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Finding the Right Employee Organizational Structure – HR Case Study

Finding the Right Employee Organizational Structure – HR Case Study

Finding the Right Employee Organizational Structure – HR Case Study

Introduction
One of the companies the Alpine team has worked with, came to us with a challenge – unbalanced distribution of labor. Their current organizational structure differentiated between hourly employees by department. Most of their employees were categorized as warehouse workers (75%) while the rest were material handlers (25%). The different job classifications meant there was a difference in pay and hence there was no sharing of labor between departments which led to staffing challenges throughout different times of year. In one department the employees were working overtime, yet another department was dismissing people early because they were out of work.

Additionally, they were expanding their business and anticipated this distribution of labor to be an even bigger problem in the future.

Challenge
The challenge in front of us was pretty evident – how to create an organizational structure that allowed for labor flexibility between departments while at the same time reduced employee labor costs. While the problem was simple to see the real problem was in ensuring they remained the employer of choice to attract and retain qualified, experienced hires as they were in a very tough labor market. Moreover, these changes had the potential of having a negative cultural impact on current employees and so the decisions and communication of such were very important.

Solution
As we looked for the best solution, we started by gaining a good understanding of their current structure and operations:

• Skillset necessary at the function level not just department
• Current and forecasted employees across departments
• Current pay for all employees
• Similar jobs in the market and associated pay

After reviewing the data, we noticed two trends, most job functions were either relatively easy and could be learned in 30-60 days, while the others required equipment and were more complex processes. Given this, we recommended a structure that differentiated the employee based on the types of tasks they would be doing, regardless of department. The new structure would have both warehouse workers and material handlers. A warehouse worker would be on equipment and/or completing more complex tasks such as Quality Control and a material handler would be executing the less complex tasks that didn’t require equipment. This added a presence of material handlers throughout most departments which allowed for flexibility when volume increased in certain departments but not the whole warehouse. It was calculated that after the transition, the hourly makes up would be 60% warehouse workers and 40% material handlers.

Benefits/Results:
The new structure allowed them to share labor across the warehouse which resulted in the following saved labor costs:

• Savings of $3.4M in labor costs realized over 18 months
• Overtime savings were also calculated at $1.2M realized over 12 months

Additionally, the new structure allowed them to add temporary employee support at a tiered rate yielding additional savings.

Mark Andy – Selecting and On-Boarding 3PL for Next-Day Service

Mark Andy – Selecting and On-Boarding 3PL for Next-Day Service

“Working with Alpine to accomplish this 3PL selection and onboarding project exceeded our expectations. Our very aggressive goal was to select and onboard a 3PL before May.” said Stuart Gallup, Vice President for Mark Andy.

Stuart Gallup,

VP of Mike Andy Print Products

Mark Andy – Selecting and On-Boarding 3PL for Next-Day Service

About Mark Andy
Mark Andy is a pioneer of the graphic arts and printing industry and is the world’s leading manufacturer of narrow- and mid-web printing and finishing equipment. Through their division, Mark Andy Print Products, they supply all their offset and flexographic customers with parts and a complete line of pressroom supplies.

Challenge:
Mark Andy wanted to provide their customers with next day service. With their main facility located in Des Plaines, IL, they knew they were going to need to partner with a third-party logistics provider (3PL) to provide additional locations to support their national customer base. Mark Andy was unaware of how many locations were needed and what level of inventory was required at each facility. Additionally, the company wanted assistance with soliciting, selecting and on-boarding a new 3PL. Mark Andy turned to Alpine to perform these services to ensure a network that could provide a 98% next day service for their customers.

Solution:
Mark Andy and Alpine conducted a Network Analysis to understand where Mark Andy customers were located and to determine the ideal number of facilities and inventory levels required to provide their network with a 98% next day service window.

With the information from the Network Analysis, Alpine then developed a 3PL RFP, which was used to solicit, negotiate, and select a 3PL. Alpine supported the on-boarding of the 3PL with regards to Space, Equipment, Labor, and Systems across all five locations. Alpine conducted the first 90 day QBR to ensure the partnership was heading in the right direction and on track with the metrics of success.

