Q&A with Experts Doug and Duane:
Q: What is ROI?
Duane: It really is as simple as how long it takes to get net value from a system. For us, that means calculating the value of a voice-solution versus a non-voice-solution.
Doug: There’s also some difficult data elements that are hard to quantify from an ROI perspective; one of them is safety. It’s difficult to get a monetary number on that but it’s something we always think about in regard to ROI.
Q: What’s something people often don’t know about calculating ROI?
Duane: The most important thing is having accurate data. Our ROI calculations are only as good as the data.
Doug: It’s just like going to the doctor. The doctor tells you, “you need to lose weight” but he doesn’t know how much you weigh! We need a starting point to develop the ROI.
Q: What factors do you look at when calculating ROI for a customer?
Doug: Accuracy measurements are a big one. What does an error cost? Often, it’s five to ten times additional cost for an error. Reducing errors can have a huge impact on the bottom line.
Duane: Right, there’s that direct cost but there’s also the indirect cost. Customer service, having to restock the item, possible lost sale if the customer goes to a different supplier, it adds up!
Q: When it comes to Mountain Leverage and ROI, what do we offer that other people don’t?
Duane: The depth of our study is above and beyond what our competitors do. As an Industrial Engineer, I take an approach and develop elemental time studies, where I break out a prospect’s picking workflow step by step, to compare their current process to an optimized voice process. We then calculate the quantitative benefit rather than apply rules of thumb. Rules of thumb can be helpful, but as we’ve learned, no two operations are entirely the same.
Doug: There’s not a competitor out there that does that level of ROI study.
Q: What’s the biggest upshot about ML and ROI to consider?
Doug: The significance of saving even just five seconds per pick face. It doesn’t seem like a lot when you look at it on the surface, but when your pickers are visiting hundreds of pick locations per shift, that adds up very quickly.
Duane: A little can go a long way. That total benefit can really build up over many, many cycles and provide you a significant operational savings percentage that leads to a strong ROI.
Doug Hopper is a Solutions Business Consultant with over 30 years of experience in supply chain solutions with focus on voice enabled workflows, warehouse management systems, transportation systems, yard management systems and labor management systems. Doug has not only deployed these systems but also has working experience and knowledge with these systems in an operational environment.
Duane Hoff is a Solutions Business Consultant with over 25 years of experience in supply chain with a main focus in distribution. In addition to his industrial engineering background, he has experience in operations management and supply chain consulting where he undertook numerous initiatives and projects where ROI was a critical component of a business case.