This consumer products distributor and merchandiser for Wal-Mart and Sam’s Clubs needed to overcome operational challenges, reduce variable and fixed costs, and improve customer service for a new WMS and DC expansion.

The Challenge

When Wal-Mart demands better service, companies generally do whatever it takes to provide it. Our client was struggling with a new supply chain software suite they had hoped would significantly enhance their ability to serve at lower cost. However, this and other technological investments were not returning on investment and concerns about the level of service created a perfect storm of issues that threatened its well being.

Our Solution

LogistiPoint developed and implemented a strategy that included a network-wide Performance Management Program, client team training and expansion planning.  Cutting through corporate silos, we tapped the intelligence of different senior executives and other stakeholders. That provided us broad-ranging perspective, which made our implementation more effective.

Our actions included:

  • Introducing and overseeing a performance-driven labor management program based on human motivation principles, engineering techniques, promotion and incentives
  • Training, coaching and fostering program commitment and results
  • Educating managers on change management, associate coaching, and performance management to give them the skills they need to continue motivating teams and individuals
  • Selecting and installing LMS to support Performance Management reporting and quickly integrated it to their time and attendance system.
  • Identifying process improvements to scheduling, layout, re-purposing materials, and re-vamping new automation workflow
  • Evaluating and rebalancing space allocations across distribution functions
  • Developing and statistically validating performance goals for direct, indirect and support functions

The Results

After the first 6 weeks, operating costs began to drop. The entire program earned back its investment and began generating cash in week 14.  In addition, associates were energized and appreciative of the opportunity to be more effective in their jobs and to be objectively and financially recognized for doing so. Managers now have new tools and use them daily.

Other highlights included:

  • Saved over $1M by avoiding a shipping sorter upgrade
  • Cut overtime cost 21%, while minimizing reliance on temporary personnel
  • Reduced employee turnover while easing absenteeism by 17%
  • Measured alternative operating approaches and made modifications before rolling out
  • Minimized space requirements through footprint optimization; eliminating an entire leased facility, while decreasing facility operating hours and the accompanying costs

This rollout has been so successful that the company’s management team has created a culture team from other functions to explore how to expand Performance Management concepts throughout the organization.

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