Benefits/Results:
Mark Andy had a tight deadline for the project and Alpine created a fast timeline, accordingly. The Network Analysis was completed in the fourth quarter of 2018 and the RFP process was completed in less than 60 days. All five of the new 3PL facilities were on board and running by April 1.

“Working with Alpine to accomplish this 3PL selection and onboarding project exceeded our expectations. Our very aggressive goal was to select and onboard a 3PL before May,” said Stuart Gallup, Vice President for Mark Andy.

“Alpine thought of everything that was needed to be addressed and walked us through every step of the process, Gallup continued. “They worked with Mark Andy’s best interest in mind and ensured our 3PL partner was able to meet our needs.

Mark Andy – Selecting and On-Boarding 3PL for Next-Day Service

Mark Andy Print Products

“In this particular case, the entire scope of the project changed from when the initial assessment was done. Alpine was able to coordinate between subject matter experts, operations personnel, and senior leadership to make new information available to all for transparency and planning purposes.”

Stu Gallup,

VP of Mark Andy Print Products

Mark Andy Print Products

Mark Andy is an industry leader in the manufacture and sale of flexographic label printing presses globally. The company first and foremost designs award-winning label presses and follows up by providing the consumables, parts and supplies required to produce superior labels. The labels and packaging produced on its equipment are found everywhere on products you use daily, including retail and food packaging, as well as lottery tickets.

The main distribution center for consumables and supplies is in Des Plaines, IL. Mark Andy Print Products, as its supplies division is known, offers over 10,000 products that are processed through the 100,000-square-foot distribution center that services the globe with support from six strategically located 3PL providers, plus an owned facility in the UK.

Challenge:

Mark Andy’s facility lease for the Des Plaines distribution center was coming due at the same time as the company acquired a new business. The company needed to rethink the storage and picking methodologies in the Des Plaines facility and then compare options of working with the existing facility or moving to a new distribution center.

Getting a true analysis of their needs was a challenge because Mark Andy had limited SKU dimension data available for existing products. Add to that the challenges of integrating a new business into the mix, and the company was faced with many questions, about the appropriate space, equipment and labor needs for the business. Is there enough space to store all the products? What equipment will I need to store, pick and ship? And how will these new products impact labor?

Mark Andy had multiple goals for the project:
1) Right size the facility while redesigning the forward picking to better meet the shipping needs of their customers by improving productivity. They also wanted to increase responsiveness for later cut-off times to accommodate later orders from customers in different time zones.
2) Decrease replenishment cycle times to keep pick areas full for order pickers and minimize replenishment labor.
3) Dismantle and rebuild rack/shelving without interrupting current operations.
Solution:
With their lease coming due, Mark Andy took the opportunity to right-size the Des Plaines warehouse to meet their new needs, and chose Alpine Supply Chain Solutions to perform a Storage Type Analysis and a Slotting Project to create the right-sized product homes and place the right products into the right locations. Many factors were considered, including:
● Limitations of the existing site
● Adequacy of current picking and storage methods
● Limited data for existing product requirements
● Understanding new requirements based on new products and new customer expectations

The project changed dramatically when, months into the process, Mark Andy acquired two additional businesses to blend into the fold. Leases were ending, product was moving and planning the new distribution center could not stop. The scope of the project changed to bring in product for three new businesses, redesign and reshuffle the layout, all while continuing to ship product without interruption.

“Integrating new businesses can be challenging, and absorbing three new businesses in a few months’ time doesn’t make it easier. What happens in my DC when SKU growth triples overnight? The concerns are always the same; space, equipment, and labor,” Said Ron Rafe, Logistics Leader for Alpine Supply Chain Solutions.

Stu Gallup, Vice President Commercial Supplies who was leading the project at the time stated, “In this particular case, the entire scope of the project changed from when the initial assessment was done. Alpine was able to coordinate between subject matter experts, operations personnel, and senior leadership to make new information available to all for transparency and planning purposes.”

