Leveraging Lean to Improve Performance

A water solutions manufacturer leading across commercial, municipal, and industrial markets decided to undergo a network optimization in order to support the company’s growth. After in-sourcing their order fulfillment and distribution functions, the manufacturer decided to establish a 3PL partnership with Sunland Logistics Solutions to help support their growing business units to ensure quality, customer service levels, and control costs.

The two distribution centers the manufacturer had been managing were combined into a 125,000 SF operation located in Sunland’s 730,000 SF fulfillment center in Simpsonville, SC to centralize inventory and multiple value-added services, (i.e. quality testing and kitting). The operation is a part of the manufacturer’s network supporting 5 of their service centers in addition to major retailers such as Amazon & Home Depot.

The Problem

With the transition, Sunland inherited a backlog of orders estimating $2.4M in revenue and the Product Availability performance metric to service centers was 50% at the start of the operation.

The previous operations teams had relied heavily on tribal knowledge and lacked standardization. This led to quality errors and reactive vs. proactive order management across the customer’s network.

The Solution

Ultimately, leveraging Lean methodologies and establishing proactive planning communication channels with the customer helped turn performance around.

Team Problem Solving
Organizing a collaborative team problem solving exercise, or a “kaizen,” was the first step to improving performance. A cross-functional team with both Sunland team members and members from the customer’s team was assembled to first fully understand and align on the “why,” and then develop solutions together.

Empowering Team Members with Lean Training
All of the Sunland team members supporting the customer’s account received Lean training. This empowered the team members to “see waste,” gain a deeper understanding of why visual management is important, and how to use some valuable lean tools, i.e. visual work instructions.

Visual Management
Visual Daily Management (VDM) Boards were implemented to help the team know the “score.” Safety, Quality, Productivity, Delivery, Cost and Team Members (SQPDCT) management process is used to keep the operations team members well informed of current status’ and needs. This process creates a tangible connection between floor operations and business performance.

All key processes impacting both Inbound and Outbound departments are reflected showing the plan and the actual results for each hour of the day so potential problems are made visible and able to be resolved before having an impact on Customer KPIs.

Including Proactive Planning with Customer in Leader Standard Work
One of the most important counter measures implemented was incorporating proactive planning calls in leader standard work twice a week with the customer’s procurement team. The increased communication and distributing an optimized level of fast moving inventory to be held at each of the service centers has had a significant positive impact on the network’s ability to fill orders quickly.

The Results

With the addition of some IT systems enhancements, establishing a strategic partnership founded in Lean methodologies enabled Sunland to help their customer reduce costs and improve their customer service levels.

  • 99% decrease in order backlog
  • 30% reduction in monthly costs
  • 45% increase in product availability

Sunland and the customer’s team have earned recognition and received an award from the customer’s global parent company for the team’s Continuous Improvement achievements.