The Team Has More Power Than It Thinks
A leading consumer products company shipped millions of boxes of goods weekly. Most of the time, large quantities of the same products were shipped on a wooden pallet, and loaded on a truck. The distribution center employees were used to picking full pallets of products out of racks, placing one label on the entire pallet, and then, placing the pallet of goods on a truck. In recent years, Amazon entered into an agreement with the company, and turned their efforts upside down.
Amazon ships any quantity of products, be it one box, or a truckload of boxes to customers. Their customers expect to get the right product quickly and properly labeled. The consumer goods company would now have to label every single box shipped to an Amazon distribution center or an Amazon customer. They would also have to do it more quickly than they had to for any of their other customers.
In the years leading up to and including 2018, Amazon business exploded for the company, much like many others around the world. The company added staff to ship all of the products required, but they weren’t meeting Amazon’s strict delivery requirements and were starting to lose money on the relationship. At this point, they called in Process Improvement Partners to help them solve their problem.
We walked through the existing process together to see what opportunities might present themselves and if a Kaizen event could help solve the problem facing them – develop a system that would meet the growing Amazon business and delivery requirements and do it safely, productively, and profitably. It turns out they were applying their large volume/low product diversity approach to the small volume/high product diversity Amazon orders. We also found out they didn’t always receive Amazon orders in a timely or predictable fashion from their corporate customer order systems, so it caused them to staff the distribution center in ways that made people wait for orders to pick and ship.
We designed a 3-day Kaizen to get them back into compliance and decided to set an aggressive set of goals: 25% productivity increase, 50% cycle time reduction, and 50% reduction in fines relating to late deliveries to Amazon.
In a Kaizen, you should pick team members who will help you solve the problem and want to win. In this case, we picked employees from the distribution center and corporate team members who could provide perspective on the issue and could also initiate identified system changes. We advised all team members this Kaizen was critical to the success of the company and we expected full participation from each one of them during their time together. The team leader made a compelling case and received commitment from all team members.
On Day 1, after team introductions, the team leader explained the problem from his point of view. He thanked everyone for coming and asked them to keep an open mind and be willing to challenge their thinking during the Kaizen. Then, the Amazon customer service manager from corporate presented “Voice of the Customer” information to the team. This was an engaging discussion, and the entire team felt an urgency and need for change and improvement. Following these discussions, we took the team out on a process walk.
We started out in the office, looking at a computer work station. When we asked what was happening at the work station, a team member explained they were waiting for orders to arrive from the corporate system. Until orders arrived, she was stuck and couldn’t provide any assignments for the distribution center employees. We asked her the reason and she explained the orders must have been received by the corporate system after 6 pm. Orders from Amazon were manually entered, and after 6 pm they wouldn’t be entered into the system because everyone had gone home for the day. Orders would wait until at least 8 am the next day to be entered, and by the time they were, the distribution center wouldn’t see them until 10 am or later. The distribution center employees work around the clock. This was a big opportunity for improvement.
We walked around the facility next, looking at the physical and other system issues in the way of safety and productivity for the distribution center. The team members took many notes and after 2 hours, we returned to the meeting room to review what we observed.
After sharing all of the issues as a team, we mapped out the existing process on a wall with sticky notes to identify the biggest pain points and opportunities. There were many issues and we wanted to make sure we would be working on things that would make the biggest impact and also were within the control of the team. We made quick estimates of the time it took to complete each step, including the minimum and maximum times. The idea was to work on the steps that took the longest time, as streamlining them would maximize the customer service improvement.
We identified some steps that could take more than 8 hours and up to 24 hours or more. Those were the steps to work on. The team prioritized those steps and came up with ideas to reduce the time. They avoided the step called, “Wait for orders from corporate”. This step was identified to take anywhere from 1 1/2 hours to 24 hours, so it would be extremely impactful if improved.
I challenged the team to consider improvements to the step. They didn’t feel like they could make any changes without proper approvals. I reminded them they were empowered by the simple fact they were the Kaizen team chosen to solve this critical business problem. If they didn’t feel they could unilaterally make changes, they should “phone a friend” who could approve their changes immediately. One of the team members, I’ll call her Ruth, left the room to make a phone call to the person who could approve the changes. After a few minutes, she came back to the room and informed the team the person she tried to call was out sick and she would try again tomorrow.
I knew we didn’t have time to wait, so I asked Ruth if she was willing to call that person’s manager or go to the person’s house, knock on his door, and gain his approval. She thought I was joking about going to his house (I really wasn’t), and decided to call the next level manager. She wasn’t available either. Finally, she called the Vice President of Logistics and Distribution. After explaining what was going on and the approval she was looking for, she was informed that another team member, let’s call her Alice, had the authority to make the decision. Ruth came back into the room, met with Alice, and secured approval for the change.
It turns out the change was so simple it could be executed by a few lines of programming allowing any orders coming in after 6 pm to be manipulated automatically and delivered to the distribution center immediately. This option was already being used for other critical customers. Adding Amazon to the list took no more than 10 minutes of effort. The team was so motivated by their win, they found many other quick improvements and letting nothing stand in their way, met or beat all of the objectives for the Kaizen. They described how the only thing that was getting their way to improvement was their own way of thinking. Once they realized they were empowered, there was nothing standing in their way of victory.