Accommodating Future Growth, a 55% Productivity Increase

Process Improvement, Engineered Labor Standards, and Incentives

CLIENT
A specialty shoe, apparel and accessories retailer, opened its doors to a new, semi-­automated distribution facility.


Challenge

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.

Approach

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.

Results

  • 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

“At first, we weren’t sure about our facility or it’s systems. We moved from a very familiar environment to a totally unfamiliar one. Performance Management enabled us to get our arms around the WMS and get more than we ever dreamed from our facility. We don’t just have higher productivity, we can manage more proactively and our customer service levels have soared.”
— Vice President, Distribution and Transportation
  • 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
“Performance Management is not a project – it is a way of life for us. Associates took a ‘wait and see’ approach… ‘Let’s see how long this lasts’. Now that we are into our second year, we are just as aggressive today in sponsoring as we were in the first month.
— Director, Human Resources