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CASE STUDY: Establishing and Maintaining a Centre of Excellence

One of the UK’s largest food retail, wholesale, and distribution businesses worked with us to transform their wholesale distribution depot into a Centre of Excellence.

This 80,000m² logistics facility and retail warehouse has 2 core processes, ‘receive, store and replenish stock’, and ‘pick and despatch orders’. It’s a busy unit with an experienced team under significant time, resource, and financial pressures to deliver a high quality service for their internal and external retail customers. Their primary focus is to make sure stock gets in and out of the warehouse, but there are significant upstream issues impacting on the team’s ability to deliver a quality service.

Achievements

£307K savings in Year 1

2% Increase in Outbound Availability

35% decrease in insufficient stock

21 staff hours saved per day

The Customer Challenge

The customer had some significant challenges to overcome, not least:

Stock wasn’t always available for picking
Some people were busy while others were underutilised
Agency staff were relied on at a significant cost
There was little standardisation and no agreement on how the work should be done, nor any ownership of processes
While data was gathered, it was of limited use as an everyday resource
Productivity bonuses based on the swift movement of stock led to quality issues and, as a result, customer claims
The team often worked in silos with little alignment or shared ambition

But all this was about to change…

Visualising the business as a system

Five team members, including the General Manager and his senior operations management team, attended a six day PMI Process Management for Managers in-house course. It was a big commitment for the team as time out wasn’t always possible.

Understandably for people with many years of logistics experience between them, there was some scepticism about the process improvement methods, and a concern that this would negatively impact on the day job.

The team were encouraged to visualise their business as a system with interdependent processes. They identified the core processes and, alongside those who were working in the process, they mapped how the processes were being operated. They discovered that this was often different to how they thought the processes were being operated.

This single exercise was the catalyst for further changes, as the team started to appreciate that assumptions had been made about the way in which the work was performed.

The General Manager and his team also mapped out a typical day to find some sense as to where their time was spent, in order to gain control of the work and standardise it, so they could focus on doing the right things at the right time.

"Once we shifted our focus away from 'saving money' to the way the work was done, the savings and efficiencies came as a result."

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The team begins to address the ‘things that get in the way’

Over the next 18 months, the team continued their improvement journey, supported by a dedicated PMI Consultant working alongside the General Manager. They developed a shared vision and ambition which everyone got behind; ‘Ensure stock is at the right place, at the right time, to the right quality, every time’.

The General Manager, with coaching, addressed the socio-emotional and political aspects, the behavioural ‘things that get in the way’ of the work being done. He spent time addressing concerns and engaging, listening, and involving the whole team in the changes to enable further improvement.

A ‘Standardise, Maintain and Improve’ Methodology is Employed

Focus is placed on building capability for the process owners, managers and operators of the various operations, and the enabling processes
The ‘best known way’ to operate the core processes is established, as well as the measures that show how the processes perform, and the systems to continually improve
Each key process is mapped with the quick wins identified enabling the team to streamline and standardise the processes
Standard Operating Procedures (SOPs) are developed by the operators, communicated to other process team members, and everyone is trained in the new standard
Visual Management Huddles are established with specific results and process measures linked to the customer
Huddles occur daily to a standardised process so that the team can monitor and respond appropriately to process abnormalities. This structure aligns metrics at the
Supervisor level (tactical) with those at the General Manager level (strategic).

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The Results & Benefits the Customer Achieved

The warehouse is clean, ordered and runs efficiently. Having multi-skilled people has led to greater operational flexibility – no more standing around or paying for external agencies. There are clear accountabilities and responsibilities at each of the four process levels, and a discipline of process management and monitoring. There is a real time awareness of process performance at the right level, so there are no surprises. Staff are engaged, willing to share their improvement ideas and are proud of what they have achieved.

The customer is now able to:

Understand the importance of linking the business strategy with the everyday processes to enable that strategy
Define and understand their customers’ needs, wants and expectations
Lead by process – engaging, involving, and listening to those who work in the process
Understand how the work is done
Use data to listen to the voices of their processes – visualising, interpreting, and responding appropriately

Benefits achieved:

£307k savings in Year 1
2% increase in outbound availability
35% decrease of insufficient stock
21 staff hours saved per day.

Would you like to improve the effectiveness of your operations?

Over the last 35 years we have built our business by delivering results for our clients. All executed by our team of true performance improvement experts, who have held senior roles in industry, sat where you are, and understand the real-world challenges of running a business. This lets us apply pragmatic solutions to your problems, not just the ‘out of the box’ approach taught in a training course.

Our team get stuck in. We roll our sleeves up and work with you to deliver your performance improvement goals. Contact us today and take the first step towards transforming your goals into results.