Accommodating Future Growth, a 55% Productivity Increase
Process Improvement, Engineered Labor Standards, and Incentives
A specialty shoe, apparel and accessories retailer, opened its doors to a new, semi-automated distribution facility.
The facility was designed and geared toward servicing over 1100 retail stores, replaced their previous fifty year-old facility with the ability to accommodate significant future growth. The client selected Manhattan Associates’, WM as their warehouse management system to better utilize their modern equipment and updated processes. They had been successful in implementing piecework incentives in their manufacturing facilities for years, but wanted to lever the information provided by WM to advance a performance-focused culture in their dynamic distribution environment.
Leadership engaged the team to assist in developing a comprehensive Performance Management program for all their distribution operations. We worked with the client to simplify, streamline and standardize operations; deepening the understanding and use of the new WMS to drive out non-value-added functions and cost. This process, coupled with engineering, leadership workshops, supervisor and associate training, laid the groundwork for a significant improvement in productivity and asset utilization. In addition the tenacious sponsorship earned associate confidence in the program. The commitment and buy-in institutionalized Performance Management as an integral part of the culture.
Facility productivity improved by more than 55%, adding more than $4M to the bottom line in two years (this number has increased to over $25M)
The new processes and employee focus increased the throughput of the multi-level, wave-pick modules by 60%.
The program generated 100% ROI in less than 4 months, enabling 71% growth in volume with no significant capital expenditures
An entire 2nd Shift Picking operations was eliminated
Employee compensation increased by more than 20% for high-performing associates with no risk to the labor budget
Customer service levels improved by linking quality and accuracy to an associate’s individual performance
Supervisors’ skills were enhanced as they were trained to use new tools to manage proactively
Coaching and feedback became more effective as supervisors learned to focus on best methods, time utilization and pace
The company gained a competitive advantage in a tight labor market with increased overall and performance-‐driven compensation
- The Performance Management program has become the cornerstone of their continuous improvement culture