A major high street retailer engaged i-Realise to review the state of their current warehouse operations. The objective of this initial piece of work was to remove the risk posed by tacit knowledge and to form the basis for future continuous improvement work by mapping As-Is processes end to end. Following on from this, the client asked i-Realise to look at how the warehouse handled a specific group of products which had been targeted as an area for strategic growth with the goal of being able to quantify productivity and improve efficiency.
The issues fell into two broad categories: business and approach.
The business issues were that the current Warehouse Management System (WMS) was not configured to manage the in-scope product types and this was leading to significant manual effort. In addition, as the WMS could not adequately report on throughput, there was no way of understanding the work effort required by product type and being able to staff accordingly.
The approach issues were how we could effectively measure end-to-end work effort in a large warehouse whilst keeping cost down but gather sufficient information to make our observations meaningful. To succeed we needed to acquire enough data to extrapolate how much effort each area of the warehouse, from Goods In to Dispatch, was expending for the in-scope products. There was also the challenge of how to avoid Observer Effort; people altering their behaviour when being watched.
i-Realise worked with the client to develop a custom sampling method and over the course of 5 days 1200 data points were gathered, identifying the activities staff were undertaking and which of the in-scope products they were handling at the time. This business readiness approach had the added benefit of giving the client a true understanding of the work being undertaken and the issues encountered by the team. By randomising the observation points, communicating in advance and by using excellent inter-personal skills, the team were able to minimise the impact of Observer Effect and feedback following the week was positive from all those who were observed. Following the observation week i-Realise were able to calculate not only the work effort required to move the in-scope products through the warehouse, but also show how much effort was required at each stage. It also meant that the team were able to quantify the improvements identified during the week.
Our recommendations to the client were that without changing the WMS there were £45k of savings to be made from improving picking efficiency by reducing non-value adding tasks which took up more than 100 hours/week.
On a subsequent visit to the client 9 months after the report was delivered, the business has made £48k worth of savings, achieved by implementing i-Realise’s recommendations.
In addition to this, the metrics created now form the basis of ongoing continuous improvement work in the warehouse.
The in-house team have used these to create KPIs (the first time the client has had internal process KPIs of this nature) across the warehouse. These are being rolled out by the managers.
There is further potential for improvement as additional change projects are implemented including;
- Changes to the WMS (3 FTEs of time and £36k/annum in printing),
- The introduction of visual management
- Greater business ownership of change
For the i-Realise team, it’s fantastic to see not just hard savings but also our work acting as the foundation for ongoing and lasting change.