Continuous Improvement Network Launch 

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 its organization while focusing on quality and customer needs. The culture and business emphasized speed over quality.

Tefen’s role was to 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 and Methodologies

• Introduced CI and Q360 to all associates at 8 DC Kick-off meetings and Town Halls
• At individual DCs, 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.
• CI managers gained proficiency through training and working in tandem with Tefen team at initial 4 DC sites. Provided support function as other sites launched.

Outcomes/Results

Implementation of a continuous improvement culture yielded some fantastic initial results, particularly 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, and use of visual management.

Results include:

• Realized network cost savings on internal damages – projected ROI end of year 1, ROI will be 1 to 20)
• Realized network cost savings on internal damages –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)