Former Baltimore Ravens Coach Brian Billick hit a nerve with logistics professionals today. As the first general session speaker at this year's Warehousing Education and Research Council conference, his role was to pump attendees up with leadership tips. The tip that got most attention was his recommendation to have the right balance of chickens and pigs on your team.
You may have attended enough of these sessions to recognize this reference to the old breakfast-speaker joke about these animals' contribution to the menu of bacon and eggs. The chickens may have been involved, but the pigs were committed. Billick said that he always wanted 30% of his force to be pigs—the ones who are committed to his cause. These are the gatekeepers who set the tone for the rest of the team. They also communicate the organization's mission statement up and down the chain of command. And everyone is held accountable for delivering on the goals of that mission.
The best pigs are the ones that know how to walk that fine balance between the dangers of never doing as they are told and only doing as they are told.
This message was picked up later in the day in a session on the role of engineered standards and labor incentives in attaining performance goals. Pep Boys supplies all segments of the automotive aftermarket. It does $2 billion in sales a year, relying on five distribution centers to serve its retail and online customers. The company used to rely on team-based incentives to boost performance. However, benchmarks kept changing and employees questioned the credibility of the system—especially the pigs. Those are the workers who were 20% more productive than their “teammates.” Pep Boys realized they needed a simpler formula involving individual incentives.
Now people who do 44 hours of work in 40 hours get 80% of those extra four hours in bonus pay. People have to work at 20% above standard to qualify for incentive pay. As a result, Pep Boys' Southern California DC is working at 22% above standard in terms of units per hour. The more recently implemented systems in Pep Boys' New York DC is also 22% above standard while its Atlanta DC is working at 11% above standard. Stuart Rosenfeld, vice president of distribution and logistics, said that quality of outbound shipments in California is now at 99.8%--not quite at its goal of 99.9%.
The company is going beyond its units-per-hour targets with discrete standards supported by their cloud-based logistics management system (the ProTrack system from Tom Zosel Associates). This system is tied into Pep Boys' Kronos time and attendance system at its California, New York and Atlanta sites. The company's Indianapolis and Dallas facilities are next in line for implementation.
This is all part of a lean process initiative that entails value stream mapping. 73 best practice ideas came out of it. Pep Boys' Atlanta associates didn't realize how many non-value-adding steps they were taking in fulfillment. Receiving, putaway, picking, replenishment and loading are now standards-driven and savings are being mined from asset utilization. If an employee has difficulty meeting the standards a supervisor is sent out to observe. This helps identify reasons for changes in performance. In one case it was found that an employee was returning to work late after lunch and breaks.
As a result of helping employees stay on top of their performance metrics, Pep Boys' chickens are more engaged in their jobs. The top performers? They're the same pigs that drove performance in the old system.
It turns out that Pep Boys provided a better punch line at the end of this day of WERC sessions than Brian Billick did at the beginning. Actually it's more ironic than funny that the pigs on Pep Boys' Indianapolis and Dallas DC teams will continue the company's drive to lean process improvement.