned truck returns to the yard; or
- Loaders must come in at least a half hour before the drivers on the morning of shipment and prepare the delivery.
One more thing: No add-ons—and I mean zero. Last minute add-ons are the number reason the first hour is not golden.
The mindset in our industry is shifting from “we got the order, so the heavy lifting has been done” to “we got the order, so now the heavy lifting begins.” After interviewing hundreds of builders about their experience with all types of suppliers, 100% say that the most important aspect in a supplier relationship is to “get my material to me when you promise it.” What they are saying is, “You are in the freight delivery business, and you need to get it right.”
We have just completed spring roundtable meetings, and it was interesting to see dealers’ annual total dollar delivery range from less than $400,000 per delivery truck to over $2.5 million per delivery truck. Dealers on the lower end of production did not have a clear response when asked, “What is your truck-on-yard time goal?” Those on the higher end of production responded between 11 and 20 minutes.
To measure and ensure that this is actually happening, dealers are using many tools. They range from high-tech devices employing geo fencing to low-tech ideas such as having their drivers punch a time card each time they enter and leave the yard.
In all cases, though, non-negotiables are key to every hour being a Golden Hour.
Previously in this series:
1. Want Higher Profits? Start Thinking More About Logistics.
2. How Efficient Is Your Operation? Find Out With These Benchmarks.
3. Lots of Dealers Drive Trucks Until They Collapse. That's Wrong.
4. Errors Cost You 10 Times More Than Doing Things Right. Here's How to Reduce Errors
5. Most Dealers Can't Tell You How Much It Costs to Serve a Particular Customer. They've Been Sucked Into a Black Hole