Storage Type Analysis:
Alpine performed a Storage Type Analysis to determine the ideal size, type and quantity of storage media to meet a specific ‘inventory on hand’ in forward pick strategy. The output of the Storage Type Analysis drove the new facility layout design by knowing the ideal size and quantity of shelving, hand-stack, half pallet, full pallet, and reserve racking required.

The Storage Type Analysis started with Alpine providing information about Mark Andy’s 3,500 original products to Cubiscan for detailed analysis of dimension, weight and cube. Cubiscan data allows for confidence in the SKU dimensional data and a successful Storage Type Analysis. After the acquisitions mid-way through the project, timing did not allow for Cubiscan data on the products from the newly acquired companies, so Mark Andy allowed for proxy dimensional data to be used for those dimension inputs.

Slotting:
Slotting optimization takes detailed SKU data, including size, shape, and velocity, and assigns SKUs to their ideal pick location based on each SKUs unique characteristics and forward pick requirements. Unit Movement and Hits are the primary drivers of a SKUs final home, but inventory holding targets are also a valuable input. Applying inventory rules based on individual SKU ABC categories assured the right products were assigned the right pick home size and location within the distribution center. At Mark Andy, some of the C moving product inventory holding requirements were bumped up, which eliminated the need for Reserve locations, thus reducing overall handling.

A byproduct output of a slotting project is an organized location addressing scheme, which Mark Andy leveraged to purchase rack labels, totem labels and aisle markers.

Moves support
Alpine also provided Moves Support with on-site leadership of the facility moves from item ‘move label’ generation to rack labeling and quality control of the final moves. Maintaining existing operations while tearing down and rebuilding their entire operation is why Mark Andy leaned on Alpine to provide Moves Support. Resource availability was one concern and experience moving entire operations was another. Mark Andy management could focus on maintaining excellent customer service while Alpine focused on maintaining product availability.

Benefits/Results:
With help from Alpine for Storage Type Analysis, Slotting and Move Support, Mark Andy was able to ship to existing customers uninterrupted while the facility changed in front of them. The Storage Type Analysis right-sized the forward pick locations allowing for the absorption of additional SKUs from the newly acquired businesses. Slotting allowed for the right product storage in the storage racks, individual bin locations, or in bulk pallet storage, maximizing picking productivity.

“Alpine has a well-rounded team that understands all aspects of supply chain operations as well as current industry standards. They were able to rapidly respond to changing information in a very dynamic environment, and provided the best solution at a given cost which increased our ROI.”

o Challenge
▪ Right-size the building for upcoming lease renewal (80K – 240K SF). Absorb multiple new businesses, increase picking productivity while dismantling and redesigning the entire facility. Never stop distribution operations and increase service levels. This included office space and manufacturing areas. The project also included a physical inventory reconciliation in the process, so inventory control had to be first established and managed going forward.
o Solution
▪ Storage Type Analysis created the right-sized product homes while Slotting put the right product in the right location all under supervised guidance.
▪ On site move support provided needed resources to complete the project while maintaining on-going operations.
o Results
▪ Shipping continued without pause or interruption; every new product had a new home while picking and replenishment productivity increased overall.

About Alpine Supply Chain Solutions
Alpine Supply Chain Solutions, based in Chicago, IL is a supply chain consulting company driven to ensure our clients get the most value from their supply chain investments. Our approach to every project starts with the data and ends with a cost justifiable solution. With deep roots in industrial engineering, Alpine’s approach is unique. We work with customers to optimize their facility and operations.

Alpine offers service in these areas:
● Warehouse Consulting Services – including best practice assessment, storage type analysis engineered standards, slotting, facility design and layout and more.
● Supply Chain Strategic Planning – including distribution network analysis, strategic master planning and relocations services.
● HR Solutions – including Workforce management and metrics, talent management, training, compliance and more.
● Supply Chain Systems – including software justification, requirements and selection; implementation support and upgrade services.

Alpine’s approach is unique. For more information please call us or visit the company web site www.AlpineSupplyChainSolutions.com.

90 Day WMS Challenge

90 Day WMS Challenge

“We knew we had a tight timeline and needed to leverage a partner that could help us hit those timelines. Alpine really came through for us.”

