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Functional Requirements
Complexity
One of the words I have been hearing with increasing frequency, referring to life, business in general and Material Handling projects in particular, is complexity. I find complexity to be an interesting word because I hear it in such a wide variety of situations. So I recently began to explore the term with clients and colleagues, to develop an understanding of what they mean when they use the word “complexity.” Out of that exploration, I identified several aspects of complexity that can help us better understand and work with complexity in all settings.
First we recognized the need to separate our exploration of our personal experience of complexity from the physical science of complexity, which is being widely discussed in the popular press. The physical sciences explanations did not seem to be that helpful with the issues we are discovering in our daily lives.
Second we concluded that complexity is a relative concept and not an absolute. That is, a subject that I may consider complex, you may not find to be complex at all, whether it be the tuning of an automobile engine, the game strategy of a football team, the marketing of a product, or the daily operation of a large distribution center.
Third, regarding complexity and life, we discovered that as we learn more about a subject we might have initially considered complex, it can become less so, and perhaps become understood and even manageable. At the same time, we live in a dynamic and changing world, and subjects we know and care about can become more complex and difficult to understand over time. For example, maintaining a competitive position in the marketplace is becoming even more difficult and complex over time. And while the basics of material handling can be thought of as the simple task of moving something from one place to another, material handling seems to become increasingly complex as we begin to understand how they are integrated into a larger distribution centers are more integrated into a supply chain, or when the handling requires a variety the use of several interconnected equipment and systems. We concluded that if we did not continue to learn, we could easily become overwhelmed by the complexity of our environment or a material handling project.
And fourth, if we have a problem in area we do not know about, or feel it is too complex to learn enough about to be competent in it, we need to develop ways to evaluate and select someone to help us with that problem and its resolution.
In this article and the three that follow, I will discuss each of the three stages of material handling projects, so that if we find a project to be complex, we can look into the source(s) of the complexity, and begin to understand and use some approaches to working with and managing it. For this discussion I am defining a material handling project as any project with the objective to improve the handling of materials or information about materials being handled, resulting in a change in any or all of the following – buildings, methods, procedures, material handling or storage equipment, or information systems.
Material Handling Projects
Material Handling projects generally have three stages – defining Functional Requirements, Design, and Support for Installation and Implementation. The purpose of the Functional Requirements stage is to define and communicate the scope, objectives and constraints for the project to the project owner asking for confirmation, to the design team to guide them in their work, and be the foundation for project planning, acceptance testing and change control. Material handling project failures are most often attributed to the lack of or incomplete Functional Requirements.
Functional Requirements
A Functional Requirements document typically describes two desired outcomes and a collection of detail information to guide the work of the balance of the project. The desired outcomes summarize the objectives of the owner of the system to be designed, and the objectives of the people who will be responsible for operating the new material handling system. The objectives of the owner set the business context of the project by describing:
- The material handling problem(s) to solve (typically current internal issues); and
- The plans for the future of the business, or external dimensions.
The objectives of the operator of the system are
1. That can technically handle the needs as described in the Functional Requirements ; and
2. That can be efficiently and effectively operated by conventional warehouse staff.
We find that the initial complexity in a material handling project develops out of the balance of factors that need to be understood and included in the Functional Requirements. The balance of the Functional Requirements document typically describes requirements covering a wide range of dimensions which we organize into four levels of system:
1. The external site environment;
2. The supply chain;
3. The company; and
4. The distribution operations and its staff.
Within each of these levels the separate, individual requirements can range from simple to complex, predictable and uncertain, with additional complexity developing out of the interaction between individual requirements. The work of developing the Functional Requirements includes
- Identifying the dimensions in each level of system that have some expectation of the project and the resulting system;
- Gathering historical and forecast data and converting the data into information describing each of these separate and combined dimensions; and
- Combining the data and information about these dimensions into explicit requirements and summarizing them into a Functional Requirements document.
For example, the Functional Requirements for a project to increase the storage capacity of a warehouse might include information about
- Local building and fire codes;
- Existing building and land characteristics;
- Existing facility layout;
- Characteristics of the current and future inventory to be stored including projected space requirements;
- Characteristics of the material to be stored including weight, cube, and storage aspects including high security, environmental sensitivity, or hazardous materials, and handling aspects including fragile, odd sizes, 2-man pick, etc.
- Characteristics of the receiving and shipping activity;
- Material handling personnel performance, work methods, and productivity objectives and methods of staffing;
- How the design is expected to integrate into the existing distribution operations, and
- Budget or ROI criteria, etc.
