What is worse than not doing a manual serialized CPE reconciliation in the middle of the summer? One answer is, scheduling a manual reconciliation during the 2010 World Cup. It is difficult enough to get people to show up for work on the dog days of summer and even harder when there is a major distraction waiting in an air conditioned room.
The top 5 reasons why cable warehouse managers should not schedule a manual reconciliation especially during the 2010 World Cup are:
- A manual reconciliation can take a few days to a week or more. Unless reconciliations are done at night, this will conflict with World Cup games being shown on cable. Soccer fans have a worldwide history of not showing up for work during game times. Your reconciliation will take even longer.
- One week of unbearable heat and humidity in a hot warehouse doing a mundane task is not good for employee retention.
- Paper curls in high humidity, sweat drops can distort numbers on printed forms making numbers unreadable. This results in higher error rates, additional rework, and more time wasted performing unproductive work.
- No one wants to work the top shelves where the heat can be 20-30 degrees hotter. This may result in unsafe working conditions and substantially higher errors.
- Because doing a manual CPE reconciliation is a waste of time if the object is to reduce CPE loss or have accurate inventory CPE counts.
Cable Leader SETS is a Better Alternative
What is your summertime CPE inventory count could be done in just a matter of hours, scheduled between games if necessary, provide a serialized CPE reconciliation and also give you accuracy never before achieved using a manual counts inventory? Sound good? Now what if the same serialized CPE, could perform container reconciliations and most importantly interfaced with the three major cable billing systems (ICOMS, CSG and AMDOCS). The answer is it can with, WinTrack® SETS, the only cable warehouse management tool specifically designed for cable operators.
Implementing SETS enables more effective management of CPEacquisition, storage, maintenance and life cycle. This enhances the ability of MSOs to reduce capital expenditures and operating budgets associated with CPE management. SETS accomplishes these goals by:
- Reducing CPE Loss: Serialized reconciliations are far more accurate in identifying CPElocation as well as identifying missing, damaged or lost CPE. This is because they make use of CPE barcode technology for scanning and tracking purposes.
- Reduces labor costs: Serialized reconciliations are performed using rugged handheld devices sharply reducing paper trails and reducing the reconciliation process to a matter to hours by scanning barcodes.
- Reduction of Capital expenditures: Since reconciliations will only take a few hours, they can be performed monthly, providing greater inventory control and planning. Capital expenditures are reduced as less inventory is need on hand to meet demand.
The intangible benefits are of course that fewer warehouse staff will be absent as a result of the 2010 World Cup and time spent scanning the top shelves for CPE inventory is greatly reduced. Lastly, reconciliations are no longer a waste of time but rather they become integral components of a successful MSO cable company. If you liked this article you may also like:
This is the third and final part of How To Justify a Cable Warehouse Management System. Part I covered how to get your head in the game and make a plan. In Part II, we discussed why you need to identify in detail where your operations are suffering or need improvement. In this final post of the series you will learn the basics of putting together the numbers to make your case for change and better CPE management.
It's All About Cable Warehouse Numbers
In order to make a case by the numbers for your cable warehouse operations you must know your current productivity measurements, CPE loss numbers, the time spent on non-productive tasks such as reconciliations and your current overhead expenses such as forms or HVAC. Lets take a look at obtaining the three basic but major expenses in a cable warehouse operation:
- CPE Loss: CPE losses are simply the costs of the number of units unaccounted for or damaged. This number can be ascertained from the reconciliation results.
- Warehouse supplies and expenses: This is the amount of money spent on forms, clipboards, plastic wrap, etc. as well as the amount of money it costs to operate after regular scheduled hours.
- Labor Costs: Labor costs are slightly more difficult to obtain because they need to be broken down into several key sub-areas. If these numbers are not available then measurements should be made to obtain. For example:
- How many man-hours are required to do CPE reconciliations and what is the frequency (monthly, quarterly, annual) of the tasks?
- How many times is the same piece of CPE serviced (repaired or tested)
- What is the total number of truck rolls per client. Each time the truck rolls out there is a labor and a fuel cost. What is your average trip cost?
- What is the total time required for CPE to go from received at the warehouse to issued status. This includes all the time spent waiting for action at bottlenecks, redundant actions and the time spent on filling out forms or checking paperwork. If the number is unavailable then measurements should be taken using an average worker on an average day. The concept is to approximate the average amount of time for the CPE to be processed.
