Sports Products Distributor
Foster a Continuous Improvement Culture to Achieve Long-Term Operational Gains and Drive Significant Financial Impact
This story is for CEOs and PE firms who:
- Want to lower warehouse and logistics costs
- Need to assert accountability and controls over a process that no longer works
- Are struggling to fulfill orders promptly and meet vendor demands for payment
The challenge
A sports products distributor carried over 200,000 SKUs but extremely slow decision making and communications and issues with warehouse operations were keeping their departed on time in full (DOTIF) at a consistent level of 57%. Their 20,000 retailers and their vendors were very upset, which affected inbound receipts and outbound orders. The PE owners were increasingly concerned that the company was leveraged too high as warehouse and logistics costs constantly rose.
Maine Pointe’s initial analysis showed the client was overstaffed; productivity metrics where published held minimal values; current processes were not documented or standardized; staffing, job descriptions, and training did not align with the needs of the distribution center (DC); and there were multiple sources of data creating multiple sources of truth. No one had a handle on metrics or data.
Maine Pointe:
- Redesigned layout of the inbound, picking, packing, and shipping departments
- Created repeatable standard work instructions for sustainment
- Devised and implemented new pick pack process
- Developed and implemented 18 standard work instructions across the DC
- Reduced physical touches for inventory from five to three
- Re-slotted product in the warehouse to optimize efficiency
- Re-slotted product in the warehouse based on weekly, monthly, quarterly, every two quarters, and bi-yearly velocities (ABCDE)
- Implemented new pick pack process that resulted in 167% improvement in replenishment lines per hour
- Introduced wave planning tool to ensure orders are balanced with priority sequencing
- Implemented daily, weekly, and monthly staffing tools to ensure staff is utilized effectively by area
- Exceeded all the company’s savings goals
Lessons learned for other CEOs
- Leadership must provide strong, timely decision making that allows everyone to succeed
- The right tools, culture, and data can rapidly turn around distressed companies
The Results
- $11M in annualized benefits
- 20% reduction in operational costs
- Improved productivity (all KPI metrics) by 68% in all areas
- Increased departed on time in full (DOTIF) from 57% to 76% (with high of 90%) when product was available to be shipped by vendor
- Reduced dock-to-stock levels from 87 days to less than 24 hours despite increased volume
- Established standard process controls and accountability
- Change culture from purely reactive to proactive
Consumer Packaged Goods & Retail> Private Equity > Warehousing & Logistics Operations
Optimizing DC Network to Lower Operational Costs and Improve On-Time Fulfillment
