DATA, ROBUST PROCESSES AND INCREASED PRODUCTIVITY
CASE: COOP Distributionscenter Albertslund
From oceans of data and no answers to fact-based planning Together with 4IMPROVE Consulting Group, COOP embarked on a cultural voyage in leadership. One of the destinations was a pilot project undertaken at COOP’s Distribution Center in Albertslund. The first step entailed an assessment to identify challenges with planning by analysing core data and the flow of information, as well as mapping internal processes. COMPETETION IN THE GROCERY SECTOR COOP is Denmark’s largest retail company, with an annual turnover of 54 billion DKK, and approximately 40,000 employees. COOP’s Distribution Center in Albertslund supplies goods to 250 stores. To ensure that the stores receive the right products on time, a solid overview and effective planning is vital. If there is not enough staff in the warehouse, they cannot pick and pack as necessary for the scheduled deliveries. Conversely, salary costs are affected if too many employees are called in to work. Competition in the supermarket sector has increased drastically over recent years, and this places massive demands on effectivisation throughout the entire COOP organisation. It is therefore even more important to find the right balance between capacity and load on a daily, weekly, monthly and yearly basis – and an exercise of this kind requires an extremely precise planning cycle. A WHOLE MASS OF DATA, BUT NO VALIDITY At the Distribution Center in Albertslund, all 170 employees work in two teams. The planning involves two sub-processes: identification of load (what should be picked and when?), and capacity (allocation of resources in relation to working hours and handling unplanned situations, such as task changes and illness). Load is also affected by factors such as seasonal goods, holidays
and festive periods, campaigns from Head Office, specific orders from individual stores, and an imbalance in the number of packages that should be delivered on each weekday during the year. Over many years, staffing plans have been determined by predictions based on previous years’ history and what employees have experienced in their jobs. This has made planning vague, too dependent on individuals – and sometimes even inaccurate. Moreover, the planning has been undertaken using various selfdesigned and incoherent systems, with manual workflows. These factors have raised the risk of error in data input and made it challenging to acquire valid data – and therefore difficult to have a factual basis for long-term planning. In order to map out and render potentials visible, COOP used 4IMPROVE Consulting Group to analyse the core data, flow of information and internal processes. Kim Heide Rasmussen, Distribution Manager says: “The collaboration with 4IMPROVE was a successful journey. We started with 2-3 consultants but gradually, as we got on with the process, we didn’t need as many. They all did very well but especially Nis Kampp, whom we had working with us the longest. He demonstrated a lot of professional and people skills. Many of our employees gained very good input, and the focus was constantly on improvements.”
Low efficiency in picking and packing. Inaccessible data from incoherent, partly self-developed systems with manual workflows. Capacity planning based on historical data and personal experience from the job, right up to the day before delivery. Risk of errors in data and decision-making.
Consolidation of planning data. Increased automation so time is spent efficiently on reaching the right decisions instead of gathering data. Open dialogue with staff about change as a means of securing the company’s future, as well as training employees in the new systems to ensure they take ownership.
Real-time data, meaning fact-based decision-making. A mobile planning platform and shared basis for resource planning for the entire Distribution Center. More effective use of staff time through effective planning. Staffing is reduced by a double-figure percentage, whilst productivity output remains the same.
It became apparent that a lot of data was available, with many methods to extract it, and different types of tools. However, the tools had been designed for the needs of the individual sections, with absolutely no coherence across these different departments. This lack of coordination meant that things could be extremely busy at one end of the Center, whilst at the other end, people were being sent home. The processes had not been described, and no one could predict how the day would transpire before it was over. FACT-BASED PLANNING AND DECISION-MAKING By departing in a valid base of core data, information flows and internal processes, a Power BI planning tool and data model was implemented. During the development process, employees were trained in using the various tools and have succeeded in taking ownership of them. Albertslund Distribution Center now has a complete overview of load and capacity. When the following day’s orders have been received and sorted into routes, the load is calculated and resource requirements are planned. Coop has an overview of staffing, and based on the ongoing receipts for the completed picking and packing, it is possible to follow other tasks, and make necessary adjustments. By predicting load and ensuring the correct staffing levels, the planning tool has created a correlation between load and capacity, which means increased efficiency in picking and packing.
Lars Rowland Brandi, Head of Planning at COOP in Albertslund, comments: “In the past it took two employees eight hours over several days to retrieve data from six different systems, all in different formats. If a new simulation had to be made, we had to start from the beginning. Now this practice takes only two hours and creates a much better result”. The Power BI solution has been a reality since May 2017 and the results are clear: • A shared basis for resource planning for the entire Distribution Center • Less fire-fighting in the form of overtime for warehouse staff and hiring temporary staff GENERIC LEARNING The pilot project in Albertslund has generated impressive results, and COOP expects to implement the same solution within the six other Distribution Centers in Denmark. “It was a very good process with clever and highly-experienced consultants who learned all about COOP quickly, and were able to visualise the whole system, meaning that they could both help and challenge us”, explains Manus Juhl Thomsen, Project and Technical Manager at Albertslund.
The biggest difference in daily operations is quite clearly that time is used to reach the right decisions, instead of spending time on extracting data”. Lars Rowland Brandi, Head of Planning
It really surprised me how quickly 4IMPROVE’s consultants managed to piece everything together. They were able to visualise, illustrate and explain it all to us at COOP”. Manus Juhl Thomsen, Project and Technical Manager.
It became clear early on that there was an openness between COOP staff and 4IMPROVE’s consultants. They quickly found a way to cooperate, which is vital in these types of tasks. For us there is absolutely no doubt that 4IMPROVE has raised our level of knowledge about our own systems, and through our cooperation we gained a great deal of inspiration”. Kim Heide Rasmussen, Head of Distribution.
THE FUNDAMENTAL IDEA: To identify the potential of analysing and validating data, and at the same time build a solid base for core data with robust processes. Develop an operational concept based on validating and digitising decisionmaking to reach the right decisions. All in order to manage the complexity of it all.”. Nis Kampp, Director, 4IMPROVE Consulting Group www.4improve.com