As a consultant, Mike Anderson was brought into the massive 2.3m sf PSEB Fulfillment Center as interim SVP of Global Distribution & Logistics until the new SVP could relocate to Columbus, OH from California nine months later. The PSEB operation had recently combined a second business (PacSun) in the building with the original business (Eddie Bauer), while experiencing a mass exodus of leadership talent.
As the senior leader in the facility, Anderson’s role was intended to essentially ‘run the place’ while he and his team executed a list of projects designed to improve efficiency of the operation prior to peak season. In addition to the project list, a shift expansion was being considered; adding a second (evening) shift to meet the growing production output needs of the business.
Mike Anderson, Senior Operations Management Executive
Soon after Anderson arrived in the Columbus facility, he discovered the lengthy list of ‘quick-hit’ improvement projects would be woefully inadequate to ‘turn things around’. More would need to be done; and it would have to happen fast. The tentative ‘second shift’ would morph into three regular shifts (adding a weekend shift). “This expansion had huge implications; including requiring dozens of new leadership positions, and many smaller details such as when and how to charge equipment such as scanners and forklifts,” said Anderson.
As these changes were beginning to occur, Anderson recognized that the PSEB facility maintenance team was already dramatically understaffed. The highly automated (22 miles of conveyor) facility was in the highly competitive Groveport area, and talent simply could not be attracted within PSEB’s existing pay structure.
This critical issue became even more urgent as the productive hours in the building rapidly expanded, resulting in the need for far more facility engineering manpower. Further discovery uncovered the fact that the vast majority of PMs were years behind. Day-to-day operations provided clear evidence – daily equipment failures at major pinch-points (e.g. primary sorters) resulted in production failures day after day; frustrating senior executives at both Eddie Bauer (Seattle) and PacSun (Los Angeles).
Anderson quickly determined root cause and created a strategy for resolving this critical issue; beginning with a new pay structure for the skilled talent needed to maintain the facility. “It wasn’t difficult to sell the fact that extra salary expense could be quickly offset by a reduction in non-productive labor – in other words, hundreds and hundreds of employees frequently standing around ‘on the clock’ while the MHE was down. Secondly, a critical on-site parts inventory was strategically built so repair delays could be eliminated. And finally, an overnight (deep nights on weekdays) shift was added solely for preventative maintenance programs, allowing maintenance teams to work unimpeded by other activity,” Anderson said.
On day one, when Mr. Anderson walked into PSEB, “this issue was not on anybody’s radar, much less a project list.” Within 8-10 weeks this major problem had been identified, a strategy developed and sold to leadership, and the plan was executed. “Not only were open jobs filled, but the shift expansion required the Facility Maintenance team to more than double in size to meet the needs of the business. PM schedules were brought current, thereby reducing facility downtime to nil. Production failures became extremely rare, and labor cost quickly dropped by nearly 21%, Anderson said. Both Seattle and LA were very pleased with the surprising turnaround.
Watch full video interview below.
Contact Mike Anderson via LinkedIn or his Career WebFolio.
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