Accuracy and Productivity
A retail chain with 5700 stores in 24 U.S. states implemented ADI’s behavior-based Performance Management (PM) at its newest distribution center (DC). The center quickly surpassed every performance record established in the 60-year history of the chain’s six other distribution centers. Today, the retail chain is hurriedly converting the management mode of its DCs to the PM technology.
This retail chain organization, established in 1939, has expanded from a single store to a multibillion-dollar business that currently operates 5700 stores and opens new locations at a rate of 600 to 700 per year. With the slogan of “A better life for everyone” the organization offers budget prices on a variety of products. Seven distribution centers across the Southeast and Midwest, each with an employee base of 500 or more, service this growing chain. Typically when a new DC opens those employees have only 8-10 weeks to become competent at regularly and accurately servicing 600-700 retail stores. These circumstances typically result in issues of high stress, turnover, safety and accuracy (meaning the right product in the right place at the right time). In a recent opening of a new million-square-foot facility, the chain’s management decided to try behavior-based Performance Management (PM) in an attempt to avoid the many problems inherent in such an endeavor.
The new center’s managers chose to focus on recognizing the specific behaviors that would bring the performance results they desired. They involved all employees in thematic contests in which their observed behaviors were posted and graphed (anonymously) as supervisors concentrated on recognizing anyone who performed the behaviors. Within months this DC had shortened the learning curve by a full year, taking six months to meet and then surpass all performance standards set by the other centers. In fact, this DC beat the standard productivity numbers from day one. Also, because the PM methods are positive, attendance rates remain higher than that of any other facility and turnover is lower. Rewarding the targeted behaviors related to accuracy, productivity and cleanliness has led this DC to achieve breakthrough progress in those areas. Currently, this DC, raised on PM, services 90 more stores than do the other DCs. Today, the parent retail chain is focused on taking PM to the other DC operations as quickly as possible.
Results of Intervention:
“We are achieving better numbers than we’ve ever achieved before. Our accuracy is higher; our accidents are going down; our costs are lower than they’ve ever been and we’re setting new records on throughput activity and accuracy.”
– VP Logistics