Client

Specialty retailer with over 1100 retail stores and $1.1 Billion in annual sales.

Problem

New semi-automated DC was designed for significant capacity improvements and much lower costs. Senior management had grave concerns that the new facility was designed correctly and briefly considered reverting back to the old manual processes.

Approach

The XCD team developed a methodical approach to not only attack the throughput constraints, but to develop a clear path forward to what the new ‘performance entitlement’ of the distribution organization should be. This included a blend of practical change management techniques integrated into a steady dose of performance management training. Simultaneously, we streamlined the new processes and then developed, statistically validated and installed comprehensive performance goals. Most importantly, line management became confident of their capabilities and were given a new set of tools to coach associates to high performance. Key success factors:

• Established new performance reporting tools and coaching guides
• Implemented lasting improvements in operational workflow, layout, and procedures
• Changed manager and supervisor focus and behavior to proactive staff planning, associate coaching, and performance management
• Developed a performance-driven, self-directed work-force through relevant incentives and objective benchmarking.

Results

Productivity increased more than 60 percent. Employees were rewarded for their efforts with 15 percent bonus earnings for achieving 100% performance. Many earned more. Supervisors were rewarded for achieving performance goals of productivity, quality, staffing efficiency, and coaching / feedback effectiveness. The culture shifted to prioritize:

• Coaching and performance feedback as a regular, objective event
• Weekly and daily staff planning
• Public recognition of associates with high levels of performance and improvement

The company realized both financial and cultural benefits, including:

• Eliminated the entire second shift order filling operations due to increased efficiency
• Improved quality and service performance during peak and off-peak times
• Reduced dependence on temporary associates due to increased morale and retention of quality associates
• Recognition awards based on objective criteria valued by associates
• Daily, personal feedback on performance relative to goals
• Precise staff scheduling capabilities via integrated modeling tools