For the past 24 years, CDW has created a successful business model with the focus on delivering technology solutions to both corporate and public sectors in the US and Canada. CDW grew sales to $8.1 billion in 2007, but with the fast growth came the necessity to focus on re-engineering some of their processes to better serve customers. It was time for us to build on its impressive operational track record and set new standards in operational excellence.
In the first quarter of 2007, the initiative to create new standards evolved with the creation of a cross functional steering committee to nominate projects and advise an Operational Excellence (OpX) group dedicated to drive process improvement projects. Fortunately, an existing framework was in place for the OpX team build out that was created in 2005 entitled “Customer First.” CDW was able to incorporate some of the goals from this program and expand to include ways of identifying both processes that negatively impacted customers as well as opportunities where process enhancements would show significant returns to the business while still positively impacting customers. Leading the charge for this new initiative was Doug Eckrote, Senior Vice President of Operations, and Mike Grisamore, Director of Customer Experience, who were tasked with building the group and overall initiative execution.
With the counsel of Customer First leadership team, we were able to identify several specific process improvement opportunities. These initial opportunities focused on improving automated communication to our customers around shipping, delivery, online communication of product ETAs (Estimated Time of Arrivals) and stock availability, clearly defining performance targets in the supply chain and better understanding the unique process cycle times from orders to cash. While these initial projects showed success, they uncovered even more opportunities for improvements and highlighted the need to add full-time, highly skilled process improvement coworkers.
Equipping the TeamThe focus of the Operational Excellence team in 2007 was to adopt a process improvement methodology that best fit within CDW’s culture while completing seven initial process improvement projects. The goal was to improve the customer experience while streamlining other business processes. Our strategy involved training new team members while partnering with an expert coach to guide the team through the initial seven projects. Team members underwent rigorous training in both lean and Six Sigma utilizing resources from Motorola University and the University of Michigan. The Operational Excellence team, with new Senior Manager Rafi Sahakian, then worked with their coach to design a scalable process to meet current projects and future objectives in a consistent method. Define, Measure, Analyze, Improve and Control phases were adopted, and various Lean or Six Sigma tools were identified to meet the deliverables of each phase.
Operational Excellence was embraced by senior management at CDW, but the team was challenged to gain the acceptance by middle management. Many of the tools were new, and it was difficult to consistently introduce these methodologies throughout the supply chain. It was clear that the objectives of the OpX team needed to expand beyond simply executing complex projects. The groups also needed to be skilled at change management as these changes impacted the organizational culture as many coworkers were fearful of potential job cuts that are sometimes associated with process enhancements.
To alleviate these fears and engage coworkers, CDW needed to find an appropriate way of communicating the benefits of the process improvement initiative in order to motivate and re-commit those involved. The OpX team needed to work to re-train the way coworkers approached their work and set goals for them to illustrate that process improvements within the supply chain would ultimately help them get the job done faster at the end of the day. To do this, we incorporated metrics that showed a direct connection between the process improvements and coworker involvement. These metrics were based on a reward system that coworkers excelled in the process improvement program, and training was rewarded with a company-wide email recognizing their achievements. In addition, their successes were noted in their annual performance reviews and contributed to continued coworker motivation and commitment to the program. Coworker commitment was instrumental to the success of the team as a whole as the OpX group worked to re-engineer customer service and business processes. As a result, training became a priority for Lisa Tegtmeyer, Senior Director of the Vernon Hills, IL distribution center and Ray Nair, Director of the Western Distribution Center in Las Vegas, NV.
With this emphasis on training, the OpX team worked to design materials that highlighted the process improvement concepts from both Six Sigma and Lean methodologies. Sessions were scheduled for coworkers at the two distribution centers in Q3 and Q4 of 2007. In the end, over 400 managers, supervisors and team leaders were trained on the process improvement concepts, and 40 small projects were identified and initiated. The projects were led by the management team, and the results helped team members across operations to further embrace the methodologies.
Plans are now underway to train all coworkers in the distribution centers by the end of Q3 of 2008.
Job Well Done
Success of the process improvement initiative impacted both CDW’s business and the culture. The seven initial projects were executed and resulted not only in improved customer experience but a $3 million dollar savings in by the end of 2007. This success of these programs translated into the nomination of 21 additional projects to undergo the same change for 2008. Other Lean training in the distribution center also contributed to a 35% increases in productivity, while the cycle time of damaged claims was reduced by 50% and provided customers with faster response times, which increased their satisfaction in service.
As a result of these successes, the initiative was adopted by other areas of the business, promoting an even broader look at business processes. The shift in coworker commitment was also a notable success as the OpX team was able to alleviate fears of job loss and instead motivate coworkers to recommit to excellent customer service.
As CDW continues its journey in process improvement, its future goals will focus on not only refining current processes but also in cementing process improvement best practices and methodologies in the culture. These efforts will allow us expand its solid foundation — to support the next 24 years of sales growth.
Mike Grisamore is Director of Customer Experience at CDW Corporation. CDW is a leading provider of technology solutions for business, government and education. Ranked No. 39 on Forbes’ list of America’s Largest Private Companies, CDW’s technology specialists offer expertise in designing customized solutions, while its advanced technology engineers can assist customers with the implementation and long-term management of those solutions. Areas of focus include notebooks, desktops, printers, servers and storage, unified communications, security, wireless, power and cooling, networking, software licensing and mobility solutions.
The company was founded in 1984 and as of June 30, 2008 employed approximately 6,700 coworkers. In 2007, the company generated sales of $8.1 billion. For more information, please visit CDW online at www.CDW.com.