Bob Moran,

President of First Logistics

90 Day WMS Challenge

About First Logistics
Founded in 2003, First Logistics started as a Public Warehouse focused on pallet in-and-out services, with no transportation or value-added capabilities. In 2015, the company restructured and expanded its offerings to include transportation services and value-added capabilities to serve a wider range of customers, including more case pick business. Since then, the company has experienced twelve-times sales growth and dramatic increases to profitability.

Challenge:
First Logistics was constrained by the technology with their in-house built Inventory Control System. With the growing business came needs for more robust warehouse management capabilities. Plus, the home-grown system was dependent on outsourced partners. Productivity and space utilization also had room for improvement.

First Logistics was also facing human resources challenges with finding, training and retaining good employees. They wanted to develop hiring and training processes that would fulfill their future staffing goals and prepare the team for the new technology and processes, including gamification and ddigitized training tools.

Solution:
First Logistics went on the hunt for a new warehouse management system, and tapped Alpine Supply Chain Solutions to lead the search for a tier-one WMS that would be the best fit. As a team, Alpine’s expert consultants have selected and implemented more than X warehouse management systems over X years.

Alpine leveraged its industry knowledge and existing tools to speed the selection process and to ensure the best solution was selected and properly implemented to maximize ROI for First Logistics. As a 3PL, First Logistics has complex distribution demands from its customers, including lot control and expiration date demands, kitting and other value-added services, and the company needed a tier-one WMS that could provide real-time inventory and daily performance updates through the customer portal.

For the first step in the selection process, Alpine identified First Logistics’ unique requirements and other drivers that were important to their business. These requirements were used to develop an RFI that was used to solicit answers and budgetary costing from ten vendors.
With that data in hand, Alpine then leveraged the HighJump WMS RFP Template as a baseline and created a customized RFP based on First Logistics’ specific requirements. Alpine sent the RFP to five vendors and offered them the opportunity to meet with the executive team and tour the facility.

Upon receiving the RFP’s, clarifying the answers and scoring the RFP responses on both quantitative and qualitative scoring, four WMS vendors were invited to perform a half-day demo of key functional requirements for the selection team.

First Logistics had several key functional requirements that are vital to third party logistics providers, including Billing Management. Two of the WMS vendors had this functionality built directly into the WMS, and the other two vendors had this as a separate module. Through the process, we also learned that two of the vendors were “Table” driven and the other two vendors were “Process” driven, or turning flags on and off.

For the final decision, Alpine took into consideration the demos, references, integration abilities, ease of implementation, the technology stack, and hardware requirements for each of the four vendor candidates. First Logistics chose to purchase Manhattan Associates SCALE WMS, and with Alpine began planning to implementation. First Logistics had a goal of bringing some of their customers live in October before the busy holiday season. With this goal, they dedicated a team to focus 100% on this project, which allowed for a shortened timeline and the ability to go live in just five months.

Benefits/Results:
Alpine helped First Logistics select a tier-one Warehouse Management System in 90 days, and then proceeded to go live in five months and come in under budget. The WMS installation kicked off the first week of May and went live with the first customers in October.

“We knew we had a tight timeline and needed to leverage a partner that could help us hit those timelines,” said Bob Moran, President of First Logistics. “Alpine really came through for us.”

The new WMS provided First Logistics with the foundation to support their continued growth and provide several benefits, such as:
– Real time inventory
– Elimination of manual data entry
– Directed task management & Task-Interleaving
– Capture the cost of VAS/Kitting
– Ability to automate the monthly invoicing of their customers
– A portal for customers to place orders, check the status of orders, and validate their real-time inventory.
– Develop training processes using Manhattan’s Knowledge Management Tool

Not only was the project on-time and on-value, but it allowed First Logistics to support their continued growth and offer additional service to existing and new customers. This included the Customer Portal, where their clients could enter orders, see order status, and validate current inventory levels.

Future Plans:
In addition to providing full 3PL services such as Order Fulfillment, Kitting, Assembly, and consolidation, First Logistics will continue to manage depositors’ inbound transportation, such as Brokerage Operation, including ocean Containers, drayage, and truckload, and will also move towards managing final mile delivery.