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Tackling Inefficiency: A 40% productivity increase by reducing absenteeism and staff attrition

Company Background

As the number one supplier in omnichannel technology solutions, our client supports leading retailers and retail brands in managing their e-commerce operations.

Using advanced technologies, they aim to streamline and simplify order and inventory management processes, providing a personalised brand experience from checkout to delivery and beyond. By seamlessly orchestrating the customer journey, they help their clients stand-out, building brand loyalty through improved speed and efficiency to meet customer demand.

The Challenge

From its UK distribution centre based in Greater Manchester, our client manages the fulfilment for a range of top retail brands. Flexibility in its temporary staff is key in meeting changing business requirements and to provide the highest quality of customer care.

There has been a surge in online ordering, with some affected by store closures and/or surges in dependence on online ordering due to the COVID-19 pandemic. 2020 also saw a change in shopping habits, with the traditional September kick-off for the peak period moving back, extending the duration of that trading peak.

Operational agility is essential: with temporary (production operative) staff assigned to work with specific customer brands, the inability to share staff across different brand lines had become an unnecessary limitation on productivity. Shifting demand patterns within the brands led to staff being either underutilised or overutilised in peaks and troughs and therefore driving up attrition rates. Absenteeism with poor attendance, particularly on weekends also left them with unexpected and short-notice shortfalls in staff.

Extensive research led by Blue Arrow’s Account Manager with feedback from exit interviews and on-site employees revealed that the workforce felt undervalued and that their training needs exceeded the current training methods

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The Solution

Blue Arrow recommended a series of operational changes, which the client was able to implement quickly resulting in immediate improvements in productivity and reliability. A permanent on-site presence, comprising a dedicated Blue Arrow Account Manager and two Account Coordinators was set-up to oversee recruitment and training and to provide ongoing management of the temporary workforce.

To manage the volume of work while improving employees’ work/life balance, the team introduced rotating shifts, introducing a longer day from 6.30am to 11pm and extending the working week from Sunday through Friday, giving all staff reliable working patterns and days off.

Initial induction and training procedures were improved and ramped up to provide ongoing support to new-starters. New-starter training, typically a half-day shadowing session with existing long-service staff for on-the-job training was replaced by a week-long induction programme, undertaken by specially trained staff selected and managed by Blue Arrow. New-starters were given coloured high-vis jackets to wear for their first four weeks, allowing supervisors and team leaders to easily identify new staff in the large warehouse to facilitate offering of further support when required.

The Journey

The Blue Arrow Account Team quickly went from managing 40+ customer service and 80+ warehouse operatives to overseeing 360 staff. Staffing requests were often placed ad-hoc at short-notice, forcing a reactive approach to fulfilment.

The information gathering exercise undertaken by the Blue Arrow team identified key reasons for poor morale, staff absenteeism and high attrition rates. Working long shifts consecutively and pressure to work on days off was triggering sickness, and absenteeism. At the other extreme, lack of work and stability of hours was impacting retention.

In addition to better training, two Lead Associates were appointed to work alongside different shifts to motivate and help staff and to undertake attendance and performance checks, which has boosted shift productivity.

Cross-training for staff across multiple client brands was introduced, enabling work demands to be met from within the existing workforce, retaining skilled staff and developing their experience.

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The Result

The changes instituted by the modification in shift rotas, staff management, new-starter training and cross-brand training, gave the client the flexibility needed to meet order volumes while improving staff conditions and morale.

Segmenting the workforce into 9 teams allowed for predictable six-weekly cycles of working days and hours with staff taking it in turns to work Sundays. By extending the working week and making overtime voluntary, absenteeism has been reduced from 10% to 2% from 2019 to 2020 which has also increased productivity. Attrition rates have been reduced from 25% down to 10%.

These changes, in conjunction with the reduction in absenteeism and a larger headcount, saw productivity rise in 2020, with 14,000 hours per week delivered, an increase of 4,000 hours over the previous year. A 40% uplift in fulfilment hours has pushed up throughput, enabling additional recruitment and training costs to be contained within existing budgets.

“Blue Arrow has successfully boosted our profile as an employer locally and introduced operational changes that have delivered significant productivity and efficiency gains while introducing more flexibility and gaining high levels of employee commitment.”

- Site Director

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