For a new distribution center, the definition of problem, desired outcomes and the set of Functional Requirements could require significantly more information from each level of system, and present a much more complex set of information to analyze, understand, summarize, and present. I tend to include more information from more dimensions in a Functional Requirements report than may be necessary, but I would rather provide too much information than to little. Often the scope of a project changes, so by including information beyond a minimal set of dimensions to include in the Functional Requirements work, we can prepare for the possibility of an expansion of the scope by having enough information to continue without significant interruption to the process.
The remainder of this article will address the complexities that exist within in the dimensions for the Functional Requirements for a Material Handling project. My next article will address complexity in Design. The third article in this series will address complexity in the Support for Installation and Implementation.
Complexity in MHE Functional Requirements
We can begin to understand the nature of complexity in developing the Functional Requirements of a material handling project and developing a method for handling it by first creating a list of dimensions or individual requirements within each level of system that are relevant to the scope of the project, and then assigning an assessment value of the complexity to each of these dimensions.
For example, I begin by creating an initial list of dimensions to investigate for a large project, recognizing that a smaller project might not need to address all of these dimensions to develop adequate set of Functional Requirements. I find that the majority of the dimensions to include in a list are objective, that is, they can be observed and measured such as characteristics of stock keeping units (SKUs), or the range of order characteristics, and the number of orders per day, etc. We gather the historical and forecast data describing these characteristics. Most of these dimensions exhibit regular and predictable behavior. However some of the dimensions exhibit irregular and non-predictable behavior, which can make it more difficult to define requirements with a reduced level of confidence. And, the interaction of some dimensions can develop a uncertain outcome that can make lead to another level of complexity that can lead to requirements that can only be estimated with some nominal confidence rather than specifically. And some dimensions are not easily predictable or measurable at all such as property taxes, severe weather, competition, product development, etc. that are important to the planning of a distribution center and challenge us to understand them as having an influence on the variability or range or performance rather than a precise statement of requirements to guide the design.
The list below is just a start and includes typical dimensions to consider from each level of system. The dimensions you include in your project Functional Requirements need to be appropriate to the owners’ desired outcomes.
- The Site Environment
- Government taxes, codes, and Green dimensions
- Seismic character of the region and weather/climate patterns
- Infrastructure availability and distance to power and roads, etc.
- Character of the local workforce
- Location, configuration, and condition of the property/buildings to be used
- The Supply Chain
- Distance to vendors and customers
- Industry service expectations
- Customer requirements
- Vendor performance
- Order characteristics
- Number and character of customers
- Carrier availability and performance
- The Company
- Historical and forecast sales and sources of potential change
- Existing and potential changes in services offered
- Character of and potential changes in the materials/merchandise to be handled
- Quality performance requirements
- Customer service, accounting, sales, marketing, training, IT, etc.
- Return on investment criteria
- The Company’s existing warehouse/distribution facilities, management and staff
- Environment for change
- Management skills
- Character of the existing work force
- Effectiveness of existing operations
- Other warehouse and distribution facilities
Once we have developed the list of dimensions to study, appropriate for our project, we use a method we developed to begin to identify sources of complexity, by assigning estimates of the complexity for each dimension. From our understanding of relative complexity, each of us will assess the complexity of each dimension based on our personal experience with it. For example, some of us might assess order characteristics in a high fashion apparel distribution project as more complex than the order flow to support JIT flow to supply an assembly line.
Having identified the dimensions that we believe are the sources of the complexity in a project (and there may not have any complexity in your project), we have choice to learn more about these dimensions so that we may work with them, or getting someone to help us with them to develop information about them to include in the Functional Requirements.
So while this process will not resolve the issue of complexity in a material handling project, and it probably cannot be completely resolved, I have described a way of understanding the sources and managing the complexity differently to increase our potential to meet or exceed the project desired outcomes.
This article presents
- A framework for beginning to understand and work with complexity in our lives;
- A description of the three major stages of a material handling project; defining Functional Requirements, Design, and Support for Installation and Implementation;
- A structure of the contents of a set of Functional Requirements for a material handling system including problem definition, desired outcomes, and the identification, analysis and description of the individual dimensions to guide the balance of the project work; and
- Identifying dimensions or the interaction of dimensions that are complex enough to require further study or finding skilled help to develop the information needed to include in the Functional Requirements.
Conclusion
I have presented a framework for thinking about and managing complexity and in particular complexity in a material handling project. Key to the work is to identify the dimensions to include in the analysis in Functional Requirements component of a project, and then assessing these dimensions to direct our attention to where may need special effort or resources to develop complete and useful Functional Requirements to guide the balance of the material handling project. ©
I look forward to hearing from you how this approach has supported your project work. You can reach me at Coach@warehousecoach.com or in North America at 503-296-7249.
And check back in a few weeks to see how we are thinking about complexity in the Design portion of your material handling project.
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