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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 dispatch 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.

Comprehensive Standard Operating Procedures (SOPs)

everyday processes linked to the business strategy

streamlined and standardised core processes

Achievements

 Over 18 months the team overcame significant challenges to accomplish:

£ 0 k SAVINGS
IN YEAR 1
0 % INCREASE
in outbound availability
0 % DECREASE
of insufficient stock
0 STAFF HOURS
Saved per day

The Customer Challenge

They 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 or ownership of processes
    • While data was gathered, it’s 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.

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

VISUALSING THE BUSINESS AS A SYSTEM

Five team members, including the General Manager and his Senior Operations management team, attended a 6 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 they were being operated. They discovered that this was often different to how they thought they were being operated.

This single exercise was the catalyst for further change as the team start 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 get some sense of 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.

THE TEAM BEGIN 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 change to enable further improvement.

THEY EMPLOY 'STANDARDISE, MAINTAIN AND IMPROVE' METHODOLOGY

    • Focus is placed on building capability for the process owners, managers and operators of the various operations and enabling processes
    • They establish the ‘Best Known Way’ to operate the core processes, the measures that tell them how the processes perform and the systems to continually improve
    • Each key process is mapped with the ‘quick wins’ identified enabling them 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 they 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).

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. They now:
    • Understand the importance of linking the Business Strategy with the everyday processes to enable that strategy
    • Can 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
    • Lead by data, visualising, interpreting and responding appropriately to that data
Have achieved:
    • £301k savings in Year 1
    • 2% increase in outbound availability
    • 35% decrease of insufficient stock
    • 21 staff hours saved per day.