Distribution Center Transformation- A $360M discount retailer replenished regional stores from a 500ksf distribution center. With thin retail margins, profitability depends upon highly efficient operations. The company adopted a JIT model to sharply reduce inventory on-hand, but throughput was insufficient to handle the volume, resulting in a highly congested facility that ramped up costs, turned profitability negative, and left stores with bare shelves. It needed expertise and hands-on support to turnaround the operation.

On-site work over 4 months included a complete facility redesign to improve material flow, including inbound, garment processing, case picking, returns, and outbound work areas, process re-engineering and training, implementation of real-time productivity metrics and work schedule displays, and Lean Concepts training for all managers, supervisors, and associates, as well as conceptual designs for future replacement of automated sortation systems.

The transformation started in Receiving and progressed through the facility, increasing throughput by 35%. The client reported its best month, quarter and year in its history, and became profitable. Based on a follow-up, productivity continued an upward trajectory, gaining another 20% improvement in distribution throughput YOY store sales increased by 11%. Projected cost savings would allow the company to self-fund a new automated sortation system.