– Supply Chain Insight –
How a commitment to end-to-end fulfillment optimization helped a leading grocery wholesaler prevail over COVID.
Supply Chain Operations & Finance
An ASCM Connect Session Debrief
Well, that’s another successful ASCM Connect conference in the books!
I must say that we were looking forward to the trip down to San Antonio, which would have been our first in-person event since MODEX in Atlanta in early 2020, but ASCM still pulled off a virtual even that was both engaging and informative, and we were happy to have contributed to it either way.
Our contribution to the event was in the form of a breakout session titled “How End-to-End Fulfillment Optimization Helped a Leading Grocery Wholesaler Prevail over COVID”. Now, for those of you who have heard us speak previously, whether through ASCM, WERC, CSCMP, FMI, or Reuters Events, you’ll know that we discuss the importance and impact of end-to-end fulfillment optimization and continuous improvement quite a bit. It is, after all, our business.
We’ve also been fortunate to work with many proactive and best-in-class organizations who are willing to help share our success stories like the one we shared last week with Rick Goodman of Associated Grocers of Baton Rouge.
For those who did attend the event but missed the session, keep in mind that you can still watch the recording through the event platform until November 30th.
For those who didn’t attend the event but want a bit more insight into some of the key points that were discussed, continue reading.
While the session was focused on Rick’s journey through the challenges of the COVID pandemic, both as a member of AGBR’s leadership team and as someone very close to the operation, the step towards end-to-end optimization and continuous improvement started long before that.
I’m going to be publishing a post here on the blog shortly discussing the ‘optimization mind-set’. While I’ll invite you to check back in the coming weeks for that article once it’s published, I’ll tell you that the theme is centered around proactive thinking. To me, that is what defines continuous improvement. It’s also what defined our journey with Rick and AGBR, which started 3 ½ years prior to the start of the pandemic.
Now, by definition, the goal of continuous improvement is to improve every process by focusing on enhancing the activities that generate the most value while removing as many waste activities as possible. For some, it’s a hard concept to grasp in practice, because it may seem unattainable. I can tell you that achieving 100% optimization is like achieving absolute zero, where its existence is nearly a paradox in and of itself. But, perfection shouldn’t be the goal.
By its very nature, continuous improvement is a proactive measure, and while running a distribution operation will give you plenty to do throughout the course of a day, choosing to make time to be proactive will save you from having to make the time to be reactive.
Those with the optimization mind-set understand this and Rick, along with his colleagues at AGBR, understood this.
Now, prior to the pandemic, Rick and his team were faced with three challenges.
- Low capacity utilization, mostly affecting pick facings
- Low labor productivity and on-task percentage
- Build up of tedious and manual processes
While these challenges would have been easy to overlook, or patch up with short term solutions, Rick and his team knew this was not sustainable over the long run. Not only were they wasting dollars out of their budget, but they were also potentially creating a reactive and disruptive situation in the future, and this is even without the knowledge of what was to come at the beginning of 2020.
Now, while I’m not going to get into the details of the case study that we presented – though if you are encountering similar challenges in your own operation, I invite you to contact us to learn more about how we can help you solve them – the big take-away that I want to highlight is not what was done to optimize the operation and to address the challenges listed above. The big take-away is the fact that these challenges were noticed and acted on right away, even when it meant a potential transformation of the operation. Of course, Rick and his team had other things to occupy their time – as everyone does – but they made it a priority and they executed.
As a result of what was done, Rick and his team were not only able to resolve capacity constraints, but they were able to achieve and sustain a significantly higher on-task percentage which, as a result, increased order throughput. This increase in throughput reduced full-time labor requirements by 40 employees as compared to what it would have been in prior years.
40 full-time employees!
Any time you’re able to reduce operating costs by the equivalent of 40 full-time employees, while keeping the same order throughput, it’s a substantial win. In fact, it was a 7-figure win for AGBR.
But let’s fast forward to early 2020 when the playbook was thrown out of the window and an operation’s ability to sustain a high throughput level was paramount, not just in terms of maintaining margin but, for essential goods providers like AGBR, it was the difference between shelves being full and empty for consumers needing staple products.
Rick and his team had not only proactively optimized to counter existing operational challenges, they optimized to protect themselves from future disruptions. It just so happened to be one of the biggest supply chain disruptions in recent history.
Now, while we’ve all adjusted to the ‘new normal’ as much as possible as we approach the 2-year mark of the COVID-19 pandemic, it’s never too soon to act and optimize, as you may be surprised at the results, and you also never know what’s ahead.
So, the question is: are you going to choose to make time to be proactive today, or are you going to wait until you must make time to be reactive in the future?
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