This athletic footwear and apparel wholesale and direct-to-consumer operation was looking to increase capacity and decrease costs.
With business growing 15-20% annually, storage and processing space were approaching their limits. The DC was heavily dependent on a poorly performing temporary workforce; turnover stayed stubbornly just over 100%. Even with new material handling upgrades, morale was low from long hours and persistent weekend work.
LogistiPoint used its well-refined Performance Management methodology to establish a performance-driven work culture. While it sounds obvious, pay-for-performance and labor management programs are notoriously difficult to set-up fairly and keep vibrant. While simplifying and standardizing operations, the team worked with Manhattan Associates’ configuration team to streamline system setup; carefully avoiding painful and expensive program modifications. The team led operations management in developing a workforce motivation strategy with engineered labor standards, incentives and extensive management, supervisor and associate training.
Prior to Performance Management, the company operated 10-hour days and weekends, shipping no more than 30,000 units per day. Now with Performance Management, the weekend shift was eliminated and daily processing has increased to able to process 70,000 units with less manpower. Other highlights:
- Achieved lowest labor cost per unit in facility history
- Re-jiggered product flow and eased bottlenecks to avoid a planned $2 million sorter expansion
- Increased individual employee compensation up to 17%
- Slowed employee turnover rate by more than 67%
- Added 2 years of useful life to the facility; enabling time for a more thorough strategy and design
- Realized all of these benefits despite a dramatic shift in order profile and product mix, which was working against them