Materials handling professionals in the retail sector are focused on keeping costs down and managing company growth. To accomplish these goals, they're reducing labor, scrutinizing inventory levels, investing in software and making continuous improvement a top priority.

These are some of the findings of a recent survey of Modern readers who identified themselves as part of the retail industry. This survey is the sixth and final in a series of surveys we've conducted this year over a range of industries, asking readers to identify the practices, issues and metrics most important to their operations.

The surveys have revealed remarkable similarities among our readers. Whether working in retail distribution or automotive manufacturing, materials handling professionals have largely the same goals and concerns and measure their performance in much the same way. Variations do exist, however, among different industries.

When it comes to important issues facing their operations, our readers in the retail industry joined readers in every other industry in ranking cost containment their No. 1 concern.

“The cost we're always chasing, obviously, is labor,” says reader Glenn Broderick, director of retail distribution for clothing retailer J. Jill. Crossdocking cases and installing pick-to-light technology have helped him avoid adding labor, he says. Electricity and packaging are other costs Broderick says he's working to reduce.

Greg Vandergriff, distribution center manager for Beauty Brands, also cites labor and packaging as costs he aims to contain. He says he's fighting labor costs by implementing engineered labor standards for workers, and he reduced packaging costs by switching from corrugated cartons to returnable plastic totes for shipments to stores.

Surveyed retailers ranked company growth as their No. 2 concern, placing more emphasis on that issue than did readers in any other industry. This focus on growth appears to be well founded—84% of readers in the retail industry said they expect company sales to increase in 2007, a greater percentage than in any other industry.

“We average six new stores per year,” says Beauty Brands' Vandergriff. To accommodate that growth, the company recently built a new central DC with three times the space of its old DC. The new facility, says Vandergriff, employs pick-to-light and other paperless technologies that have doubled throughput.

J. Jill's Broderick says he's also adding capacity to keep up with retail store openings and with growth in direct-to-consumer orders from catalogs and the Internet.

While not every retailer is growing at the rate of Beauty Brands and J. Jill, retail distribution is an exciting market today, says John Seidl, a supply chain specialist at retail consulting firm Kurt Salmon Associates.

If retailers aren't building new DCs to keep up with growth, he says, they're likely upgrading DCs to accommodate new channels (such as online sales) or consolidating them as a result of mergers and acquisitions. “Technology providers and practices like ours are very busy right now,” Seidl says.

When asked to identify the metrics important to their operations, our readers in the retail sector placed shipping accuracy, inventory accuracy and on-time shipping at the top of their lists—just as readers in the other industries we surveyed did. Where retailers differ from other readers is in placing greater emphasis on measuring inventory levels and less emphasis on measuring on-the-job injuries.

Seidl says he isn't surprised that materials handling professionals in the retail industry are feeling pressure to keep inventories low. “Nothing sells when it's in the warehouse,” he says.

He also isn't surprised retailers aren't placing special emphasis on measuring on-the-job injuries or that ergonomics and safety rank relatively low on retailers' lists of important issues. That's not because retail DCs are unsafe, he says, but because they have a different working culture than manufacturing facilities and their associated warehouses.

Manufacturers have traditionally placed heavy emphasis on safety, creating a pervasive “safety culture” in their facilities with safety programs and daily safety meetings, says Seidl. Retail DCs, on the other hand, tend to have a merchant-driven culture that focuses more on service, he says.

Materials handling professionals in the retail industry agree with colleagues in other sectors that continuous improvement is the practice most important to their operations. Their second and third priorities for warehousing and distribution practices, however, differ from those in most other industries.

The practice of workload planning ranked as the second most important practice for retailers. Perhaps workload planning ranked especially high because retail distribution is seasonal and often involves each-picking, value-added services and other labor-intensive processes.

Same-day shipping also takes on extra importance for retailers. Reader Israel Gautier, warehouse manager for Valiant IMC, a distributor of professional-quality video equipment, says same-day shipping becomes increasingly important in his facility as his company increases its Internet sales.

Customers who buy online, he says, have incredibly high expectations for quick turnaround times and for visibility into the progress of their orders. To accommodate these customers, Valiant recently invested in software that lets customers track their orders online.

According to Seidl, the emergence of Amazon.com has forever changed consumer expectations, regardless of what they're ordering. “It used to be that 7 to 10 days was acceptable,” Seidl says. Now, consumers want to receive their orders much sooner. “And they don't want to pay expedited shipping for it,” he adds.

We asked readers to indicate which materials handling equipment they plan to buy in the near future, and readers in the retail industry listed warehousing software more often than any other item.

“The need for information is greater than ever now,” says Broderick, of J. Jill. His company invested in a commercial warehouse management system (WMS) eight years ago and has regularly paid for upgrades to the system. “It does such a wonderful job running our facility,” Broderick says, “that we absolutely feel it's worth continual investment.”

Eric Swedenborg, an industrial engineer for American Signature Furniture, says his company has spent several years developing a WMS in-house. The company is now planning a dynamic labor balancing module for the system, he says, to further increase productivity.

When it comes to investing in radio frequency identification (RFID) technology, retailers in Modern's readership are far less enthusiastic. Only 26% report plans to buy RFID in the near future—a smaller percentage than in any other industry.

Seidl, who advises some of the country's largest retailers, says he doesn't expect any of his clients to adopt RFID beyond some limited point solutions. “These guys would be happy just getting ASNs (advance ship notices) from people,” he says, let alone expecting suppliers to place RFID tags on every pallet or case in the shipment.