Meeting the Wal-Mart Challenge

Client:

A consumer products distributor and merchandiser for Wal‐Mart and Sam’s Clubs needed to overcome operational challenges, reduce variable and fixed costs, and improve customer service for a new WMS and DC expansion.

Challenge:

When Wal‐Mart demands better service, companies generally do whatever it takes to provide it. Our client was struggling with a new supply chain software suite they had hoped would significantly enhance their ability to serve at lower cost. However, this and other technological investments were not returning on investment and concerns about the level of service created a perfect storm of issues that
threatened its well‐being. 

Approach:

XCD developed and implemented a strategy that included a network‐wide AMP Workforce Motivation program, client team training, facility expansion planning, and support of Wal‐Mart’s Sustainability 360 initiative. Cutting through corporate silos, we tapped the intelligence of different senior executives. That gave us broad‐ranging perspective, which made our implementation more effective.

Our actions included:

• Introducing and overseeing a performance‐driven labor management program based on human motivation theory, engineering techniques, promotion, and incentives

• Training, coaching and fostering program commitment and results
• Educating managers on change management, associate coaching, and performance management to give them the skills they need to continue motivating teams and individuals
• Installing ProRep® LMS to support AMP pay‐for‐performance reporting and quickly integrated it to their time and attendance system. This was done in a matter of days
• Identifying process improvements to scheduling, layout, re‐purposing materials, and revamping new automation workflow and induct
• Evaluating and rebalancing space allocations across distribution functions
• Developing and statistically validating performance goals for direct, indirect, and support functions

Results:

After the first six weeks, operating costs began to drop. The entire program earned back its investment and began generating cash by week 14. In addition, associates were energized and appreciative of the opportunity to be more effective in their jobs and to be objectively and financially recognized for doing so. Managers now have new tools and use them daily.

Some other highlights included:
• Saved over a million dollars by avoiding a shipping sorter upgrade
• Cut overtime costs 21 percent, while minimizing reliance on temporary personnel
• Reduced employee turnover while easing absenteeism 17 percent
• Measured alternative operating approaches and made modifications before rolling‐out
• Minimized space requirements through footprint optimization; eliminating an entire leased facility, while decreasing facility operating hours and the accompanying costs
This roll‐out has been so successful that the company’s management team has created a culture team from other functions to explore how to expand AMP concepts throughout the organization.

*Footnotes