A Fortune 25 pharmaceutical distribution company sought to initiate a Continuous Improvement (CI) program throughout their entire Distribution Center network, focusing on Quality, Efficiency, Self-sufficiency and Embedment of CI culture.
Background and Challenges
A leading pharmaceutical distribution center dealing in thousands of transactions on an almost daily basis, was looking to embed a continuous improvements culture within their organization while focusing on quality and customer needs. The culture and business emphasized speed over quality, and the company sougth to change this culture.
The company asked Tefen to help it establish the CI infrastructure for the Distribution Center (DC) network by creating a common vision, appropriate metrics and scorecard, shared best practices, superlative communication, train and launch of a CI management team, with site implementation including diagnostics through sustain steps at 8 distribution centers.
Tools & Methodologies
Tefen introduced CI and Q360 to all associates at 8 DC Kick-off meetings and Town Halls.
At individual DCs, Tefen conducted diagnostic exercises including MOS, root cause analysis exercises and some Kaizen events; then determined improvement opportunities, engaged workstream teams for site specific solutions and implementation.
Moreover, CI managers gained proficiency through training and working in tandem with Tefen team at initial 4 DC sites. Tefen also provided support function as other sites.
Specific improvement initiatives varied by DCs included:
- Reduction in internal damages: Impact felt in all departments among all DCs
- Training and onboarding: Tefen established cross functional matrix, skills matrix and onboarding protocol and checklist
Outcomes/Results
The implementation of a Continuous Improvement culture yielded some fantastic initial results, particulary in:
- Reduction of internal damages
- Reduced OT in returns area
- APS optimization and reduced error rates
- Improved wave replenishment
- Worker eagerness to participate in Kaizen and improvement opportunities
- Improved onboarding and cross training
- Better safety awareness, improved communication among tiers
- Use of visual management
Furthermore, the CI project resulted in these particular results:
- Realized network cost savings on internal damages – $0.9m in the first 3-4 months – initiative’s ROI 1 to 6 (if target of $3M is achieved by end of year, ROI will be 1 to 20)
- Overtime reduction by 25% in Columbus Returns team; # of unsigned RAs ↓ by 94%
- APS error reduction by 62% in Columbus
- Right First Time at DC site increased from 83% on average to 94%
- Wave replenishment improved by 70% at DC
- Ongoing efforts: internal damages reduction, case pick optimization, 6S in specified areas, wave replenishment (new targets)
