Peter Scraton, operations director at ArrowXL, explains how a new way of working has helped the logistics company to innovate and improve its returns processes
I have always been a firm believer that people are the biggest asset to any business, and the easiest way to succeed is to exercise their imagination and key skills in an open sharing environment, regardless of what sector you operate in – be it healthcare, retail, financial services, or, like ArrowXL, in the logistics industry.
When optimizing the supply chain, it is absolutely vital for any transformation project to take into account the feedback from a wide range of departments and not only those working in operations. However, with more businesses now coming under increasing pressure to design and implement new processes as quickly as possible, it can prove difficult to take a truly holistic approach.
As a technology lover, I am fascinated by the latest innovations coming out of Silicon Valley – not just from a hardware or software point of view, but in terms of attitude to work, management techniques and employee engagement. As part of this, I have always admired Jake Knapp, who spent many years working at Google and played a key role in the development of several major Google products, such as Gmail and Hangouts. During this time, he devised and developed the ‘design sprint’, which is a time-constrained five-day process involving several team members who, as a group, answer critical business questions through design, prototyping and testing ideas.
At ArrowXL, we have used this innovative concept to introduce a slightly tweaked four-day design sprint process, incorporating people from all departments. This has been used to great effect when looking to identify pain-points, encourage best practice, shape new ways of working and ultimately increase efficiency, across a range of areas, including our reverse logistics model.
This was tackled by a 15-strong team made up of colleagues from product development, hub operations, client management, the claims division, and IT, who quickly identified 50 pain-points across our existing returns processes. They were prioritized (by way of ‘dot voting’) into seven areas before the team unpicked any problems and created solutions. This included: deploying a ‘resource flex’ model that allows the operations team to resource more efficiently according to volumes; the redesign of the company’s cancellation process so that colleagues didn’t have to spend three hours a day sorting labels by client and by piece each morning; optimizing manifest creation; the formation of a new returns dashboard within the company’s reporting tool; and enhanced communication channels to reduce backlog within the warehouse.
I’m proud to report that this specific design sprint and the subsequent solutions have led to significant benefits. While the volume of returns in the two-person market has increased by 40% over recent years, we believe the sprint avoided additional costs and improved cost per unit (CPU) to a value of approximately £333,000 (US$418,000). As part of this, efficiency across two of our sites has improved by 30%, with a third site improving by 19%. Meanwhile, we have also witnessed a 43% reduction in claims from a major client due to reduced errors when sending returns back to them. Finally, our KPI (items per warehouse hour) has improved at all three sites.
In conclusion, I am adamant that these fantastic improvements would not have been possible if any of the solutions were devised by just a few key decision makers within our business – and that is why it is vital for businesses to put their trust in their workforces. By bringing together different people from various departments, by clearing their schedules and giving them the time to immerse themselves, by encouraging them to bounce off one another and truly understand their colleagues’ strengths, we were able to maximize results.