How to Get the Go-Ahead

Project Approval Plan Revealed
This article serves as an introduction to the ROI justifucation topic. Over the next months future articles will reveal steps you can use to develop a solid project ROI implementaion plan. This overview was submitted by Loyola Marymount University's business school.

Project justification creates a logical and strategic business case. Project justification borrows from formal logic to create a model for building a factual, logical, and solid business case. Millions are spent on bad projects that were financially well-justified, but had a very weak business case and was not thoroughly reviewed. Project justification is a quick, repeatable process that should be required with every financial justification. Management benefits from a standard logical model to evaluate each project’s business case. Project sponsors gain by using a single logical model to illustrate the merits of their project. Instead of a plethora of individually styled business cases, project justification is the standard that internal and external approvers can quickly understand and evaluate.

What are the steps?

Define the strategic objective that you want to achieve and the success metric for that objective. A strategic objective is to improve your order fulfillment process to better serve your clients. “Our process needs improvement” is too broad to be a strategic objective. The objective should also be a logical extension of the organization’s strategy. A success metric for the objective is lowering order fulfillment pick times.

Given the strategic objective the relevant external and internal factors need to be considered. First, list the external and internal existing forces that impact this objective. Then state potential changes that could sum to create an approach to address the objective.

Conclusion

Project Justification works best where an organization needs to quickly select projects and decide where to invest resources. If being right the first time is becoming a requirement then you should use a disciplined approach to the analyze project’s financial justification and project justification business case.

You Do That?

Interlake Describes the Bolted vs. Welded Debate
The following is an excerpt from an article published in Material Handling Management.

Both technologies are effective for building racks. Preference and price are the determining factors in the buying decision. Which is better when constructing racks: bolting or welding the side braces to upright columns? It's a simple question that sparks a surprisingly emotional debate about the best construction method. North American companies prefer welded racks, while bolted rack is used by Europeans and most of the rest of the world. There are many factors that need to be considered. The short list includes customer acceptance, cost, material, and safety. Each fastening technology has its advantages and disadvantages for manufacturing, shipping, installation, and material usage. The key for companies is to use the fastening method that best meets their needs and budgets. Perhaps the most pressing question is: Are customers buying into the idea of using bolted rack? Some of them seem to be. Today's high fuel prices and other costs are giving rack users new reasons to consider bolted rack.

Customer Acceptance

Increasingly, decisions about the type of rack to purchase are no longer driven by which fastening technology is "better." Cost is the big battle in the welded vs. bolted debate, says, Jim Green, president of Interlake distributor, Morrison Company (Willoughby, Ohio). His customers tell him, if the rack holds product like it is suppose to, they don't care how the frame is built. Green, who has sold welded rack for the past 35 years, admits that it took awhile for both himself and his distributors to accept bolted rack, but not his customers. His company is currently working on its fourth bolted-rack installation. It only started to sell bolted rack in February of 2006, when it was first introduced by Interlake Material Handling (Napersville, Ill.). Green speculates that another reason why bolted rack is starting to be accepted in the United States is that companies like Wal-Mart, Target, Home Depot and CVS are installing European-manufactured rack-supported ASRS systems. These systems are structured around secure bolted racks that can reach heights up to 100 ft.

In April, Interlake became part of United Fixtures Holdings (North Bend, Ind.), a storage rack and vertical carousel manufacturer. Over the years Inter-lake has continued make the transition from welded to bolted rack, which will complement United Fixtures Holdings' other rack brands, National Store Fixtures and Monarch.

Interlake's two U.S. plants in Pontiac, Ill., and Sumter, N.C., now produce bolted rack. Its plant in northeastern Mexico that serves Central and South America, has not yet been converted. United Fixtures has a plant in Mexicali, in northwestern Mexico. In the future, Interlake says it may use this plant to supply California and the Southwest United States. "There are a lot of synergies between our rack companies," says Vincent F. DePaola, manager retail sales, Interlake Material Handling Solutions (Naperville, Ill.). The clients for both companies are DCs and warehouses. What's more, National Store Fixtures, DePaola explains, "handles retailers, like Home Depot and Lowe's, which is an area where we don't have much of a presence."

Questions about a pending storage rack project? Select contact us.

Operations Best Practices

Hiring Strategies at Distribution Centers
As all employers quickly learn, there's a world of difference between a worker who's correctly matched to their job and their organization, and one who is not.

But how do you find and match the right people to the right jobs? By including, in your comprehensive people strategy, a well-structured recruiting and selection program. The key to successfully developing such a program is to follow a proven recruiting process for the positions you need to fill. Resist the temptation to omit steps, because shortcutting the process can shortchange your results. Here's what you'll need to do:

1. Compile a "success profile." In addition to creating job descriptions, it's important to develop a "success profile" of the ideal employee for key positions in your company that are critical to the execution of your business plan. These might include such positions as team leaders and shift supervisors. For example, let's say you currently have 20 team leaders. Within that group, you have four that are top performers, 12 that are middle-of-the-road and four that aren't quite making the grade. If you could bump the number of folks in the top group from 20 percent to 33 percent, that could have a dramatic impact on your company's performance.

