Standardizing warehousing operations to improve speed and service
TJX Canada works with four different third party warehousing companies (Service Centres) across the country to help distribute goods to their retail stores. Each Service Centre felt there was opportunity to improve their service levels so they invited Carpedia in to help determine best practices regarding process, layout and labor utilization across the network.
Due to TJX’s business model where each store receives new product on a daily basis, there is significant complexity for ensuring that tens of thousands of cartons are sorted properly and delivered to the correct store with only a 24 hr turnaround time. The team was tasked with travelling coast-to-coast to understand current practices and help develop the go-forward operating model to allow each Service Centre to keep up with TJX’s double digit growth.
Managing the demands and balancing the requests of 5 different companies to agree on a standard operating model was no simple feat, but 35 unique changes were developed for implementation across the network.
A large component of the engagement was the creation of a labour planning tool to give visibility to the Service Centres and allow them to flex their staff on a daily basis due to the high volume fluctuations that are the nature of TJX’s business. Dependant on the volume being received on a daily basis, the tool not only shows exactly how many people are required for the given day, but also what roles & positions they should take for the most efficient transfer of cartons through the Service Centres.
With the changes put in place, the Service Centres can see anywhere from a 12%-24% productivity improvement which directly helps their bottom line profitability. Some of the other changes helped improve the turnaround time so approximately 20% of product is received at a TJX store a day earlier than in the past; this is a big win for the company where quick turnover at their retail locations is a strategic advantage.
Overall, this engagement also helped bridge the strength of the entire network. Although the 4 companies that run the Service Centres are competitors in other parts of their businesses, engaging an unbiased 3rd party to come in and investigate best practices and share learnings across the network allowed them all to see benefits that they would not have seen had they attempted this alone.