It should be noted that each warehouse is different with unique managers and issues. Therefore, the preceding list should not be considered as the only numbers to consider. The key is making sure you have identified the weaknesses in your operation so that they may be fixed with a combination of automation and better CPE management tools. In case you are wondering why you would want to expose the faults in your warehouse operations I can say trust me when I say to you it is better to admit weakness and work on solutions than to wait for senior management to ask you why you did nothing to fix the problems. When that conversation starts you have already lost.
Analyze the Impact of a Cable Warehouse Management System
For some cable warehouse managers analyzing the numbers is the fun part. However the key is to make a case for your operations. With this in mind it is good to make a chart of some kind to picture the potential impact of a new cable warehouse system. One method is to make a small table showing the current situation, the costs, the projected savings and the difference.
For example (numbers are fictional examples and not a promise of savings)
Assuming an average rate of $25 per hour (fully loaded), 2080 hour/year
| Expense Item |
Current Annual Costs/time |
Projected Costs with WinTrack® SETS costs/time |
Annual Savings |
| Overtime |
a |
b |
a-b |
| Average Truck Roll |
1.15 x $30 per trip x # of trips = d |
1.05 x $30 per trip x # of trips = e |
d-e |
| Inventory/Reconciliations |
20 ppl x 80 hours x $25/hr = $40,000 |
20 ppl x 4 hours x $25 = $2,000 |
$16,000 if done monthly |
| CPE Loss ratio |
7% overall, 4% warehouse |
6.5% overall, 3.5% warehouse |
.5-1% (whatever number this is) |
| Overall labor Costs |
q |
q x .85 (assuming 15% savings) = r |
q-r |
| Totals |
xxxxx |
yyyyy |
xxxxx-yyyyy |
Once your key savings numbers have been calculated and charted, it is time to create a PowerPoint presentation of 8-12 pages that states your case for purchasing a Cable warehouse management systems such as WinTrack® SETS. Document all your key assumptions and critical risks for backup. When this is done it time to get in front of the big dogs.
Share with us your questions or problems in making a case for purchasing a Cable warehouse management system to help your operations.
Related articles
When acquiring mobile handheld technology, price is not the most important decision factor. Purchase managers will want to evaluate the costs associated with durability, reliability, ease of use/training, as well as ongoing maintenance over the entire
asset lifecycle for each handheld device. Together these factors help make up the Total Cost of Ownership (
TCO). The
TCO for some products can be 3-10 times the original price making it very important to ask the right questions during the planning stage.
The top influences for determining the
TCO include:
- Durability. Durability covers the likelihood that an item will break as a result of motion, too many moving parts, temperature extreme and quality of design for the task at hand. Each time an item breaks there are costs associated to replace as well as downtime. Purchasing managers should look at external casings, design and susceptibility to changing thermal conditions.
- Reliability. Reliability issues include battery life, software stability, how often is technical support needed and at what costs. Examples include the amount of downtime due to battery recharging, bugs in the software and technical support issues.
- Ease of Use/training. Often an underestimated expense, it is important to understand what type and how much training is required to operate the device.
- Technology platform. There are two major components to evaluating the technology platform. The first is making the proper efficiencies are being provided by the technology. This may include a touch screen or ease of mobility. The second component is making sure the operating platform is in series and not going to be obsolete with replacement or new devices. Equipment should be easy top track and maintain and not worry about which device has which features or operating system.
Consumer versus Commercial Products
To get a better idea of how
TCO should influence purchasing decisions let us take a look at the
TCO for operating handheld devices versus competitive offerings in the cable industry.
Example 1 - Cable Industry, MC9090 versus tethered scanners. Primary goals are to scan CPE inventory, asset tracking, perform serialized reconciliations.
|
Price Range |
Durability |
Reliability |
Ease of Use |
Technology Platform - mobility |
Technology Platform - stability |
| MC9090 |
$1500 - $5000 |
great |
great |
great |
unlimited |
stable |
| Tethered Scanners |
$150 - $ 2500 |
fair-good |
good |
good |
limited |
stable |
The key to successful integration of handheld technologies is to understand how the devices will be used over the entire lifecycle of the product. Commercial products such as the Motorola line are designed to be very durable but also to work with specific application software. Consumer products although cheaper on the initial buy have less flexibility with regard to true mobility (tethered products), battery life, memory capacity and stability. In addition, consumer products will more likely have to be replaced more often as either a result of failure or changing series. For example, the MC9090 has been used for over a decade and can be supported almost indefinitely.
Mintek strongly recommends the MC9090 for its proven longevity and durable within the cable warehouse industry. Share with us your thoughts on using handheld devices.