Strong PE and leadership sponsorship created the conditions for accelerated transformation in a distribution environment
This story is for executives who:
- Want to improve performance in a distribution environment
- Want to drive continuous improvement and take a high service level business from ‘good’ to ‘great’
- Need to adopt a data-driven approach to supply chain and operations to enable cultural change
The Challenge
This 90-year old business is a leader in specialty produce processing and distribution with a reputation for quality products, exceptional food safety standards and a high level of customer service. However, in a period of growth, the business was experiencing a rise in customer dissatisfaction and declining profitability.
Following a rigorous selection process, the company’s private equity owners selected Maine Pointe to work collaboratively with leadership. The goal was to develop and implement the tools and processes necessary to transform the culture of the operation, improve the overall customer experience and integrate the entire ecosystem to create a uniform ‘flow’ throughout the operation.
Transforming the culture of the distribution operation from firefighting to planning
The organization wanted to transform its culture but leadership needed guidance to understand how to make change happen in an inspirational and inclusive way. The majority of the leadership team was ‘home grown’ with very little outside experience and, for the most part, they were firefighting. The business’ exponential growth and the move to a new, larger facility had happened without establishing standard operating procedures (SOPs) or standard work instructions (SWIs). Communication was hampered because the mostly immigrant labor force spoke an array of languages. This had resulted in a high number of mispicks,a lack of inventory and late trucks. To improve performance and customer satisfaction, the Maine Pointe team, in close collaboration with a very open and receptive management team:
- Delivered data-driven insights to enable proactive planning and an analytical approach to performance
- Introduced a preventative maintenance program as opposed to reactive
- Worked closely with human resources to transform the people as well as the processes
- Developed, trained and installed SWIs focusing on visual instruction to overcome language barriers
- Improved overall customer experience by drastically reducing mis-picks, redeliveries and inventory issues
- Created, implemented and sustained warehouse, processing, transportation and planning-related improvements Implemented a design for all business segment gears to work in a uniform flow (see image on the left)
When the impact of COVID-19 forced our client to pause the engagement, leadership continued to use the tools and strategic plans Maine Pointe had developed to move forward, increasing productivity, reducing the number of trucks and improving delivery times. During an extremely difficult period, these improvements helped the business weather the storm.
The Results
Despite the engagement being paused after just eleven weeks due to the impact of COVID-19 on our client’s business, Maine Pointe was able to help achieve the following performance improvements:
- Implemented maintenance program which led to a reduction in downtime from 40% to 15%
- Introduced a re-slotting strategy which led to a 32% increase in productivity
- Reduced the number of ‘mispicks’ from ~300 per day to ~10 per day
- Delivered 18% procurement savings
- On track for a 20% EBITDA improvement when the engagement was paused
Lessons learned for other executives
- The distribution value chain must be viewed as a fully integrated eco-system
- Rapid results can be achieved if leadership is fully behind transformation
- Data driven insights are a key enabler to accelerate cultural change