Great customer service makes Amway's direct selling business model enormously successful. Access Business Group (ABG) makes sure the right products are received by Amway's three million independent distributors on time and in perfect condition.
ABG, Amway and Quixtar, Amway's affiliated online retailer, are part of Alticor, a privately held holding company formed in 2000. The group of companies is headquartered in Ada, Mich. near Grand Rapids.
Amway and Quixtar sell beauty, household, food and nutrition products worldwide. ABG manufactures vitamins and cosmetics for Alticor, and provides contract-manufacturing services for other clients. It also handles distribution for unaffiliated companies.
Trucks carry ABG's manufactured goods a few miles to its main DC. The Ada DC territory covers the Northeastern United States. It also ships goods to service centers in Atlanta, Dallas, Southern California, Seattle, and Hawaii. Nutrition and food products are manufactured in Southern California and shipped to all of its North American service centers. Products from both manufacturing plants are shipped to and distributed by Amway affiliates worldwide. The Ada service center is open Monday through Friday and runs two shifts.
Through word and deed, ABG puts employees first. The company credits workers for their exemplary customer service and provides them with training and educational development programs. ABG has an Operational Excellence program based on lean and Six Sigma principles. Everyone in the Ada DC received awareness training.
"We took the green belt training right down to the floor; 10 to 15 of our hourly workers are certified as green belts," says Leroy Shively, manager, North American Service Center. "They went through the entire training, ran a successful project and received their certification as green belts. We have been able to redeploy them on second, third and fourth projects. There are more employees working in the service center that have gone through the training, but are not certified. They are content experts and process facilitators. More than half of our staff has been involved in a green belt or black belt project," he says. ABG has 180 workers on the floor.
It is also completing the first year of its performance-based pay incentive program. The program offers workers a base rate with incentives based on quality and cost-saving metrics. Shively says the program has already improved ABG's efficiency.
It is easy to understand why ABG has low absenteeism. The company says it hires good people and strives to keep them. Its full-time workforce averages 22 years of service. The company completes 99.6% of orders correct, on time and damage free. It is continually seeking ways to use technology effectively and efficiently to support customer service, employee initiatives and its pro-active quality assurance program.
Products and Processes
ABG uses many picking methods to pick more than 40,000 SKUs, ranging from clothing and shoes, to soap and vitamins-a varied product mix of many weights and sizes. All picks are checked for accuracy as part of its quality assurance program. Pick-to-tote items go through a tilt-tray sorter and are visually inspected by packers who make sure order items and quantities are correct. Because the weight is known for all of the items in its pick-to-light, CAPS and A-Frame systems, these orders are weighed for accuracy before being shipped. The entire building uses RF and automated-guided vehicles.
ABG's cycle-delivery program covers every address in the United States. All products are delivered on a regular schedule on the same day each week, as long as the order meets the drop schedule deadline. For example, if a customer's drop date is Wednesday and their regular delivery day is Friday, as long as it places the order prior to Wednesday 12:00 a.m., it will receive the order on its regular delivery day. Orders placed after the deadline are received the following Friday.
ABG's orders are cyclical, with 40% of product going out in the first week of the month; the rest of the weeks in a month average 20% each. Temporary workers are employed for the heaviest shipping week each month.
ABG is investing in a new warehouse management system (WMS) that includes a labor management component to track progress and allocate workloads. It uses a homegrown system today, but realizes it needs to reach a higher productivity level.
Access Business Group At a Glance
- Age of company: 40
- Years facility has been in operation: 12
- Total square footage: 635,000 sq. ft.
- Annual revenues: Privately held company
- Days of operation per week: 5 days (2 shifts)
- Number of employees: 280