Argent Global Services partnered with a regional retail grocery chain to implement a comprehensive Productivity Improvement Program in its distribution center.

The client was experiencing poor employee retention, with a high turnover rate of 200%. Management knew that it was underpaying compared to the market, there were no performance goals or individual accountability, the prevailing attitude was “just get it out the door”, that processes were inefficient, they were suffering poor quality and were not optimizing space utilization.

After conducting an on-site operational assessment, Argent discussed its findings and recommendations with management. Argent proposed that the client invest in a Productivity Improvement Program (PIP) like those it had successfully implemented in other client operations. The program would consist of:  Best Methods, Performance Measures (Engineered Labor Standards), Performance Coaching and a Labor Management System (VantageRPM). The client realized that implementing such a comprehensive program would enable them to achieve their objectives.

Company Fact Sheet

• Distribution Center: 270,00 square feet
• Employees: 70 – 90
• Company stores: 18
• Independent retailers: 200

The client’s objectives in implementing the Productivity Improvement Program were to:

• Increase productivity & reduce operating cost
• Improve quality and customer satisfaction
• Retain an experienced workforce / reduce turnover in a highly competitive marketplace
• Provide timely and accurate management reports that would enable distribution center management to effectively monitor and manage performance
• Forecast manpower requirements by activity based on projected volumes and planned productivity metrics

Argent worked directly with corporate and distribution center management to implement the Productivity Improvement Program. Industry expertise along with traditional Industrial Engineering tools were utilized to drive the implementation of process improvement initiatives and achieve the performance and cost savings objectives.

The layout and storage philosophy was reviewed and revised. Best Methods were developed, documented and implemented with management’s support in all key functions. Argent engineers conducted time and motion studies to develop Engineered Labor Standards. A Performance Coaching Program was implemented, and supervisors were trained to conduct one-on-one observations and coaching sessions with direct labor associates. The VantageRPM LMS was implemented and users were trained how to leverage the information that would be available to them.

The Performance Improvement Program provided a solid foundation for continuous process improvement and the establishment of individual accountability. The layout and storage configurations were revised to achieve more efficient workflow and improve space utilization. Best Methods ensured consistency of operation within each function and reduced new-hire training time. Engineered Labor Standards provided a fair and accurate way to monitor individual and team performance and productivity. Performance Coaching resulted in increased management time on the floor, improved communication between management and employees and reduced turnover. The VantageRPM Labor Management System provided dynamic reporting capability that enabled management to monitor progress on a timely basis, identify opportunities for improvement and forecast labor requirements to improve staffing and scheduling. The information from the LMS was used to establish an Associate Accountability Program.

• Reduced overall labor cost by 30%
• Increased effectiveness of management and supervisors
• Stabilized workforce and significantly reduced turnover
• Increased hourly pay rates and became competitive in the competitive market
• Improved morale
• Increased throughput and on-time order performance
• Increased labor utilization
• Increased warehouse capacity and optimized space utilization
• Improved customer service and service levels