Case Studies

Establishing and Maintaining a Centre of Excellence

Date: 6th November 2017

Author: PMI

 

A wholesale distribution depot for one of the UK’s largest food retail, wholesale and distribution businesses transform their business unit into a Centre of Excellence.

 

Current state

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.

They have some significant challenges to overcome, not least:

  • Stock isn’t always available for picking
  • Some people are busy while others are underutilised
  • Agency staff are relied on at significant cost
  • Little standardisation and no agreement on how the work should be done or ownership of processes
  • While data is gathered, it’s of limited use as an everyday resource
  • Productivity bonuses based on the swift movement of stock can lead to quality issues and, as a result, customer claims
  • The team often work in silos with little alignment or shared ambition.

But this is about to change.

Visualising the business as a system

Five team members, including the General Manager and his Senior Operations management team, attend a 6 day PMI Process Management for Managers in-house course. It’s a big commitment for the team as ‘time out’ isn’t always possible.

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

The team are encouraged to visualise their business as a system with interdependent processes.  They identify the core processes and, with those who are working in the process, map how they are being operated today. They discover that this is often different to how they believed 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 map out a typical day to get some sense of where their time is going, in order to gain control of the work and standardise it so they can 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 continue their improvement journey, supported by a dedicated PMI Consultant working alongside the General Manager. They develop a shared vision and ambition which everyone can get behind; ‘ensure stock is at the right place, at the right time, to the right quality, every time’.

The General Manager, with coaching, makes sure to address the socio-emotional and political aspects, the behavioural ‘things that get in the way’ of the work being done. He spends 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 owner, managers and operators of the various operations and enabling processes that make up the unit
  • They establish the ‘Best Known Way’ to operate the core processes, the measures that told them how the processes performed and the disciplines to continually improve#
  • Each key process is mapped with the ‘quick wins’ identified enabling the initial streamlining and standardisation of those processes
  • Standard Operating Procedures (SOPs) are developed by the operators of those processes,  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 standardized process to gain control of the process by monitoring and responding appropriately to process abnormalities
  • This structure aligns metrics from the Supervisor level (tactical) with those at General Manager level (strategic).

The benefits start to roll in…

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 and at the right level, so no surprises. Staff are far more engaged and prepared to share their thoughts 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, the Process Operators
  • Understand how the work is done
  • Lead by data, visualizing, interpreting and responding appropriately to that data

 

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