Book Publisher – Distribution Centre
The Situation
Our client contacted us to help them turn around a Distribution Centre that was performing well below par resulting in long delays in shipments and resulting customer complaints.
Following the launch of a new software system, their distribution centre had started to suffer from increasing performance problems and severe bottlenecks in throughput. We were asked to get involved to help establish what was happening. It became apparent that the problem was much wider than just the new IT system.
Our Input
Our intervention included the following:
- Day to day (interim) management of the warehouse and hands-on leadership of the improvement initiatives
- Restructuring and empowering the management team
- Implementing meaningful performance measurement
- Streamlining processes and systems to increase performance
- Rebuilding a broken relationship with the new software supplier
- Unpicking some software customisations that were working against the performance objectives
- Establishing a new workforce culture, encouraging and rewarding the right behaviours
- Recruiting a new head of distribution to take it forward.
Outcomes
Aside from containing the impact of the problems within 3 weeks and getting the Distribution Centre back to an acceptable level of performance, we then delivered the following improvements within the first six months:
- Hitting 100% service level
- Reduced distribution costs: from a 13.5% overspend in first half year to a 2.8% under-spend in the second half, leading to 18% year on year improvement
- Reduced inventory by 15% while increasing stock availability and fulfilment rate performance
- Streamlined processes and systems including step change performance improvements to the newly installed, but poorly performing Warehouse Management System and the underlying business processes
- Increased visibility and confidence meaning that the executive team had complete confidence in the new management team and the performance measures so no longer needed to worry about distribution and could focus their attention elsewhere.
