A major branded apparel company had just invested multi-millions in automation and technology upgrades to their 15-year-old DC, yet the total shipment output in this newly-automated DC was lagging behind the target and the cost per unit was too high.
While the new automation was performing up to its design specifications, the DC unit volume and CPU metrics were falling short of expectations. DC management and associates had not yet assimilated to the new technology and the new labor processes were not yet optimized.
The LogistiPoint team began by streamlining the labor processes in and around the newly automated operations. New procedures were developed to mesh with the automation allowing greater output from the material handling equipment. Engineered labor standards were developed to measure the output of both individual associates and those working in teams. A pay-for-performance program was instituted so that associates could be rewarded for their own work effort.
In comparison to the multi-millions spent on automating the DC, a relatively small investment was needed to optimize the processes and methods supporting the new technology. By focusing on the labor component in this updated DC, the total unit output increased by 35% and labor costs decreased by 20%.