2. Screen candidates by phone. Once you've narrowed your stack of resumes to a handful of potential applicants, call the candidates and use your phone-screening questions to further narrow the field. Using a consistent set of questions in both this step and your face-to-face interviews will help ensure you're evaluating candidates equally.

3. Assess your potential candidates for their skills and attributes using a proven assessment tool. A resume and phone interview can only tell you so much about a job applicant, so you'll need a dependable assessment tool to help you analyze the core behavioral traits and cognitive reasoning speed of your applicants. For example, a good test will provide insights as to whether the individual is conscientious or lackadaisical, introverted or extroverted, agreeable or uncompromising, open to new ideas or close-minded, and emotionally stable or anxious and insecure.The success profile you created for each position will help you determine which behavioral traits are important for that position. For example, you would expect a successful shift supervisor to be extroverted. On the other hand, someone filling a clerical position might be more introverted.

4. Schedule and conduct candidate interviews. Once you've selected candidates based on the previous steps, schedule and conduct the interviews. Use a consistent set of 10 or 12 questions to maintain a structured interview and offer a sound basis for comparing applicants.

Before you start the hiring process, determine your strategy relative to how people fit into your organization. What is your process for making sure they're a good fit with your company's culture? Decide whether your approach to the cultural question should include a second interview. Also, who else, if anyone, do you involve in the interviews to help make this selection and judge the candidate? Your goal is to have a plan that will help you determine whether you have a qualified applicant who will fit into your company's culture.

In addition, decide whether you're going to conduct pre-employment testing. How much is it worth for you to know an individual's strengths and weaknesses, not just as a hire/don't hire test, but as a coaching tool to help you determine their training needs and the best approach to maximize the person's productivity? Pre-employment testing is often overlooked, when it could be a very valuable tool. For example, if you find an applicant who fits the job description and appears to be the person you want to hire, pre-employment testing can help you determine how to work with them more effectively and move them along in your organization.

If you want your business to attract and retain good clients, your comprehensive people strategy must include a recruiting and selection strategy that attracts and retains quality employees. Following a well-thought-out, structured process will help you best match the right people to the right jobs in your company.

Industry Trends

Property Opportunities in Today’s Varied Markets
This articles was provided by CRESCO Real Estate, A Member of the Cushman & Wakefield Alliance.

A common concern in a slowing economy is that company decision makers will put their business expansion plans on hold; therefore sending the real estate market into a tailspin. In a cautious market deals are still prevalent; one just has to be more creative in the approach. As long as activity is not stagnant, real estate deals can be made. One company’s consolidation or closure can potentially open the door for another firm to purchase or lease the facility which may not have been available or affordable in the past.

The days of placing a real estate sign on the front lawn and waiting for the buyers or tenants to line up are no more. Today’s approach starts with interviewing the property owners to get a comprehensive analysis to understand their goals and review the facility’s attributes. This analysis is important in making recommendations as to what would aid in the marketing process and arriving at a fair market value. It is very important to assure that the property shows well and CRESCO Real Estate encourages owners to undertake immediate improvements to their properties such as painting the warehouse walls white, professionally cleaning the concrete floors, replacing burned out light bulbs, removing tired carpet from the offices, and general interior and exterior clean up. Surprisingly, many owners overlook the importance of the first impression their property portrays. It is proven that properties, which appear to be well maintained lease or sell more quickly and closer to asking price. Making excuses for a maintenance item that should have been corrected is not a proper introduction on a first-time property tour. First impressions are the lasting impressions.

In a higher vacancy market, a property owner needs to distinguish their asset from the others. Market exposure is critical and can be achieved by mailers, brochures, print advertising, open houses, Internet postings, virtual property tours, cold calling and canvassing. CRESCO Real Estate continually stresses the importance of market knowledge as being instrumental, knowledge not just about the active prospects, but of the types of deals being offered on a daily basis. The market is what will dictate the overall economic package and without a full understanding of the applicable deal terms, a property owner may sit on their vacancy for a long time. This is usually due to waiting on a deal that is just not realistic in today’s market.

Remember, anyone can get lucky in finding a prospect for his or her available real estate, but having the skill to conclude the deal is what ultimately generates the cash flow and rights the course of your portfolio.

CRESCO Real Estate would welcome the opportunity to assist your organization. Our professional services include:

• sale and leasing of commercial/industrial property
  
  
• tenant/buyer/landlord/seller/representation
  
  
• land assemblage
  
  
• location and incentive analysis
  
  
• development
  
  
• property valuation
  
  
• consulting services/strategic advisory
  
  
• property management
  
  
• research/surveys
  
  
• build-to-suits