FleetPride
Operational Excellence practices in distribution operations can have a dramatic impact on performance. There are many examples of double-digit gains in productivity and service levels from converting a packaging area to workcells, zone picking waves of orders and re-slotting storage areas. FleetPride, distributor of heavy-duty truck parts, fully understood such opportunities to sustain their progress and fully capture the financial benefits, their improvement efforts would have to connect directly to the overall business strategy.
“We want to grow our business. We want to grow it fast. And we think continuous process improvement will help us do that. We can’t grow the business by simply doing the same things we’ve always done. We need to be much more effective and efficient.”
– Kevin Peters, FleetPride’s CEO.
Formed in the late 1990s, FleetPride grew steadily through a series of local and regional acquisitions. The company’s retail branches serve major U.S. metropolitan” markets. They stock over 250,000 heavy-duty truck and trailer parts for brake, drive train, engine, hydraulic, suspension and electrical applications. FleetPride also sponsors a nationwide network of over 200 repair and maintenance facilities known as FleetCare Truck Service Centers.
Like many companies that grow through acquisition, FleetPride had been operating more as an aggregation of small businesses than at the scale and efficiency level of a billion-dollar enterprise. The distribution centers had few standard processes or common metrics.
“Receiving, put away, picking, and shipping processes in each location were managed manually, with few daily performance measures,” recalls TBM’s Andy Andrews. “When there was a problem, the typical response was to throw people at it.”
Starting with the company’s DC in Atlanta, we worked with FleetPride’s improvement team leaders to assess the current state of the operation. Following the initial assessments, Andrews helped plan and execute a series of back-to-back kaizen events to:
“Having standardized work practices allows us to improve our firstpass yields. It allows us to have standards and consistency that we can measure activity against. And, perhaps most importantly, having standardized practices allows us to rotate people as needed throughout our distribution centers and branches.”
After looking at the efficiency of the entire shipment and handling process from the DCs to the branches, one of the improvement teams had an idea. By packing shipments in returnable totes according to distinct storage zones within the branches—which would require marginally more work in the DC— they might save significant time at the retail locations and also improve put-away accuracy. They were right. The change in shipment configurations at two of FleetPride’s five distribution centers is on schedule to reduce 129,000 labor hours at the retail branches, roughly $2.2 million in annual labor cost savings.
The company settled on a three-day kaizen event model. This approach allows the company’s DC managers the time to participate in consecutive weekly events while still keeping up with their regular job duties.
Instead of telling people what to do, the company’s managers are beginning to understand the power of giving employees ownership of the improvement process since they always know the work best. Management roles are becoming much more collaborative and focused on implementing ideas. Employees have been focusing on improving inventory management and general appearance in the company’s retail branches.
FleetPride’s improvement team created and distributed a “playbook” of best practices. Having a few “experts” go store-to-store to work on project implementations would have taken too long and delayed the potential returns.
Looking forward, the company is continuing to identify opportunities to eliminate waste and improve quality in ways that customers will notice. That includes picking, put-away, shipping and delivery accuracy.
Beyond manufacturing and distribution, FleetPride has targeted the accounts payable and accounts receivable departments for improvement, and how they add new products and part numbers into their systems.
Shorter and more consistent cycle times for adding new SKUs will allow the company to offer new products sooner, and thereby capture some first-mover market advantage.
“By adopting a continuous process improvement methodology as part of our acquisition integration, with lean as being the principle tool for that, it will accelerate synergy realization, which will allow us to do more acquisitions faster in the future.”
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