UNFI Seeks Labor Efficiencies

ELLIOT ZWIEBACH

UNITED NATURAL FOODS INC. IS SEEKING TO make its distribution facilities more efficient in two ways: by installing labor-management initiatives at all warehouses, then by developing engineered labor standards for each one.

United Natural is implementing new labor-management systems at its warehouses across the country.

“The combination of labor management and engineered labor standards are the biggest drivers to significantly increase our warehouse productivity,” Steven L. Spinner, president and chief executive officer of the Providence, R.I.-based wholesaler, told SN.

“Labor management gives us the ability to increase the speed and accuracy of selectors and then rank their performance, which gives us much tighter control over the workforce in each facility,” he said. “Ultimately, it drives down the cost to select and get product loaded onto a truck.”

UNFI is beginning to see some payoffs from efforts to standardize labor processes and metrics on a national basis, including improvements in service levels, selection and delivery accuracy, warehouse productivity and transportation efficiencies, Spinner said. “Now it's a matter of training and further implementation.”

Spinner said an engineered labor standard “is basically a time study that's done inside each facility to lay out the slot locations properly and to make sure we're selecting in the most efficient way possible.

“UNFI has had industrial engineers looking at every SKU, every slot position and every warehouse layout for the past year, with the goal of realigning the work flow by changing slot locations or altering the sizes of the slots or rearranging the layouts so the selection process is faster and more productive,” Spinner explained.

UNFI is implementing the engineered labor standards on a facility-by-facility basis following installation of the company's new warehouse management system, he noted.

“The savings can be quite significant,” Spinner pointed out, though he did not specify a range. Observers said engineered labor standards could enable UNFI to improve its efficiency by 15%.

Spinner said the UNFI distribution center in Lancaster, Texas — which opened late last year with the new technology and engineered labor standards — exhibited the top selection accuracy rate in the company during the first part of 2011.

UNFI is taking “a very conservative approach” to implementing the new systems across its warehouse network, Spinner said. “Lancaster was the hardest because it was a brand new facility without a legacy system.

“But we think the next implementations are going to be considerably easier and less complicated, and I think we can get one additional facility done every four to six months.”

The second facility to get the technology and engineered labor standards package is the UNFI warehouse in Ridgefield, Wash., Spinner said. He declined to identify which distribution center would follow once the work at Ridgefield is completed.