By Paul Cincoski
Director of Logistics
J&B Group, a wholesale food distributor and cold chain provider offering refrigerated transportation, third-party logistics (3PL), cold storage, and warehousing located just outside Minneapolis MN, has spent the past three years actively seeking ways to increase productivity, minimize damages, and increase associate safety.
Best practices have been generated with incentive programs, safety plans, and measuring the performance of the company’s fleet.
Overall, J&B Group’s success over recent years can be primarily attributed to the involvement of associates and drivers through every step of implementing new processes and programs. The company has found great success, with openness and honesty being the key to bringing associates on board to meet efficiency goals.
Here are a few of the company’s best practices:
Associate incentive programs
The first phase of J&B Group’s incentive program started with the order selectors on the night shift. An extensive audit process revealed a selection rate on the night shift of an average of 120 cases per hour.
An incentive program was launched to improve the selection rate. In order to determine the most effective bonus incentive, J&B Group ran a series of scenarios against an average night’s rates to determine the financial impact of increasing the selection rate. Using that data, they determined the ideal percentage to return profits to employees to make it worthwhile for both the employee and for J&B Group. It was determined that for every dollar that was saved by being more productive, the company gets 75 cents and the associate gets 25 cents (in the form of a per-hour bonus).
Since implementing the incentive program, the average cases picked per hour for the night shift has increased from 120 cases an hour to 150 cases an hour. Besides increased efficiency, the plan has practically eliminated overtime on the night shift. Associates also are held to accuracy and safety standards and any bonuses are tied to their Key Performance Indicators (KPIs), which help measure the associate’s gain sharing. Accuracy is at 99.9964%.
In the first year of the plan, the company saved $200,000 and productivity has improved 25%. Damages also have improved since the incentive program has been launched. Before the program, J&B Group was averaging $20,000 to $25,000 a year in damages. One year after implementation of the incentive program, damages went down to $4,000.
Ongoing safety audits are part of the culture at J&B Group. The facility itself has particular safety hazards due to its complexity and sectionalized nature. There also are a range of cold temperatures and a high amount of people and truck traffic moving through the facility. The safety program was recently upgraded to match requirements of the ANSI Z10 standard for Occupational Safety and Health Management systems. In the warehouse, this has included a comprehensive written safety program for powered industrial truck operation, in addition to classroom and hands-on training. Drivers also are given periodic behind-the-wheel certification testing.
Supervisors use a format to conduct weekly safety briefings as part of ongoing training. The warehouse facility and associates are audited monthly by the safety director and a member of the warehouse management team. Results are included in the safety KPI for warehouse associates. There also are mandatory stretching programs for associates, along with post-offer, pre-hire physical capability testing and controlled-substance testing.
Fleet performance metrics
J&B Group uses internal systems to continually monitor efficiency and effectiveness of the fleet, with a focus on fuel and idle time. Starting in 2002, an onboard computer system started tracking idle times for drivers. Fleetwide, the average idle time was 151 hours a week in 2005 (13.45%). In 2011, that number was 60 hours a week (5.60%). This also helped increase the average miles per gallon from 5.90 to 6.63 miles per gallon per week. A driver’s performance is tied to a KPI, which for drivers is a gain-sharing plan based on company profits, with bonuses awarded annually. An onboard computer system also tracks sudden decelerations and overrevving rpm. The onboard computer system is being upgraded in 2012 from a Cadec system to a PeopleNet system, which has increased capabilities including live tracking.
Initially, reducing idle time and overrevving was a struggle, both to help the drivers understand what the issues were and why they were being monitored. Drivers who were used to older trucks particularly struggled with not having to rev engines excessively in order to shift. One way J&B Group overcame resistance to improving metrics was by posting monthly KPI results on a bulletin board in the break room. This created incentive for drivers who weren’t meeting the standards to improve their performance in order to have a good ranking in the eyes of their fellow drivers.
Another key aspect of fleet performance is route optimization. Working with routes operating at 40% or less capacity, internal teams identified opportunities to increase capacity on the trucks. By reviewing the 10-state area J&B Group’s trucks cover and identifying places where trucks were running with low capacity, J&B Group was able to consolidate routes to increase efficiency. For the entire truck fleet, this led to an overall reduction of 136,000 miles in 2010 and 138,000 fewer total miles traveled in 2011.
Based in St Michael MN, J&B Group produces and distributes the No Name Premium Steak and Seafood line. The company’s 3PL and cold chain services include warehousing, with more than 350,000 square feet of frozen storage, refrigeration, multiple temperature zones, blast freezing, sorting, and repalletizing capabilities, as well as transportation and distribution systems available nationwide. With more than 650 employees, this second-generation, privately held company serves the retail and foodservice industry throughout the Midwest and beyond.
Paul Cincoski is responsible for all transportation, warehouse, and cold storage operations for J&B Group, overseeing more than 300 associates and three separate facilities throughout the upper Midwest. He has more than 20 years of experience in the distribution industry.