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Pure Convenience: Maynard Helps 7-Eleven Improve Efficiency, Reduce Costs
7-Eleven is the largest convenience store operator in the world, with approximately 24,000 stores. The company uses Combined Distribution Centers (CDCs) to deliver the majority of the perishable products sold in its North American stores. The 23 CDCs receive, sort and deliver hundreds of products, including bakery goods, sandwiches, dairy products and produce, on a daily basis to more than 4,500 7-Eleven stores in the U.S. and Canada.
7-Eleven had a desire to improve the efficiency of the CDCs, which are a vital part of its business operations. This was a challenge because the CDCs are operated by several different third-party partners, and 7-Eleven felt it did not have effective metrics for comparing performance to a reliable benchmark. This was due to many factors, including different facility sizes, building layouts and the variety of products handled by each CDC.
By improving CDC efficiency, 7-Eleven would reduce operating expenses and better manage the daily delivery of fresh food products to the stores, a key area of growing business for the company. It would also help to ensure accurate, timely and damage-free product delivery.
7-Eleven sought outside assistance to facilitate and execute this improvement initiative. After soliciting proposals from several consulting firms, 7-Eleven chose H. B. Maynard and Company, Inc.
Setting CDC Work Standards
7-Eleven and Maynard® kicked off the pilot project at two CDCs. The pilot approach was taken in order to provide a proof-of-concept that could be easily rolled out to additional CDCs. The objective was for Maynard to lead a joint project team of 7-Eleven resources and Maynard consultants in reviewing the processes and work methods used in the CDC. Additionally, the team was tasked to identify method and process improvement opportunities, and develop and implement engineered work stand- ards for each function. The standards would then be used to determine the productivity of each CDC and provide an accurate metric for measuring efficiencies across all the CDCs.
"Within a few months 7-Eleven's labor expense across the nine
facilities decreased by over 5 percent."
To begin the process, the 7-Eleven/ Maynard project team defined the current job methods used to perform each activity. The methods were reviewed in detail to determine differences in how they were performed by associates in the pilot facilities compared to 7-Eleven’s documented best practices. Method-improvement opportunities were identified and evaluated to determine the best available method to complete each task. If required, the company’s best practices were updated to incorporate the improvements. This documentation became the basis for creating engineered labor standards for each activity. The team used the Maynard Operation Sequence Technique (MOST®) and Maynard’s StandardsPro® software for creating engineered work standards.
Finding the Best Method
Best Methods are not determined simply by the length of an activity. For 7-Eleven, some best methods reduced the amount of time it took to complete an activity, while others improved the service or quality involved with the activity.
For example, CDCs are responsible for sorting products accurately and in a timely manner for each store served from the facility (typically between 300 – 700 stores per CDC). Products are placed in a specified location for each store, staged for loading and then placed onto trucks for delivery. Placing the right product and quantity for the correct store is vital to the company’s success, but it can also be a very time-consuming task.
At one CDC, the project team found that the time required to place products in the proper location could be reduced by reconfiguring the layout of the store locations within the facility. The previous layout required associates to travel further to place each product in the right location. When the new layout was implemented, non-value added walking time was reduced by 2.15 hours per shift — a significant improvement over the previous layout.
Using Standards to Evaluate Equipment
Another way to create efficiencies in a work environment is to review the equipment and processes involved in completing a task. Previously, to ensure products were sorted to the correct store locations in the correct quantities, the CDCs exclusively used a “put-to-light” system which indicated the specific order quantity for each product from an electronic board above each store location.
Using Engineered Standards, the team determined that labor productivity gains would result from 7-Eleven’s use of “put-to-voice” technology. With the “put-to-voice” system, employees wear a headset, and the system tells them the store location and specific quantities of each product. This technology has reduced total labor hours because associates now simultaneously walk, talk, listen and handle products. Also, the new technology is much more flexible and eliminates much of the physical equipment and infrastructure (via racking, lights, PLCs, etc.) previously required in a CDC.
Achieving Bottom Line Results
Once the Best Methods and Engineered Standards were defined and developed the project team began the implementation process. Implementation was divided into two equally important steps. The first was the development of a labor management application to both determine the CDC staffing requirements over a given time period (daily, weekly, monthly, etc.) and compare actual hours worked to earned standard hours by associate, department and facility.
The second step involved training. Associates were trained in the Best Methods for each task. The CDC management team was also trained in the new methods, but they additionally received training and practical application experience with performance management techniques and strategies.
Once the implementation was complete, 7-Eleven quickly realized significant operating efficiencies in the pilot CDC’s and engaged Maynard to facilitate the rollout to seven additional sites. Within a few months 7-Eleven’s labor expense across the nine facilities decreased by over 5 percent.
Summary
By using the MOST system to discover the best methods to complete work, Maynard helped 7-Eleven to create efficiencies and cost savings which can be implemented throughout the chain’s CDCs. And with engineered standards now firmly in place, 7-Eleven has created a structure to help ensure continued operational improvements in the future.
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